A credit agency warns that more schools are at risk of going bankrupt. The JB school group declared bankruptcy in May. Photo Jonas Ekströmer / SCANPIX.

Free schools "a risky sector"

One in every four independent high schools in Sweden is running at a loss, reports newspaper Dagens Industry.

The credit agency UC investigated 129 firms running high schools and found a quarter of them made a loss last year. "Free schools" (friskolor) are publicly funded, but run by private companies, which are allowed to pay themselves the profits.

The risk of schools going bankrupt also rose from 1 to 2.5 percent, according to UC.

“A bankruptcy risk of nearly 2.5 percent is high,” Roland Sigbladh, head of marketing at UC told Dagens Industri.

“The free school sector has a 25 percent higher risk than other publicly listed companies in Sweden.”

In May one of Sweden’s largest free school companies, JB Education, filed for bankruptcy, leaving hundreds of students with the task of finding a new school.

Dagens Industri reports that the country’s free schools are facing tough competition due to demographic changes, and several private equity firms behind the schools are facing financial challenges.

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