Published Jul 21, 2026 | 8:00 AM ⚊ Updated Jul 21, 2026 | 8:00 AM
Synopsis: Pending fee reimbursements from the government, flailing colleges and increased unemployment rates have created a vicious cycle that has turned into an economic, social and demographic challenge for Telangana. Yet, successive governments appear unmoved.
For nearly two decades, Telangana’s fee reimbursement programme has been celebrated as one of India’s most transformative social justice initiatives. It opened the doors of engineering, pharmacy, degree and professional education to lakhs of students from economically weaker families. It created the first generation of graduates in lakhs of rural households. Yet today, the same programme has become a symbol of total administrative failure.
Currently, more than 20 lakh graduates from the Scheduled Castes, Scheduled Tribes, Backward Classes, the Economically Backward Classes, and minority communities cannot pursue employment or further education because their completion certificates have been withheld over pending fee reimbursement dues.
The Telangana High Court has repeatedly questioned the state government over its inability to clear fee reimbursement arrears. Educational institutions have informed the court that dues relating to academic years beginning from 2020-21 remain unpaid, with estimates of pending reimbursements ranging from ₹10,000 crore to ₹12,000 crore in different proceedings. The KCR regime failed to reimburse approximately ₹6,000 crore while arrears rose to ₹12,000 crore under the Revanth Reddy government, official government submissions show.
The consequences are severe. Lakhs of students have reportedly been unable to obtain original certificates required for employment or higher education because colleges, starved of reimbursement funds, withheld documents until dues were settled. Student organisations argue that this has delayed careers, overseas admissions and job opportunities.
Even the colleges are bearing the brunt, with many private higher educational institutions becoming silent financiers of the government’s welfare programme. Engineering, pharmacy and degree colleges admitted students under the assumption that reimbursements would arrive on schedule. Instead, many institutions have been carrying unpaid government liabilities for years. Unable to pay their faculty salaries or maintain laboratories, several institutions have downsized while others have shut down altogether over the past decade.
AICTE data shows that, driven by reimbursement debts, falling demand and financial distress, Telangana has witnessed a substantial reduction in the number of engineering colleges since 2016. The number of these colleges fell from 203 in that year to 170 in 2026.
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The warning signs have been visible for years.
Engineering admissions in Telangana have steadily declined compared to the expansion witnessed during the previous decade. Many degree colleges outside Hyderabad struggle to fill seats. Since 2016, the degree student (including engineering and pharmacy) enrolment ratio has fallen from 57-58% to 44-45% in 2025, according to the All India Survey on Higher Education (AISHE) & Telangana State Council of Higher Education (TSCHE) reports. This confirms that demand for higher education is falling.
Several factors explain this decline:
Parents increasingly question whether borrowing money for higher education is worthwhile when graduates remain unemployed for years. The fee reimbursement crisis has therefore become not merely a financial issue but also a trust crisis.
The Telangana government’s decision to move towards Direct Benefit Transfer (DBT), crediting reimbursement amounts directly into students’ bank accounts, has generated fresh doubts.
Firstly, more than 20 lakh students who have passed out are waiting for their academic certificates due to pending fee reimbursement bills.
Secondly, how can a government that has already failed to release Rythu Bharosa or pensions on time release the tuition fees and scholarships to students?
Student organisations fear delays in DBT processing could disrupt admissions and academic continuity. The High Court has already intervened multiple times while monitoring the implementation of the new system. The High Court also said if the government failed to transfer funds to student accounts, the colleges are allowed to collect from students. The problem has come full circle to where it all started: No money, no education.
Parents had to undergo the severe trauma of selling everything to pay the fees and get the certificates, hoping to get their children employed. However, this trauma only aggravates when they realise the job market is also shrinking due to the government’s failure.
Unfortunately, reimbursement delays are only one part of a much larger problem. Higher education is expected to improve employment prospects. Instead, Telangana has witnessed a continuous increase in the unemployment rate largely attributable to the government’s misplaced policies.
According to the recent Periodic Labour Force Survey (PLFS) 2025, Hyderabad had an unemployment rate of 6.8%, way above Bengaluru (2.8%) and Chennai (4.4%). Day by day, the Revanth Government is failing the youth with its misleading promises and misplaced priorities.
The government promised ₹5 lakh through the self-employment scheme Rajiv Yuvavikasam, but 43 lakh applications have been left unattended. This government has completely failed to understand the mounting crisis with its high-handed approach towards the problem.
Telangana today faces a dangerous chain reaction:
The cycle is repeating.
The tragedy is not merely that fee reimbursement payments have been delayed. The real tragedy is that a policy originally designed to create opportunity now risks an entire generation of failed youth.
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(Edited by R Rajesh Kumar.)
