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New Oriental edtech arm Koolearn to suspend after-school tutoring services

Written by Jiaxing Li Published on     2 mins read

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After major layoffs, embattled edtech companies are now reshaping their business models to survive.

Koolearn Technology, the online education arm of New Oriental Education, said on Monday that they will no longer offer off-campus tutoring services to students between kindergarten to ninth grade. This development is a consequence of the Chinese government’s declaration that edtech providers and cram schools can no longer operate on a for-profit basis by offering classes that are part of the country’s core curriculum.

Koolearn’s decision was made to comply with China’s new regulations to cut the “twin pressures” of heavy homework loads and intense private tutoring schedules, Koolearn said in an open statement sent to the Hong Kong Stock Exchange. By the end of November, Koolearn will suspend all after-school tutoring in core subjects for students from kindergarten to ninth grade.

In recent months, China has rolled out a slew of regulations that are meant to preserve the mental and physical well-being of its school children. Homework assignments have been cut back, and private tutoring has been curtailed as intense pressures have led to the development of detrimental mindsets in students and their parents.

These rules are not limited to academics, but also govern activities like playing video games. Underage gamers are now limited to three hours of screen time per week.

Cram schools and their online counterparts were once considered essential to students who wanted to attain high scores on public exams, but these options have evaporated. In Beijing alone, over 60% of private tutoring centers have either downsized or shut down, according to a series of reports released by the Ministry of Education.

Edtech firms have laid off their tutors, changed their business direction, and are currently on the lookout for new opportunities. Many have shifted to interest classes, adult tutoring, and the development of smart educational devices. Others have opened entirely new lines of business, like Yuanfudao, which was one of the largest online tutoring giants in China. In late September, it invested in a clothing company and plans to produce a line of down jackets, Late Post reported.

Koolearn said it will continue offering classes that are not part of China’s compulsory education curriculum while it explores new business opportunities.

As edtech firms wind down, China’s parliament passed a new education law on Saturday that indicated it is up to parents to arrange reasonable study and leisure time for their school-aged children. The law indicates that parents may be “admonished” if their children commit serious misconduct or crimes.

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