This is a set of personal policy recommendations, based on observed realities and financial risks, designed to stabilize private education institutions (PEIs) during the COVID-19 crisis. The goal is to prevent mass failure and the resulting waste of teaching human resources.
I. Addressing the rent crisis (The critical bottleneck)
PEIs were uniquely mandated to shut down by government order. Therefore, the government must intervene to prevent mass bankruptcy, as rent constitutes 20−35% of a PEI’s operating costs—the single greatest fixed expense. The argument that this intervenes in “civil relations” is moot when the shutdown is due to a state-issued emergency order (similar to ordering factories to switch production to masks or ventilators).
Recommendations:
- Tax incentives for landlords: Grant landlords Corporate Income Tax (CIT) or Personal Income Tax (PIT) exemptions on rental income during the crisis period to incentivize them to reduce or waive rent.
- Legal force majeure: Officially declare the pandemic a force majeure event to facilitate negotiations between PEIs and landlords by removing the immediate threat of legal enforcement during the crisis.
- Bank interest support: For landlords who used bank loans to finance educational facilities, establish a mechanism (via the Development Policy Bank or similar) to mandate reduced or subsidized interest rates on their loans.
II. Guaranteeing capital access for SMEs
Most small and medium-sized PEIs lack the fixed assets necessary for collateral. The government must provide a mechanism to guarantee bridge loans.
Recommendations (Collateral-Free bridge loans):
- Credit guarantee: The government should guarantee loans for PEIs up to 10% of their previous year’s revenue (e.g., 50 billion VND revenue → 5 billion VND loan) for a maximum term of 18 months.
- Streamlined security: To expedite the process, business owners must accept pledging company shares (e.g., 20% equity) as collateral and accept strict legal liability for repayment (e.g., direct deductions from personal accounts, public disclosure as bad debt). This provides banks with necessary security without requiring the PEI’s limited fixed assets.
III. Tax relief and direct relief for vulnerable staff
PEIs have minimal capital reserves outside of facility improvements and payroll. Timely tax and fee relief is essential to prevent mass layoffs.
Recommendations (Tax and fee waivers):
- Tax and Social security moratorium: Grant a two-year exemption from mandatory Social Insurance (BHXH), PIT, and CIT for PEIs severely affected by the crisis (e.g., verified 40% revenue reduction year-over-year).
- Direct staff relief: Implement a swift, decisive rescue package for the most vulnerable: teachers earning below 6 million VND per month.
- Mechanism: The government should utilize established, reputable microfinancing or consumer financing institutions (which have experience in rapid deployment and collection) to disburse funds, with the state subsidizing the interest.
- Emergency Loans/Subsidies: Provide either an interest-free loan equivalent to 6 to 12 months of social insurance contributions, or a direct monthly subsidy (e.g., 1 million VND/month) for staff ineligible for unemployment benefits.
IV. Administrative simplification and legal reform
Current relief procedures are overly bureaucratic and contain unrealistic criteria that prevent compliance.
Recommendations (Streamlining and Certification):
- Decisive simplification: Reduce red tape and mandate a maximum processing time of seven days for emergency relief applications.
- Realistic criteria: Abolish unrealistic criteria (e.g., proving 50% staff loss or 50% revenue loss) that penalize companies attempting to keep staff employed via reduced hours/salaries.
- Simple benchmarks: Adopt a simple, transparent standard for disbursement (similar to the U.S. government’s PPP criteria), such as: (a) operating in the education sector, (b) salary below 6 million VND/month, and (c) verifiable receipt of a base salary in the previous month.
V. Legalizing distance learning (The long-term mandate)
The greatest long-term policy requirement is the immediate and official acceptance of online education.
Recommendation (Permanent online learning):
- Abolish physical constraints: Officially and permanently abolish all stringent requirements related to physical facilities and geographic location for all educational enterprises (K12 to university).
- End hesitation: This decisive move signals to PEIs that investment in EdTech, online content, and blended models is a permanent, mandatory long-term strategy, not a temporary expense.
- Market quality control: The government should not fear a decline in quality. Quality should be controlled by market forces: parents who accept the service pay for it; those who don’t choose in-person learning. This legal certainty is the core catalyst for sustained EdTech investment.
