The erstwhile thriving EdTech sector in India, which had boomed during the COVID-19 pandemic, is now facing serious challenges. FIITJEE, one of the leading coaching institutes for aspiring engineers, has become the latest name on the list of plummeting education giants. The institute shut down its centers in Delhi-NCR, Uttar Pradesh, and other cities such as Bhopal and Patna, leaving students and parents in shock.
What happened at FIITJEE?
It has brought chaos for students preparing for competitive exams like the IIT-JEE due to the closure of FIITJEE centers. This is after the resignation of many teachers over unpaid salaries, on top of financial troubles and administrative woes-FIITJEE has not just been violating rules relating to fire safety and licensing but also received termination notices.
Parents are understandably furious. Many had paid hefty fees upfront, but no prior warning of the closures or any refunds came.
One parent narrated her experience of saying, “I had paid six lakh rupees as fees already. Twenty days back they told us there was not a single problem, but now the center has closed down. They have taken money from all of us and are saying classes will still go on.
Another parent, Rajiv Kumar Chaudhary, expressed frustration after receiving a message to move their child to another institute. “We had paid 100% of the fees for five years, but two years are still left. FIITJEE can’t just tell us to shift to Aakash Institute. It’s our decision where our child studies,” he said.
Parents demand action
Parents have been left running around for answers, filing complaints and demanding refunds. “The management isn’t answering calls. They should return our money. The government needs to intervene—this is about our children’s future,” said another parent.
Even in the state of Madhya Pradesh, where the FIITJEE centres also went out of action, the state Education Minister Uday Pratap Singh acknowledged the issue but has yet to offer concrete solutions.
Why is India’s EdTech industry struggling?
FIITJEE is not an exception to financial woes. Even Byju’s, the EdTech leader, is facing pressure. It became a household name during the pandemic and reached a valuation of $22 billion in 2022. However, it is now facing regulatory scrutiny. The company is unable to repay a $1.2 billion loan, and investors are demanding greater transparency.
At its peak in 2021, Byju’s had ₹10,000 crore in revenue and more than 85,000 employees. However, the demand for online education has drastically dropped since the pandemic ended.
Fewer students engaging in online learning
One of the biggest challenges for EdTech companies is student engagement. Platforms like Udemy report that most students only complete about 30% of the courses they enroll in. Some students pay for classes but never even start them.
Key reasons behind the edtech failure
Financial pressures: Institutions are under heavy pressure due to high expenditure and low revenue.
Regulatory violations: For example, illegal enrollments that have resulted in the shutting of companies.
Low participation: Students lose interest or fail to finish an online course.
The fall of FIITJEE and the other EdTech giants scares parents, students, and even teachers. Undoubtedly, after such a disastrous adaptation process by the industry, it is the need of time that EdTech companies should better engage with all, maintain financial stability to get back, and be more transparent to restore the trust.
The shutdown, at least so far, has become a wake-up call for the entire industry and, of course, a harsh reminder for families regarding how to go about investing in education.