Controversy Erupts Over Telangana's Shift to DBT for Fee Reimbursement

Hyderabad: The fee reimbursement scheme, which supports nearly 14 lakh students every year in pursuing higher and professional education, has been embroiled in controversy with the issue of GO 7 on April 29. The government has proposed to convert the existing model of reimbursing colleges and instead deposit the fee directly into the accounts of students from the from the upcoming 2026–27 academic year.

The practice of paying the fee to college managements had been the practice since the scheme’s inception in 2008 under the Congress government led by then Chief Minister Y.S. Rajasekhar Reddy in undivided Andhra Pradesh.

The move has triggered widespread concern among students and institutions alike, particularly against the backdrop of the government’s dues exceeding `10,000 crore to private college managements, accumulated over the past five years. This has raised serious doubts over whether the government would be able to deposit funds into students’ accounts on time every year, and whether colleges would be willing to offer admissions based solely on government assurances under the DBT system.

The shift to direct benefit transfer (DBT) to students is being viewed as a double-edged sword for educational equity. While the system is designed to improve fiscal transparency by eliminating intermediaries, it transfers the burden of delays directly on to students. Any delay in disbursement would leave students personally liable for fee payments, exposing them to institutional penalties and financial distress.

Compounding the issue, an interim order by the Telangana High Court in April permitted some private colleges to collect fees upfront, temporarily suspending the long-standing “no fee payment” protection for SC, ST, and BC students until the state government clears dues. This has heightened concerns over the vulnerability of economically weaker students, with experts calling for stringent legal safeguards to prevent institutions from denying admissions or withholding certificates due to government arrears.

The financial strain on the scheme has reached critical levels, with reports from the Telangana Education Commission estimating arrears between Rs.10,000 crore and Rs.12,000 crore over the past four academic years. The delay in fund release is having consequences, as nearly 80 per cent of students admitted under the merit quota in professional colleges depend on fee reimbursement. Private institutions, grappling with delayed payments, are reportedly compromising on infrastructure and academic standards, while economically disadvantaged families are increasingly resorting to high-interest private loans to cover upfront expenses.

The education commission has warned of a looming crisis, cautioning that continued delays could lead to a sharp rise in dropout rates among vulnerable sections.

Widespread Protests Errupt Over GO 7; Student Unions and Leaders Demand Withdrawal

Telangana: The fee reimbursement GO 7 has sparked stiff resistance from BC, SC and ST community associations as well as student unions, who allege that it is a conspiracy to dismantle the existing scheme under the guise of direct benefit transfer (DBT). They expressed concern that the DBT system threatened the future of nearly 14 lakh students from marginalised communities who depend on fee reimbursement to pursue higher and professional education.

Telangana Students’ JAC chairman Vemula Ramakrishna expressed concern that GO 7 would cause irreparable damage to poor students and push them away from higher education. Demanding immediate withdrawal of the order, the JAC organised a protest rally in Hyderabad, with participants wearing black scarves and symbolically tearing copies of the GO.

BC Welfare Association leader and MP R. Krishnaiah urged the state government to withdraw GO 7 and file an appeal against a High Court single judge’s ruling that allowed some educational institutions to collect fees from students pending reimbursement approval. Krishnaiah said the developments were causing severe hardship to students, with colleges mounting pressure for fee payments.

Krishnaiah pointed out that the government’s decision to implement DBT by transferring fee reimbursement and scholarships directly into students’ bank accounts contradicted the ground reality, where institutions continue to demand upfront fees.

BRSV state vice-president T. Balu alleged that the government was attempting to phase out the fee reimbursement scheme through GO 7, calling it a direct assault on access to higher education. Another student leader, Padala Satish, also demanded scrapping of GO 7 and restoration of the earlier disbursement system, while reiterating the demand for immediate release of pending arrears.

The Students’ Federation of India (SFI), opposing GO 7, argued that transferring scholarships and fee reimbursements directly into students’ bank accounts, instead of paying institutions, would place a financial burden on economically weaker students and discourage them from pursuing higher education.

SFI state president S Rajinikanth and state secretary T. Nagaraju said that although the DBT system may appear transparent, the government had not provided clarity on its timing and mechanism. They pointed out that private colleges insist on upfront fee payments during admissions, and any delay in releasing DBT funds could prevent poor students from securing seats in professional courses.