Unethical, Fraudulant pricing structure of EdTech startups

Several EdTech startups are booming in India. Lockdown has affected schooling and worried about education of their kids, several parents are opting for online courses. This opportunity is being encashed by several EdTech startups, offering expensive courses on loan to unsuspecting parents, denying cancellations and providing poor, substandard or no service after getting their money.

Besides the billion dollar giants like Byju and its purchased companies such as WhitehatJr, there is ExtraMarks, Vendantu, Unacademy, Upgrad and so many.

One basic practice of all of these companies seems very very wrong.

- All EdTech startups want entire course fees (for an year or 2) paid upfront by parents, though this is a service provided over a period of time and not a product handed over in one go.

- While 7-10 days cancellation is officially promised, any parent asking for cancellation is either tricked or not responded to, to make them.

- Aggressive marketing teams selling the course somehow, making false promises, playing on emotions and using unethical tricks like enrolling someone to a loan without their explicit consent.

My main objection is towards their upfront full payment collection practice.

If you are buying a car, it is understandable dealer wants full money because car is a product, given to you in full piece and it is a risk for dealer if you escape without paying rest of the money.

But what EdTech startups provide is a service. Every month they are supposed to conduct online classes, provide education materials to students, clear their doubts etc. This can definitely be paid on a monthly basis. There is no need to collect entire sum (of 6-12-24 months) in advance forcing or tricking parents to take a loan. Instead of paying loan EMI and interest, parent should have option to pay EdTech company directly. If the service is not good, parent can stop paying from next month, instead of the hassle to apply for cancellation and keep paying EMIs...

If you are a parent being tricked by EdTech sales guys to pay full amount in advance, refuse. They will tempt you saying you can save 10% or something like that. But if you are taking loan you have to pay much more in interest and cancellation will be a paint. Most of the companies try to cut cost after getting your money- teachers won't be accessible to clear doubt, one to one class will be a joke and materials too generic and ineffective.

Vedantu classes cost between 5000 to 40000 (about 400-650 Rs per class)

WhiteHatJr classes cost from 6000 to 1 Lakh

Some Edtech companies tie up with schools and force their courses on students, as if projecting them as mandatory.

Stay vigilant.