Sichuan mandates train-first-pay-later for off-campus training courses

Parents in Sichuan province can now breathe easier knowing their children's off-campus training courses will be finished before they pay, thanks to a new policy implemented by the Sichuan Provincial Education Department. This innovative "train-first-pay-later" approach aims to protect parents from financial losses if the training institution goes bankrupt.

The department announced on Tuesday that the policy will be rolled out gradually across all off-campus training institutions. By the end of July next year, all institutions offering academic tutoring in key subjects like Chinese, math, and English must adopt the new payment method. For non-academic subjects like sports and arts, at least half of the institutions will be required to implement it.

The department is also committed to strengthening financial supervision of these institutions. They will oversee the promotion of the policy to parents and ensure they understand its benefits. Pilot programs in select cities have already shown the policy's effectiveness.

Parents have two convenient options for participating in the train-first-pay-later system. They can use credit-payment methods embedded in popular social media platforms like WeChat, similar to renting shared bikes or power banks. Alternatively, they can sign the contract using digital renminbi, which offers strict oversight and automatic generation of course contracts.

As of April this year, nearly 500 training institutions in Sichuan had adopted the new payment method. This trend aligns with China's broader "double reduction" policy, implemented in 2021 to reduce the burden of excessive after-school tutoring and homework on primary and middle school students. While academic tutoring for compulsory education is now restricted, non-academic, interest-based courses like fencing, ballet, and robot programming have seen increased demand.

The train-first-pay-later policy addresses concerns about financial instability in the training industry. Some institutions have experienced financial difficulties and closures due to factors like the COVID-19 pandemic and rapid expansion, leading to disputes with parents over prepaid fees.

The Ministry of Education issued a national management plan for tutoring institutions in March, outlining measures like dedicated accounts for prepaid fees to mitigate financial risks and protect students, parents, and employees. Additionally, local education departments have implemented their own initiatives. Beijing, for example, limits prepaid fees for art and sports training to 60 classes, 90 days, or 5,000 yuan. Guangdong province also launched a pilot train-first-pay-later program in October and incentivized its adoption.