It is important to understand and interpret traditions. And when it comes to the basic education sector, an important tradition takes place between the end and the beginning of each year, with the media filling the headlines with surveys indicating increases in school tuition (mostly) above the inflation rate, justifying this adjustment as a measure to protect Brazilian families.

This vicious cycle has been repeating itself for decades, and we do not see the public debate delving into the crucial details of the issue. After all, yes, tuition hikes are a chronic problem in Brazil. But the question that remains is: Are these increases the cause of unjustified actions by school owners? Or are the hikes the natural consequence of management lacking financial support and predictability?

In addition to arguments, we need to provide historical context and shed light on the root of the problem.

To protect the education of children and young people, there is a federal law that prohibits the suspension of school activities during the school year due to nonpayment. On the one hand, this is wonderful: it ensures that students do not suffer interruptions or educational penalties due to any financial difficulties their families may face. But on the other hand, that same federal law has neither created nor implemented any support mechanisms for schools, which are responsible for maintaining educational services regardless of whether families pay their tuition or not.

In other words, despite its intent to protect students, this mechanism works against the interests and needs of schools and the Brazilian education system. Given that there is another regulation (the Usury Law) that prohibits charging interest rates above 1%, families instinctively turn to educational institutions for financial assistance, prioritizing the payment of their most expensive debts, such as credit card balances, overdrafts, health insurance premiums, rent, and mortgage payments.

Now try this exercise: Imagine you’re a business owner, opening up that income and expense spreadsheet. Interestingly, every month you have a 25% shortfall in cash flow because you aren’t being paid for the services your company duly provides with excellence—and yet you still need to continue paying payroll, suppliers, and other bills. How do you solve this equation? 

Generally, the only option is to take out a loan with unsustainable interest rates, which can reach up to 360% per year depending on the type of loan. 

Yes, this is essentially the desperate reality that schools must constantly deal with, without ever knowing how many families will pay on time. As a result, school administrators end up sacrificing their quality of life and spending 50% of their time on financial matters (delinquent payments, collections, seeking credit), rather than devoting their energy to the school’s core mission, which is education. And what makes the problem even worse—as incredible as it may seem—is that there are no development funds for basic education in Brazil.

As a result, the only way school operators have found to keep their “books in the black” is to raise tuition fees—as a source of revenue and a means of easing the strain on the school budget—thereby having those who pay on time subsidize those who do not.

As much as education is one of the top priorities for Brazilian families—along with home ownership and health insurance—there is no longer any room for this adjustment model to work in the short and medium term. It’s worth remembering that the difference between medicine and poison is the dose.

We need to make the education sector a leader by offering a wide range of services focused on the needs of schools.

With so many innovations and financial solutions emerging in recent years, predictability and security are already a reality for most K-12 schools. Now is the time to take an even closer look at the entire ecosystem, seeking to offer even more innovative solutions that enhance the quality of education, the sustainability of educational institutions, and, consequently, the future of our children.

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