4 Major Findings: The Impacts of COVID-19 on Schools, Teachers & Parents
As schools began closing across markets Opportunity EduFinance operates in early March 2020, EduFinance began a series of market research reassessments with the aim of better understanding how affordable non-state schools, teachers and parents were being affected. These stakeholder surveys also highlighted what responses financial institutions could take to alleviate some of the ensuing financial pressures that are being placed on non-state education systems.1. School median revenue fell by 80% and impacted schools across all countries surveyed
Our research found that of the 657 schools interviewed, 98.6% experienced a significant decrease in school revenue, with a median loss of -80%, suggesting a significant negative impact for the vast majority of schools. The significance of the decline was felt across all countries, with the most significant shortfalls in Nigeria (-82.7%) and Zambia (-80.6%).
Figure 1. Decline in school revenues by country
2. Teachers were not officially laid off in large numbers, but schools were unable to pay teachers in some markets
Despite the financial impact, most schools did not officially lay off any teachers. The small number of teacher layoffs that did occur primarily took place during August and September 2020. However, some countries saw more schools laying off teachers than others. For example, Nigeria lost more teachers on average. In addition, the larger median number of teachers laid off in Nigeria and Uganda suggests that larger schools were impacted most by school closures.
While the majority of schools did not lay off teachers, the picture is more nuanced. In Rwanda, a separate study by Opportunity EduFinance found that teacher salaries were unaffordable to schools as closures set in between April and July. By July, 91% of schools were unable to pay their teachers any salary.
Figure 2. Schools' responses to whether they had laid off teachers during temorary closures
Figure 3. Schools did not lay off teachers, but in some markets they were unable to pay them
3. Parents reported income loss but not to the same extent as schools and teachers
Parents were also impacted financially as many struggled to find work. Our research found 94.5% of the 457 respondents had seen their incomes decrease. However, likely due to diversification of professions, the median impact of this decline was 50%, lower than that for schools and teachers.
There are regional disparities in the extent to which parents’ incomes were affected. On average, parents in Ethiopia were one of the worst affected groups during the pandemic in spite of Ethiopian schools leading a better response than their sub-Saharan peers. This reversal can also be seen in Nigeria. Nigerian school finances sustained the largest impact to incomes (-82%) whereas parents lost 51% of income. Ugandan parents appear to have faced the largest decline according to the respondents, where parents have lost 62% of their income over the course of the pandemic.
Figure 4. Parents' loss in income by country
4. Schools, teachers and parents all want access to loans for a range of immediate needs
Of all school owners, teachers and parents surveyed, 50.7% expressed a desire to access financing. While debt is not a panacea, it does demonstrate the need for affordable capital to resotre educational progress that has been made in recent decades.
Schools remain resilient but need access to finance to help mitigate lost revenue. School owners were asked what new income generating initiatives they had planned if they were able to gain access to financing. The most cited need for financing (37%) was to invest in resources for remote classes or e-learning, with 28% stating they were able to use this funding now if offered. Other frequently cited potential loan uses included agriculture and retail initiatives, such as selling books or learning materials. If given the opportunity to take loans to invest in these cited initiatives, schools could make a stronger case for ongoing payment of school fees even if instruction is delivered remotely, and build back depleted cash reserves through additional income generated.
The financial needs of teachers appeared to change over time. For example, an immediate need of 51% of respondents in August 2020 was to obtain cash to start a new business, which is assumed to be in parallel to their teaching employment. This need became less relevant in October, with the urgent financial needs becoming more balanced across cash to purchase learning equipement for children (39%), pay for rent, bills, and food (28%), and for house renovation (28%).
Figure 5. Teachers' allocation of required funds for use in the short-term
The vast majority of parents reported needing a loan. Of the 292 parents who responded, 92% stated needing a loan, with one-third of parents requesting a loan up to $400, while 47% for parents would seek financing of up to $800. The loan amount needed and ability to repay differs across markets, with the highest needs reported coming from Ethiopia, the Domincan Republic and Uganda.
Figure 6. The repayment ability and loan amount needed by country
Conclusion
While loan repayment holidays and extended grace periods offered by lenders are essential, more can be done to leverage private capital to support schools, teachers and parents to mitigate the impacts of decreased income during this time. Capacity building and training programs are clearly needed to come alongside schools and families in order to support remote learning. Many schools are looking to fund initiatives that can improve the availability of remote learning, but currently lack the funding to do so. Funds are also required for families to invest in equipment needed to access remote learning platforms for children.
Across the board, school stakeholders have continued to struggle and student learning losses are expected to last for some time. The current generation stands to lose as much as $10 trillion in lifetime earnings as a result of the pandemic (World Bank, 2020). As schools phase reopening, getting children back into the classroom and ensuring schools and families have the access to financing they need to continue operating, pay educational expenses, catch learners up and improve education quality overall is now more critical than ever.