Private schools pocketing over Rs5bn by ignoring scholarship quota, Islamabad High Court informed
ISLAMABAD: In a revelation that underscores a massive gap between legislative intent and ground reality, it has emerged that private educational institutions (PEIs) in the federal capital are allegedly pocketing between Rs5 billion and Rs6 billion annually by failing to implement a mandatory 10 per cent scholarship quota for deserving students.
The controversy surfaced before the Islamabad High Court (IHC) during the proceedings of a writ petition filed against fee structures of private schools.
IHC Justice Raja Inaam Ameen Mihas took up the hearing. According to official documentation and reports submitted to the court by the Private Educational Institutions Regulatory Authority (Peira), the scale of non-compliance by these institutions had effectively deprived tens of thousands of students of their right to free education.
The report provides a comprehensive census of the private education sector in the Islamabad Capital Territory (ICT). Currently, there are 1,571 registered private institutions operating across five zones: 298 in urban areas, 355 in Tarnol, 212 in Bhara Kahu, 262 in Sihala and 444 in Nilore.
Peira report says at least 38,900 students should be receiving entirely free education in these schools
Collectively, these institutions accommodate a total of 389,000 students. Under the provisions of the Right to Free and Compulsory Education Act, 2012, specifically Sections 11, 20, and 26, every private school is legally obligated to provide free education to 10 per cent of its total enrollment. This quota is intended for high-achieving students from low-income families and disadvantaged children.
Simple arithmetic applied to the official data suggests that at least 38,900 students should be receiving entirely free education in these schools. However, the court was informed that the majority of PEIs had failed to implement the 10 per cent policy. With average tuition fees in Islamabad’s private sector reaching substantial levels, legal observers and experts estimate that the financial value of this withheld subsidy ranges from Rs5 billion to Rs6 billion per year.
In response to judicial scrutiny, Peira recently intensified its efforts to enforce the law. A circular dated September 26, 2025, was issued to all registered institutions, demanding an “urgent call for action” regarding the submission of data for the 2025-26 academic session. The schools were given a deadline of October 2, 2025, to provide detailed records of students enrolled under the scholarship quota.
In its report to the IHC, Peira admitted that the process of collecting and verifying this data had been “time-consuming and ongoing”, citing the large number of schools as a hurdle. While some schools have submitted reports (annexed as Annex-A in the court filings), many remain in default.
To ensure authenticity, Peira has constituted an internal monitoring committee. The authority told the court that it intends to ensure compliance was “not merely formal but substantive, in true spirit of the law.” The report warned that strict action was being contemplated against defaulting institutions under the Peira Act and the 2012 federal law.
In a development that has raised eyebrows within the legal fraternity, the petitioner moved to withdraw the petition just as the details of the alleged multi-billion rupee discrepancy became part of the judicial record.
The decision to wrap up the court proceedings without a final adjudication or a conclusive order for the recovery of these funds has sparked debate. Critics argue that the withdrawal allows the status quo to persist, potentially shielding elite institutions from a full forensic audit of their scholarship distributions.
The Ministry of Federal Education and Professional Training has recently pushed the “No Child Left Behind” campaign, setting a target to accommodate 25,000 out-of-school children. While Peira claims to be an active partner in this initiative, the documentation suggests that the existing legal framework for 10 per cent freeships – if strictly enforced – could single-handedly address a larger portion of the educational crisis than the new campaign targets.
While Peira maintains it is committed to “full enforcement,” the absence of a final judicial decree in the wake of the petitioner’s withdrawal leaves the implementation of the 10 per cent quota in a state of regulatory limbo, with billions of rupees in educational subsidies still allegedly unaccounted for.
Published in Dawn, April 14th, 2026
