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Swedish school crisis just continues to get worse - Private schools are now 25 percent more likely to go bust

Wednesday, 21 August 2013
Swedish private school system has been hailed by the likes of the UK as models to improve their own failing school system. However, the problem here is that the Swedish private school system is failing as most of the companies running these schools are going bust day by day.

According to a new report by the Swedish business daily Dagens Industri, more that one in fours private school authorized to conduct education business in the country is reporting financial distress, writes Dagens Industri on Wednesday.
Swedish school business
In May when the private school provider JB Education went bankrupt, it was thought that was a one off. However, it now looks like the school business is as bad as one could not have expected.

Credit Company UC has examined 129 independent schools with a license to conduct school business in Sweden and founds that one in four companies in the education business suffered losses last year.

Meanwhile, the risk of bankruptcy with the past five years was found to stand at 2.5 from 1 percent.
"A bankruptcy risk at nearly 2.5 percent is high. The risk of bankruptcy within private education branch  is now 25 percent higher than average risk for all companies in Sweden, "says Roland Sigbladh, Marketing Manager at UC to Dagens Industri.

"Sweden has had declining pupil cohorts between 2010 and 2015 with 25 percent fewer high school students. It affects all players negatively. The second factor is the 2011 form colleges where practical training were favoured did not lead to higher demand for higher education. Since the fall of 2013, the vocational students were allowed to automatically gain access to university studies again, "said Peter Moller, of venture capital Company, FSN partner, to Dagens Industri.

Therefore, the deal of the Swedish school model is not bad but the changing student landscape and the evolving job market situation is the driver. In addition, the fact that Sweden is naturally competitive irrespective of who runs the school means that private schools have not gained an edge over state run schools.

Environments where there is management dichotomy - efficiency is seen mostly in the private sect could benefit more from this system.
by Scancomark.com Team

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