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Language schools in turmoil

Excitement might not be the first thing that springs to mind when you start reading about the language schools’ market. But never forget that these are ‘unorthodox’ times. Although you probably anticipate boring trends and unsurprising tendencies, brace yourself, because you might well tap into something completely different. A very Hungarian story lies ahead!

It all began with the changes implemented to the structure of the training levy a year ago. Companies back then were allowed to decrease the amount to a certain level, by paying for the training or education of their own employees. While many companies chose industry-specific programs or team building events, language education was one of the most popular and widespread uses of the training levy. A simple change to the regulation abolished this option, leaving companies speechless – and many language schools out of work in early 2012.

“It was a disaster for the entire industry, and that was more or less what 2012 was all about,” says Tamás Légrádi, the founder and owner of Tudomány Nyelviskola, and vice president of NYESZE, the Association of Professional Language Schools. “The volume of privately-financed language courses has been in freefall in the past two or three years, so what kept this industry moving was basically corporate language education,” he says. With the abolition of state subsidies, this engine, too, came to a halt.

According to the original plans, this state training subsidy was to be replaced by a social fund called TÁMOP (Operative Program of Social Renewal), but stating that its success is somewhat controversial is clearly a polite way of putting it. Industry insiders, who preferred to remain anonymous, unequivocally dub TÁMOP the “non plus ultra of bureaucracy and dilettantism, and the hotbed of corruption”. Especially when TÁMOP 2.1.2 entered the picture last November, with the ambitious goal of providing free or almost free language courses for 100,000 Hungarians.

Make no mistake, the aim of the program is something that was more than welcomed by the entire business and that was much needed by the country as well. But it appears that in the implementation phase something, somewhere went awfully wrong. We have talked to many people in the area, including heads of well-known, major language schools as well as smaller operations, and while their views on the current developments are nearly identical, when it came to TÁMOP 2.1.1, all of them insisted on talking off the record and remaining unnamed.

It is worth highlighting that we are talking about a project with a budget of HUF 12.8 billion. Of this, HUF 9 bln can be used for educational purposes. As for the very valid question what happens with the remaining HUF 3.8 bln, “Exactly!” was the best answer the industry managed to come up with.

The structure of the project is rather simple: there is a HUF 90,000 per person budget (multiple this by the 100,000 potential participants, and you get the HUF 9 bln educational chunk of the program), which can be spent on language courses at schools that are qualified to partake in the program. Of course, there are special conditions on both sides, but it’s the actual implementation, again, where things start to get tricky.

After the program launch on November 7, five language schools were almost immediately granted all the necessary licenses and authorizations. Hundreds of other schools are still waiting (at various stages of the authorization procedure) to be green lit, and hope to start their courses sometime in March, at the earliest.

A closer look at the list of the “priority” participants reveals some more awkward details. Dover and International House language schools are both regarded as quality institutions, although both also maintain strong ties to the current administration. The owner of IH, Anna Sikó is a former chair of the British Chamber of Commerce in Hungary. More pertinently here, she is also the former English teacher of Prime Minister Viktor Orbán, and the premier personally thanked her for being part of Fidesz’s “mental heartland”. Dover was previously known as the preferred supplier of the Hungarian Armed Forces. Two companies from Nyíregyháza (northeast Hungary), founded by Judit Szabari Bucskóné, also immediately got all the necessary licenses. Curiously, she is a board member on the program’s accreditation committee. Another surprising early winner was Albacomp Rendszerház Kft., a company with no previous experience or references in language education, whatsoever. Neither has it teachers, by the way.

The bureaucracy involved is a serious obstacle for most companies, if not for the chosen few. Applications take an awful lot of paperwork, hearing back from the authority takes between 30 – 45 days per round (the application takes at least two rounds, since first the programs, and later the actual classes, need to be approved), and based on general feedback, the approval rate is in the neighborhood of 5-10%. When courses can finally be launched, every class has to be documented with a photo as well as a written document of the attendance, so documentation will remain heavy at later stages, too.

“A program of this volume is capable of completely re-arranging the entire industry,” says the head of a well-known language school, who insisted on being unnamed. “Those clients who are willing to participate in language courses are now waiting for the ‘free’ opportunity, and have been doing so since early November. We told our students that we have submitted our applications, and most of them are willing to be patient, but they have been waiting for quite some time now. The worst part is that we really don’t know what we can tell them: we expect that we can start the courses in early March, but we haven’t had the approval on any of our classes yet. Until then, everything is completely uncertain,” the head adds.

Another twist in the story is that once the authority approves a course, it immediately becomes open to the public through an online registration form. This means that while a language school might have prepared by running pre-registrations, checking the level of knowledge of their students, agreeing class dates and timetables, these students will have no priority over those who randomly register via an online form. So potential students, if they are not quick enough, might find that they have been waiting for months in vain, because others have immediately filled up the class they want to attend.

“The problem with these strict regulations and the ill-considered processes is that they deter education-centered language schools, and spawn a complete range of companies that are not focused on quality education and students, but on the sole purpose of getting as big a chunk of the subsidies as possible,” says an industry insider we spoke to on condition of anonymity. “Since these tenders need very different skill sets and priorities compared to that of language education, and there are no valid barriers to officially becoming a language school, this area has recently become a gold-mine of project-based companies, running for nothing else but the money,” he adds. Urban legends have also started to spread claiming that there are ways to “lubricate” the machinery of the approval procedure. Rumor has it, for example, that the average cost of getting as many approvals as one is willing to, is one third of the state funds given back to the appropriate person involved in the decision making process.

Not exactly an efficient way of teaching languages to the wider audience.

All in all, the professionals we talked to agree that this is yet another example of a good goal and sufficient funding wasted by poorly designed procedures that will have minimum, if any, benefit from the perspective of the main objective. In the meantime the real problem remains: Hungarians are known for not speaking foreign languages; it seems this is unlikely to change in the foreseeable future.