Telangana to Unveil New Fee Reimbursement Policy, to Pay ₹200cr pm
Hyderabad: The state government has decided to implement a new fee refund and scholarship policy from the academic year 2026-27 to end inordinate delays and mounting debts that have plagued the system since it was introduced in 2007-08. Official sources said that under the revamped mechanism, the government will release ₹200 crore every month to ensure that there is no refund of fees and scholarship dues from the new academic year.
In the new system, priority in funding allocation will be given to students who apply first. Students were advised to apply immediately after the government issued the notification. District welfare officers will verify and approve the applications, after which fee payments will be released without delay.
Sources said the policy will cover tuition fee reimbursement and scholarships for SC, ST, BC, Minority, EBC and physically challenged students. The guide is expected to be published soon. Welfare departments have prepared the proposals and submitted them to the government, and the finance department and the Prime Minister are expected to give final approval soon.
The decision comes in the backdrop of the escalating fee reimbursement crisis. In the past, repayment funds allocated for a certain academic year were released in the following year, and even this process could not be implemented effectively. As a result, debts accumulated over five academic years have severely affected students who are dependent on government support for their education.
Fee refund arrears have been accumulating since 2021 under the previous BRS government. The Congress government, which took office in December 2023, has inherited dues of around 7,000 crore from the previous BRS regime. Private colleges, however, claim that the total dues, including those for the current academic year 2025-26, have crossed Rs 10,000 crore.
The issue had led to widespread protests by private educational institutions. In 2025, the managements of professional colleges under the Federation of Associations of Higher Educational Institutions of Telangana (FATHI) announced indefinite closure of colleges from September 15, demanding immediate clearance of pending dues. Following negotiations with the government ensuring the release of ₹1,200 crore, around ₹300 crore was released on 1 October 2025, leading to a temporary withdrawal of the agitation.
However, this standoff resurfaced during Dasara when colleges intensified their protest plans by announcing a ‘Chalo Hyderabad’ program involving faculty and students. The renewed pressure forced the government to release an additional ₹200 crore. Despite these payments, university managements claim that only around ₹500 crore of the ₹1,500 crore they had demanded has been released so far.
Private college managements claim that the government still owes more than ₹10,000 crore in fee refunds. Managements stated that colleges are facing serious financial stress due to prolonged non-payment of refunds, affecting their day-to-day operations and financial stability.
The delay in the release of refund funds also had a direct impact on students. Due to the postponement or non-payment of government payments since 2021, many students have had to bear the burden of tuition fees in advance. Passing out students were particularly affected as some private colleges reportedly refused to issue degree certificates and transfer certificates unless students paid the dues themselves.
Earlier this month, the Telangana High Court intervened and directed the state government to ensure a strict and enforceable timeline for payment of pending dues before the start of the next academic year 2026-27. The Supreme Court is scheduled to hear the case again on June 24. The government hopes that the new monthly fund release mechanism will solve the long-standing problem and restore trust between students and educational institutions.
