Juren Education Group to Close Down – Perhaps Unable to Complete All Refunds

In the evening of August 31, 2021, Juren Education Group (巨人教育), a comprehensive educational institution in China, announced that it was unable to deliver teaching services this autumn due to the difficulty in operation and the fact that it may not be able to meet the refund requests, according to an article on its WeChat Official Account.  As reported (link in Chinese), the firm's capital chain has ruptured, with about 13,000 students registered for a refund, but there is no timetable for when the refund can be completed.

The announcement shows that Juren is now unable to complete all refund requests. Instead, the company provides its students with a variety of course transfer schemes. The details are as follows:

1. Students transfer to Gaosi Education (高思教育)

The troubled educational institution reached an agreement with Gaosi Education, another training provider in China, where the latter agreed to open all autumn classes to the students from Juren. As of September 2, Juren plans to talk with each student about the intention of the transfer and assist those willing to be transferred to continue the service by signing tripartite agreements.

2. Students transfer to Hetao (核桃编程) or Tongcheng Tongmei (童程童美)

After negotiations, the two institutions have agreed to accept students from Juren. 

3. Personalized (one-on-one) teaching scheme

Until now, Juren has cooperated with Yimifudao (溢米辅导), an one-on-one online educational institution, who has been contacting and communicating with each parent about the transfer.

4. Entrusted third party course transfer scheme

The company is also gaining help from Mengquanquan (萌圈圈), a consulting firm focused on education, to integrate resources, access institutions, and successively design personalized course transfer schemes. At present, 37 online service communities have been established based on Juren's education campus and student attributes.

It is worth noting that the company is not only faced with the refund problem but also with delayed payment of salaries and social insurance of its employees.

According to Caixin Media (Link in Chinese), a campus manager who has worked for the company for four years expressed that the management has not paid wages since June, and the social insurance payment has been cut off as well. On August 11, some employees resorted to Haidian Arbitration Commission for arbitration, which was accepted.

According to its internal documents, under the pressure of COVID-19, compliance governance, and business transformation, Juren is currently in trouble. Therefore, the company decided to suspend all expenditures before the transformation plan is determined. Its insiders said that the management team is actively engaging with employees and communicating with the board of directors, hoping to raise funds as soon as possible and try its best to protect the interests of the firm's stakeholders.  

On July 20, 2021, the CPC Central Committee and the Office of the State Council issued the "double reduction" opinions (hereinafter referred to as "the opinions") aimed at reducing students' homework burden and extracurricular burden. On July 23, "the opinions" officially spread out in the market which regulates the business type and operation time of after-school tutorial institutions and demands that K-12 training institutions shall not be listed for financing and cannot capitalize operations; listed firms shall not invest in K-12 training institutions through the stock market.

The implementation of this policy hit the K-12 education industry hard with many institutions now facing collapse. On August 12, centers of Wall Street English, the Italian English learning service provider, suddenly closed in major cities including Beijing, Shanghai, Guangzhou and Suzhou, without any statement. Soon after it was reported that the Italian company has stopped paying its employees for 3 months, and students are struggling to collect payments worth CNY 10,000 to CNY 100,000 because all senior managers from the institution are now out of contact.  

Juren Education Group, founded in 1994, is an educational training provider in China.  Previously the company offered more than 1,000 courses at the primary and secondary levels, including English, Chinese, mathematics, middle school science, comprehensive quality curriculum, quality education, domestic and overseas tours, and winter and summer campss.