OneSmart goes bankrupt as the tutoring ban moves forward
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Earlier this week, we reported on tutoring company OneSmart Education’s debt woes, including leaked messages from teachers all the way up to the CEO saying the company was on the brink of collapse.
- The company denied the leaks — then declared bankruptcy. Yesterday, it said all programs and learning centers would shut down, citing harsh regulations on tutoring.
- OneSmart sent parents a letter with instructions for claiming refunds on pre-paid tuition for classes that will never happen.
The context: The Ministry of Education said (in Chinese) last month all tutoring companies must stop enrolling students and collecting tuition until they change drastically to become nonprofits by the end of the year.
What’s next: Beijing will probably help bail out parents, the innocent victims caught in the crackdown. As the Chinese government targets a range of industries for rectification, companies and institutional investors will be hit hard, but consumers will get refunds — whether it’s for prepaid online courses or apartments.
