(Photo credit: James Whatley)

Last week, the Chennai-headquartered Brilliant Tutorials’ branch in New Delhi was asked to cough up a refund of Rs 36,250 to a student who left the study course mid-way due to ill health. The New Delhi Consumer Forum, which passed the order, also asked the coaching institute to pay Rs 5,000 as harassment compensation to the student and Rs 2,000 as litigation cost. According to the reported details of the case, the student had enrolled for a two-year course with the institute. However, after two months, the student had to discontinue the classes due to ‘health problems’. He approached the institute for a refund of the remaining half of the period and was assured that it would be granted. However, when he didnt get the money, he approached the court.

Brilliant Tutorials told the Forum that as per the terms of admission, fees once paid were not refundable. However, the forum ruled that if the services were not availed of, the fees are bound to be refunded. The forum added that “A student or a trainee may leave midstream if he finds the service deficient, substandard and non-yielding, and to tell him that fees once paid are not refundable was an unfair trade practice, as no service provider can take or charge the consideration of the service which it has either not given or has not been availed.” The forum ruled, “We find that the institutes stand that fees once paid shall not be refundable is not tenable and they are liable to refund the fees on pro-rata basis for the period the complainant has not attended their coaching services.” It directed the institute to refund the fees and provide compensation within a month.

Reacting to the verdict, Chairperson of Pune-based Career Forum, Sujata Khanna says that a refund is not impossible provided that material costs are cut on a pro-rata basis. “The study material of a coaching class is costly. If you are talking of even 6,000 pages, it is a lot of investment on part of the coaching institute. And study material once opened cannot be given to another student, so it amounts to almost waste. So after deducting the material amount, the rest, which is essentially the unused service component can be refunded.”

Khanna adds that this is besides the issue faced by the tutorial that one seat will remain vacant in the class and it would be difficult to fill that one seat after the classes have begun.

According to ARKS Srinivas, Director of test-prep company T.I.M.E. at Kolkata, the largest cost component of the coaching is incurred within the first few months at most institutes. “How do you make a qualitative assessment of refund when the first few months of classes are most important?” asks Srinivas.

Srinivas also added that besides the teaching, a large part of the investment for a particular student is done even before the coaching classes start. “At least 25% of the fees collected goes into paying royalty for the course-material. Plus a service tax of about 10% is also paid much before. This means that 35% and more is used up even before a class starts. This makes the issue of refund a little different from the point of view of the coaching class,” explains Shrinivas.

Gejo Srinivasan, Principal Consultant at Career Launcher explains that fee figures are usually arrived at after taking into account the number of students and the faculty numbers and quality involved. If a student backs out, these figures get upset. “Not to mention the empty seats. How does one replenish the seats months after classes have started everywhere?” he asks.

We spoke to a few students about this. Chennai-based N Nagaraj, who is currently studying for the CAT feels that refunds should not be given without riders. “It depends on a lot of factors like how seriously the student had taken his classes and the faculty strength invoved. All these factors should be kept in mind when a refund issue is discussed.” Bangalore-based Abhishek Bhatia, also appearing for the CAT this year asks how a coaching class will fill a vacant seat if a student leaves mid-way. “In the first week itself, the student should take a decision on whether the class is going to benefit him or not. The coaching institutes should have a minimum cut-off time to allow students to leave if they want to. Beyond this time, refunds should not be allowed unless the circumstances are really difficult.”

Arshdeep Kaur from Chandigarh, also preparing for her CAT this year, begs to differ to a certain extent. “There should be a provision made for at least some of the money to be refunded. Often at coaching institutes, there are no demo classes and it is only much later the student may realize that the class is not good enough. In that case a refund should be permitted because that becomes a genuine reason for leaving.”

Both coaching classes and students however agree that if the cases is genuine, a refund should be allowed and the decision should be taken on a case-to-case basis, and after deducting the amount already invested on the student.

A problem however arises when the coaching institute fails to see the reason for quitting as an authentic one.

Career Forum’s Khanna says that a proper refund policy should be laid out by the institute so that disputes of any kind can be solved. “The refund should be calculated starting the day the student asks for a refund in writing and not from the day, he or she stops attending the class,” she suggests.

ARKS Srinivas says that the Consumer Forum ruling will certainly help students who register at the numerous small coaching institutes with questionable quality.

Srinivasan suggests that a student’s claim for refund is legitimate only if he has done his bit in availing the class’s services properly. “A coaching class does not give you a formal degree in the end like a college does. So a student can say whether his coaching class was successful or not only if he has attended his lectures and been an active partcipant in the activities prescribed,” he explains.

What do you think? What according to you makes a refund claim legitimate and what does not? Do answer the poll and leave a comment!