People often ask how some private school-owners are so wealthy if schools are supposed to be not-for-profit. Others talk about how private schools exploit parents with high fees and extra charges. But there is an entire subset of private schools that has escaped notice. These private schools – who do not engage in profiteering – is where the average Indian turns to in the hope of a promising future for their children.These are small neighbourhood schools, commonly called budget schools, that educate the children of shopkeepers, daily-wage earners, drivers, domestic workers and many low-income families who dream of giving their children “something better” than what they had. These schools charge fees so low that most of us would not believe it if we heard the number ourselves. Often, parents fail to pay the fees on time. Nevertheless, these schools keep their engines running. They cannot afford to shut down – doing so would disenfranchise an entire community from its fundamental right to school education.This segment of private schools occupies the space between private schools and government schools – marginally better than the latter, far below the former. For many low-income families, they offer greater institutional accountability and access to English-medium education than government schools, without the prohibitive costs of elite institutions.They are present all across the country, quietly serving as the backbone of local education and significantly reducing transportation costs for many low-income families. A study from the ‘Journal of Development Studies (2020)’ also shows that 70-85% of children in private unaided elementary schools pay less than Rs 500 a month, with only 15-30% paying higher fees. Further, UDISE+ 2024-25 data shows that private schools enroll nearly 95.9 million students, with about 41.5% at the primary level and 10.6% in pre-primary, reflecting their considerable role in foundational schooling. Much of this is driven by low-fee neighbourhood schools that are accessible to local communities.Staff salaries at budget schools are extremely low compared to their government school or elite-private school counterparts. According to a 2023 report by TISS, private school teachers at the ECCE (Early Childhood Care and Education) level earn almost 33% less than government school teachers. While primary school teachers earn more than ECCE teachers, they still earn 64.5% less than their government school counterparts at the same level; and similarly, secondary teachers earn 65% less than their government school teacher counterparts. In many such neighbourhood schools, primary-school teachers often earn as little as Rs 5,000 – Rs 8,000 a month; a reality that is rarely acknowledged in mainstream policy conversations.Heads of budget schools that we interacted with expressed spoke of the corelation between low fees and low salaries, but not because the budget schools want it this way – it is the only way they can survive. For many teachers and staff, this salary is often their first step towards financial independence and dignity. These schools are not just educating vulnerable communities; they are also supporting families that depend on this income.Conversations with such small private school owners reveals that these schools function in humane and collaborative ecosystem. One of the school heads described it as “a beautiful system built on humanitarian grounds and mutual collaboration”. During the pandemic, when many parents lost their incomes, families tried to borrow small amounts to pay fees out of gratitude for the affordable education that their children receive here. “We too borrowed to pay salaries,” he said, “because our teachers are also from underprivileged backgrounds. They cannot get into corporate schools, a government job is hard to secure, and they are not accustomed to farming to fall back on.” Teachers, he noted, did not protest even when salaries were delayed or halved during the pandemic. Another head of a budget school told us, “If we were running for profits, we would not have survived this long. We run mostly on service orientation.” He further mentioned that they struggle with regulations, paperwork, and compliance just as much as the materially abundant elite schools. Their vulnerability stems largely from long-standing structural constraints – policy frameworks view schooling through a simple public-versus-private lens – failing to distinguish between elite private institutions and low-fee neighbourhood schools with vastly different capacities. For decades, public debates have circled around a familiar question: should private-school teachers be paid more? These discussions often frame the issue as one of underpayment. However, the foundational issue is that of a fragile financial ecosystem which remains unaddressed.A school principal from coastal Andhra added that during cyclones and floods, schools often waive fees because most parents depend on agriculture and are the first to be affected. She further expressed that sustained support, especially during periods of distress, could significantly strengthen the quality of education these schools provide. “The government knows our contribution very well,” a senior teacher from the same school said, “and with some support, we can deliver even better quality.”If such schools are unable to withstand repeated financial shocks, many of them will have no option but to shut down. While students may shift to government schools, often at the cost of perceived quality or continuity, the immediate and most severe impact will fall on teachers and support staff who depend on these institutions for their livelihoods.Budget schools are a source of employment to thousands of women and young graduates who might not get opportunities elsewhere, like BA/BSc graduates, housewives, first-time job seekers who may not be able to move out from their locality due to socioeconomic externalities. These schools provide them with capital – both economic and social.As per UDISE+ 2021-22, women accounted for 63.05% of the workforce in private unaided schools. In 2024-25, this figure grew to 67.4%, reinforcing the sector’s strong reliance on women in its labour force.Further, about 83% of all teachers are graduates, and 90% have some professional qualification. Yet, 16% of private-school teachers (compared to 4% in government schools) lack professional credentials, with most; (61%) of them teaching in private schools. Though lack of professional qualifications among a minor section is an issue, it can still be argued that there are positive externalities created on account of the fact that they predominantly work in rural areas which struggle with access to basic education. As a handful of stakeholders in this budget school ecosystem expressed, they are operating in the same regulatory landscape as that of elite schools, which create additional constraints for them. The right to education is a constitutional right which has to be made meaningful through statutory and executive means.However, using the same broad brush may push many of these schools towards closure: their fee structures remain extremely low, operational and maintenance costs are rising, and fees often cannot increase at the same pace without pricing out the very families they serve. On top of this, corporate school chains are now entering tier-2 and tier-3 cities and towns, creating newer competitive pressures. The undoing of these budget schools can lead to drop-outs or significantly burden government aided schools which are already limited in number.Policies must acknowledge these budget schools that aid the state’s aspirations towards access to education for all. Rationalising regulations, reducing administrative burdens, investing in teacher upskilling, and expanding the limited network of government-aided schools; which currently number only around 79,349 across India, may be required to ensure that these budget schools are not crumbled by overregulation. Adarsh Venkat Kota is a PhD student from The Department of Economics, BITS Pilani, Hyderabad Campus. Sreehari VS is a lawyer.