The court made it clear that private universities cannot operate as profit-making institutions (Photo: Amity University)
What began as a grievance of student against Amity University over its tuition fees and other charges that students need to bear, has snowballed into a nationwide issue of how private universities collect exorbitant fees, manage finances, recruit teachers and use their vast financial resources.
On September 17, a Supreme Court bench comprising Justice Ahsanuddin Amanullah and Justice N V Anjaria directed all private universities in India to disclose five years of audited financial records, fee collections, utilisation of funds, investments, salaries, recruitment practices and benefits received from governments.
The Union government, states and Union Territories have been directed to collect the information and submit affidavits within six weeks, with the next hearing scheduled for November 19.
The court made it clear that private universities cannot operate as profit-making institutions, while recognising that they may maintain a reasonable financial cushion for smooth functioning, development and suitable compensation of employees.
Anil Bansal, an educationist at Udemy, an online learning platform based in Gurugram, says the Supreme Court’s scrutiny could increase accountability across private higher education.
“It could force private universities to become far more accountable about the fees they collect and how they use them. For students and parents, the biggest benefit could be greater clarity about whether high fees are actually translating into better teaching, faculty and facilities. It may also expose gaps between what universities promise during admission and what they actually provide,” Bansal tells Media India Group.
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He says such disclosure requirements should cover the private university sector, while protecting legitimate institutional autonomy.
“Yes, basic financial disclosure should apply across the sector. If universities are collecting large amounts of money from students, parents deserve to know how those funds are being used. But the process should distinguish legitimate institutional surplus from profiteering and should not become a rigid system that interferes with academic or administrative autonomy,” he says
The scrutiny comes as private institutions have become a major part of higher-education system of India. The University Grants Commission (UGC) currently lists more than 550 private universities across the country, while All India Survey on Higher Education (AISHE) data put total higher-education enrollment at nearly 45 million students in 2023-24.
The scale of the sector makes the court’s order on financial scrutiny significant. Universities have been asked to disclose fees collected at admission and during courses, including tuition, development funds and event-related charges, while explaining how surplus funds are managed and invested.
Providing the best possible education to a child is one of the top priorities for almost every Indian parent, who set aside large sums of money or take loans to fund their children’s studies. For parents, the top court’s order could not have come a day sooner.
Akhilesh Sanyal, whose son Aryan is enrolled as a B. Tech student at Amity University, Noida says parents are given information about the overall fee but often have limited clarity about how individual charges are calculated or used.
“We were told the overall fee, but honestly, there was not much clarity on the different charges. We knew how much we had to pay, but not exactly why we were paying each amount. There were tuition fees, development charges, examination fees and other expenses. During admission, the priority was to complete the payment, not to explain how these charges were decided,” Sanyal tells Media India Group.
Because Aryan obtained some scholarships due to his merit, Sanyal had to pay a fee of only about INR 580,000 for the four-year course, but a normal student, without any scholarship could see the costs for the same course shoot up to INR 1 million.
Sanyal says the facilities offered by private universities do not always justify the high fees.
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“The campus may look impressive, but parents are not paying only for buildings and facilities. We are paying for good teachers, proper classes and academic support. When classes are cancelled or students do not get enough interaction with faculty, you naturally start asking whether the fees are really justified. For a family paying such high fee, every part of the education matters,” he says.
He also says parents receive payment reminders but little information about how the money collected from students has been spent.
“No, not in any detailed way. We get reminders about when the next payment is due, but we do not get an account of how the money already paid is being used. As parents, we are expected to trust the institution, but there should be some basic transparency when such large amounts are involved,” he says.
Sanyal says private universities should provide greater clarity on both their finances and academic resources.
“At the very least, universities should clearly show where the students money is going. Parents should know how much is being spent on teaching, faculty, infrastructure and student services. They should also be transparent about classes, faculty availability and complaints. If an institution can ask parents to pay lakhs of rupees, it should also be able to explain what students are receiving for that money,” he says.
It is not just the engineering studies that are expensive as parents of students of humanities. Ramesh Sharma, whose son Raghav is a 3rd year student of Bachelors in Business Administration at K R Mangalam University in xxx, says meeting the high financial commitments of private higher education can be difficult for middle-class families, particularly when additional costs emerge during the course.
“We knew the basic tuition fee before admission, but the complete cost of the course was not clear to us. There are several other expenses that come up during the year, and these add up. For a middle-class family, even an extra INR 20,000-30,000 is not a small amount. We need to know the full financial commitment before making such a decision,” Sharma tells Media India Group.
Sharma says his family expected stronger academic support in return for the fees being paid.
“I would say we expected more for the amount we are paying. We chose a private university because we believed the academic support and facilities would be better, but there are times when the difference does not seem significant enough to justify the cost. We are not expecting luxury, we simply want the education to match the fees being charged,” he says.
Sharma says greater transparency should cover both the total cost of education and the academic services provided.
“I would expect a clear fee structure for the entire course, including charges that parents may have to pay later. There should also be some basic reporting on teaching, faculty and student services. If parents are making a long-term financial commitment, the university should be equally transparent,” he says.
The direction does not mean charging high fees is itself unlawful. In TMA Pai Foundation vs State of Karnataka (2002), an 11-judge Constitution Bench held that private unaided institutions could charge reasonable fees and generate surplus for development but could not engage in profiteering. In Islamic Academy of Education vs State of Karnataka (2003), the court further held that surplus should be used for the betterment of the institution rather than diverted for personal gain or other businesses.
The latest order seeks to examine how these principles operate in practice.
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Faculty and classroom resources under scrutiny
The court has also sought information on the recruitment, salaries and service conditions of teaching and non-teaching staff. Universities must provide data from January 2025 showing how many classes were allotted to teachers, how many were actually conducted and what arrangements were made when classes were not taken.
This shifts scrutiny beyond faculty numbers to how effectively academic resources are being used.
Universities have been directed to disclose benefits received from Central and state governments, including land allotments, legal relaxations and other special privileges. This could bring greater transparency to the relationship between private universities and governments, particularly in states where private institutions have expanded rapidly.
The court has also sought five years of inspection records from professional regulatory bodies covering medicine, dentistry, nursing, pharmacy, law, veterinary education and allied health, including details of faculty shown on institutional rolls.
The exercise could therefore produce a much wider picture of how private higher education is financed, staffed and regulated.
For a sector serving millions of students and carrying an increasingly important share of Indian higher-education capacity, the intervention of Supreme Court places finances, academic resources and regulatory compliance under the same lens.
