Profit caps on charter schools threaten quality and innovation
Published: April 7, 2025
Today, the government presented its “Report on Profit in Schools.” The report proposes far-reaching restrictions on independent schools organized as limited liability companies. The report also sets higher standards for independent schools to meet quality requirements in their teaching.
“If the government follows through on these proposals, it risks dealing a severe blow to the innovative capacity of Sweden’s school system. Ultimately, it is children and students who will suffer. The proposals for higher quality standards are positive. But the increased bureaucracy will primarily affect small independent schools, thereby weakening the school system as a whole,” says Bijan Fahimi, CEO of the Tellus Group, in a statement.
The government commission “Investigation into Profit in Schools”(2025:37) submitted its interim report to the government today. Among other things, the commission proposes that profit distribution be prohibited in a number of specific situations, such as in cases of quality deficiencies, at newly established schools, or following changes in ownership. It also proposes that each school unit be reported separately and be a separate legal entity. The inquiry also includes proposals for penalties in cases of low quality and restrictions on dividends in cases of low quality.
“We welcome the proposals for stricter quality requirements in school operations. The report’s proposal to limit dividends for school operators that fail to meet standards is fundamentally positive,” says Bijan Fahimi, CEO of the Tellus Group, in a statement.
“It is essential for quality and development that schools’ finances are in good order,” emphasizes Bijan Fahimi.
“It’s a myth that independent schools have high profit margins. Margins at smaller schools are only a couple of percent; larger independent school operators might reach up to five percent. The fact that these schools are run for a profit is a sign of high quality and operational efficiency.” Profit is necessary for buffers and investments, continues Bijan Fahimi, CEO of the Tellus Group.
– Right now, the world is marked by unrest on many fronts. The national government and local authorities must therefore devote their efforts to external and internal security, as well as to ensuring economic growth. Independent schools and the entire business community are an important part of society that must join forces to promote security and development. Let’s focus on that instead of increasing bureaucracy for independent schools, says Bijan Fahimi in a closing comment.
