Over 250 private schools incurred a combined debt of more than SR 550 million on Saudi Credit Bank loans. The debts are a result of the decision to increase teachers’ salaries to SR 5,600 a month.
Abdul Rahman Al-Haqbani, chairman of the National Committee for Private Education at the Council of Saudi Chambers, said that these schools took the loans before the salaries were increased. “A number of these schools may be forced to shut down,” he added. A further 20 percent of private schools may follow suit before the end of the current educational year. Their exit from the education system will amount to more than 4,000 job losses.
“Schools shutting down had been expected. We, as officials and observers of the sector, can foresee events. These schools cannot afford the implications of the decision that will affect expenditures and earnings. They must now take into account social security levies that correspond with the current salary, not the previous one of around SR 1,500,” said Al-Haqbani.
“In a proposal to the Royal Court, we explained that payrolls of private school teachers should be divided among three parties: the school itself, the Ministry of Finance and the Human Resources Development Fund. Each party should pay up to SR 2,000 to meet the total of SR 6,000 for a fulltime teacher,” he said, adding that this would contribute to the implementation of the royal decree.
Resources in the Ministry of Education said that its minister is considering a meeting with owners of private schools to reach a suitable resolution. The same resources said schools that were in violation of the decision for increased salaries, would be subject to fines and penalties.
Minimum wage decision leads to school debt
