May 12, 2020
CAIRO — The COVID-19 pandemic officially arrived during the spring term, and from there it was just a matter of weeks before schools were suspended and, not long afterwards closed until the end of the year. The situation has been disruptive, obviously, for all students, teachers and parents. But because of the economics involved, people connected to private schools face particular complications.
Many parents who had already paid tuition fees are now asking for at least a portion of their money back. But the schools, most of which are run as for-profit businesses, have had mixed responses. Most have refused to refund any tuition, and some have stood their ground even as they have reduced their costs by laying off staff or forcing them to take unpaid leave.
The government, meanwhile, has stayed out of the conflict. "Now is not the time," Education Minister Tarek Shawky said on television earlier this month. Schools are not legally bound to pay back the fees, he said, adding that the ministry would not look into the issue before the end of August because it requires detailed study.
There are three kinds of schools in Egypt: government schools, national private schools and international private schools. Government schools are generally free. National private schools teach the state's curricula but also offer foreign language instruction. International schools, among which the American, French and British schools are the most popular, teach foreign curricula.
Two million students attend a total of 7,500 private national and international schools, according to 2019 government data. Government schools, of which there are nearly 46,000, enroll about 19 million students.
We don't save a dime.
National private schools collect tuition at the beginning of each semester, although some allow this payment to be made over two installments. International schools follow a similar payment pattern, although they also tend to fold in a percentage of the tuition for the following year into the current year's payment. They also charge late fees and can withhold a student's academic records in the case of missed payments, according to parents who spoke with Mada Masr.
Most schools have already collected tuition fees in full for the current year, and some have even asked for next year's payments, says Rania Badran, administrator of one of the most popular Facebook groups for parents of children in international schools. Badran says the page has been flooded with posts from parents demanding repayment of at least part of the fees.
Most parents who send their children to private schools are salaried employees who take out loans from banks or informal savings groups to pay tuition fees, according to Nany Fekry, a mother of two students in a national private school in Cairo. Education in Egypt is "dreadful" she says, and national private schools are "the only chance the children of the middle class have to get a half-decent education."
"We don't save a dime," she adds. "We're only investing in our children."
Hoda* works as a medical doctor and describes her income as decent, but she had to take out a loan to pay for her children's private school. She told Mada Masr about a friend of hers who pays about LE100,000 ($6,350) annually in tuition and school supplies. The friend paid the school in full in December after participating in an informal saving group to which she contributes LE10,000 ($635) monthly. Hoda's friend makes her money through an online store that's been battered by the pandemic.
Computer lab at a school in eastern Cairo — Photo: Ahmed Gomaaa/Xinhua/ZUMA
Now the school is refusing to return the money, saying it has to pay wages for teachers, while Hoda's friend is jobless, and still obligated to pay her savings group monthly.
Other schools have threatened to expel students to force parents to pay the fees in full. Fouad International School in the Sharqiya governorate is insisting on collecting the last LE30,000 ($1,900) installment of its LE135,000 ($8,600) tuition fees, despite forcing its physical education teachers and other staff on unpaid leave, according to several parents in the school. One parent said the school denied her a one-month grace period, despite the overwhelming circumstances. The school did not respond to Mada Masr"s request for comment.
Because the Education Ministry replaced final examinations with research papers, allowing students to matriculate from one year to the next, schools feel they have provided the service they were paid for and are entitled to collect full fees, says Adel Bakhit, a public school teacher.
Special needs students are the most affected by the suspension of schools, both financially and psychologically, because their tuition fees are generally higher than other students and they can't do online classes, said Badran, the Facebook group admin.
A 2017 law stipulates that 10% of classes must include special needs students, such as those with attention-deficit or autism spectrum disorders. Each school must have special units to care for these students.
I'm still going to work and putting myself at risk just to pay for a service I'm not getting.
Heba, a mother of a four-year-old child with autism, put in her son's school application at the end of 2019 in order for him to begin in September 2020. The school offered to enroll him in private sessions from February to June, to help him prepare for full-time enrollment in September. When school was suspended in March, the administration offered to continue the sessions online, despite the fact that her son can't be exposed to screens because of his condition. They also threatened not to admit her son in September as planned if she didn't pay her fees in full.
She has already paid the school LE26,000 ($1,650) this term. "I'm still going to work and putting myself at risk just to pay for a service I'm not getting," Heba says. Her salary was cut by 20% this month.
Heba said private schools usually refuse to admit special needs students, and when they do, tuition fees are doubled to cover the cost of the special care unit. In reality, these units are often non-existent and the school just provides a "shadow teacher," whose salary is paid for out of the parents' doubled fees.
A handful of schools have agreed to share the burden with parents. Windrose Academy reduced its third semester's tuition installment by 20%. Greenland International School has offered financial aid to struggling parents, and is accepting post-dated checks for next year's fees. Others have cut next year's bus fees.
Schools aren't legally obligated to return the fees as long as classes continue online, lawyer Ahmed Ragheb said. But authorities should mediate between schools and parents for the public good, he said, giving the example of the central bank's decision to postpone loan payments for six months, or the stipend offered to informal workers.
There is no easy way out of this problem.
Schools say they are still paying expenses, chiefly staff salaries. That's true for some institutions such as American City International School and Metropolitan International School. Many others, however, aren't doing so. New Vision School has collected full tuition but gave its teachers the option to give online classes while cutting their salaries by half, an employee at the school who asked to remain anonymous said. Meanwhile, the school's administrative staff was offered a choice between continuing normal work at half salary or going on open-ended unpaid leave, the employee said, adding that she chose the latter option.
Valley Language Schools in Giza is forcing teachers to be physically present in the school twice a week, even though study sessions for the end-of-year research projects are almost finished, according to a teacher at the school. Teachers who asked to work from home have been threatened with salary freezes, and those whose children attend the school and haven't paid the last tuition installment had their salaries cut.
Meanwhile, Stanford Integrated Schools forced teachers, supervisors and drivers to take unpaid leave after finishing online review with students at the end of March, according to a teacher at the school.
"There is no easy way out of this problem," Ragheb said. If parents are paid back in full, school staff will suffer, including janitors and bus drivers. He suggests we find a way for schools and parents to share the losses, though how that would work in real terms is easier said than done.
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It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.
October 27, 2021
PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.
Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.
Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.
Share capital of one billion
The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).
The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.
Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.
While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.
The infamous typo that brought the Air Next scam down
Raising Initial Coin Offering
Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.
For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."
What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".
Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.
Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.
Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.
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