The Supreme Court has ruled that fees collected from Non-Resident Indian (NRI) students in self-financing colleges may be used for a range of institutional purposes, and NRI students cannot demand that their fees be restricted solely to subsidizing the tuition of Below Poverty Line (BPL) students.
The Court addressed a challenge to the Fee Regulatory Committee’s directive, under the Kerala Medical Education Act, 2017, which required a portion of NRI quota fees from self-financing MBBS institutions to be contributed to a fund for scholarships to BPL students. Some medical colleges sought the release of this corpus, arguing that NRI fees support not only subsidies for economically weaker students but also the upkeep and development of the institution. Meanwhile, NRI students demanded refunds, claiming they should only subsidize fees for two other students, relying on the PA Inamdar case.
The Bench of Justice Surya Kant and Justice N Kotiswar Singh observed, “the fees collected from NRI students can be utilized for a variety of purposes, including but not limited to subsidizing fees for other students through scholarships. Accordingly, the fees for NRI students cannot be determined solely considering the factor of subsidization of education; all the abovestated factors must be taken into account. Resultantly, the NRI students’ contention that their fees should be restricted to only subsidize the education of only two students from economicallyweaker sections of society falls flat and cannot be considered a valid reason for a refund.”
Two five-judge Benches in Islamic Academy and Modern Dental College rulings established that the government cannot impose fixed fee structures on self-financing institutions. Each institution has the autonomy to set fees based on its financial needs, infrastructure, staff salaries, and future development plans. While fees may vary due to differences in educational quality, institutions must not charge excessive or exploitative fees, preventing profiteering or capitation fees.
The Court stated that Self-financing medical colleges can retain fees collected for a corpus fund to subsidize fees for BPL students. BPL students will pay subsidized fees and can get refunds if they paid more than the fixed amount, or the excess can be adjusted against future fees. The State of Kerala must release the corpus fund fees to the colleges within three months. NRI students must pay the full approved fees and are not entitled to refunds. The State or Fee Regulatory Committee may ask colleges to submit accounts to ensure compliance.
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