Published: 19th June 2021
Welcome to Reason: Is it okay to be under the mercy of school managements or moneylenders?
There are at least two well-known routes which prudent managements in the corporate/business sectors routinely resort to — Reserve Fund and Sinking Fund
“Neither a borrower nor a lender be, for loan oft loses both itself and friend, And borrowing dulls the edge of husbandry.”
-William Shakespeare (1564-1616) English dramatic poet, in Hamlet — wherein Polonius counsels his hotheaded son Laertes, who is about to embark for Paris for his gentleman’s education
The above advice holds good even today. Yet, the managements of elite private schools in Karnataka seem to encourage parents to borrow from moneylenders at usurious interest rates as per Karnataka Minister for Primary and Secondary Education S Suresh Kumar. In a media report from Kolar (12/6/21), he said that an unholy nexus of private school managements and moneylenders at several places is fleecing parents in the name of school fees. According to him, a few private school managements have roped in moneylenders to extend loans so that they could pay school fees and observed that it was a disturbing development. This exposed those chaotic and shoddy managements who have not built a buffer against unforeseen shortfalls in income and surplus.
There are at least two well-known routes which prudent managements in the corporate/business sectors routinely resort to — Reserve Fund and Sinking Fund. A Reserve Fund is a savings account or other highly liquid asset set aside by an individual or business to meet any future costs or financial obligations, especially those arising unexpectedly. A Sinking Fund, on the other hand, is a fund containing money set aside or saved to pay off a debt or bond. A company that issues debts will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outgo of revenue.
These and other instruments are available to private school managements instead of delivering the trusting, helpless parents of their students into the greedy clutches of moneylenders. If what the minister said is founded in truth, the private school managements involved have betrayed their whole class for hankering after filthy lucre.