UCLA Approves Self-Supported MBA

In a historic 53-46 vote, UCLA’s Academic Senate today (June 7) approved a proposal to convert the Anderson School of Management MBA program from state-supported to self-supporting.

The proposal now goes to the University of California system-wide Academic Senate and to UC President Mark Yudof, who has the final say. If approved, the change would give the school added flexibility to run its MBA program as if it were run by a private university.

IN-STATE MBA TUITION HAS ALREADY RISEN BY 92.5% IN THE PAST TEN YEARS

But applicants are likely to see little change. Over the past ten years, the Anderson School already has increased its MBA tuition and fees so that they are nearly the same as the fees charged by several other more highly ranked public business schools and some private universities. California residents now pay annual tuition and fees of $45,385 in UCLA’s full-time MBA program, up 92.5% since 2001 when tuition and fees came to just $23,57 a year. The increases for the school’s out-of-state students haven’t been nearly as steep, rising 16.9% over the same period to $52,580 a year from $44,980.

The out-of-state tuition bill is only slightly below other top business schools at public universities. At the University of Michigan’s Ross School, for example, MBA students from out of state now pay $55,575 a year, while at the University of Virginia’s Darden School, MBAs pay $53,900 a year. At Berkeley’s Haas School, annual MBA tuition and fees total $53,396. These schools, however, consistently rank higher than Anderson, which placed 16th on Poets&Quants’ 2011 ranking. Haas is ninth, Darden 11th, and Ross 12th.

And Anderson’s out-of-state costs are not all that different from several private business schools, including the University of Southern California’s Marshall School where incoming MBAs this fall will pay $55,000 a year in tuition and fees. MBA students at the state’s most highly ranked school, Stanford’s Graduate School of Business, will pay annual tuition of $57,300 this year, some $4,720 more than Anderson currently charges out-of-state students.

So the Anderson School’s upside to raise more money in tuition is somewhat limited unless it completely ends its current $7,195 a year discount for in-state MBA students and matches what other more highly ranked publics charge out-of-state students.

The change in status, however, will likely make it easier for the school to raise money from donors and keep tighter control over how those funds are used. Anderson Dean Judy Olian, who has led the controversial effort to change the school’s funding, told the Los Angeles Times that donors have already pledged $19 million in gifts after the change goes into effect. In the past, Olian has said that many would-be donors tended to hold back because they believe the school is sufficiently funded by the state government and doesn’t need the money. Under the proposal, revenue from philanthropy would replace state funding and allow teaching resources to be allocated more effectively and efficiently.

‘WE ARE AT A CRITICAL POINT AT UCLA,’ SAYS DEAN JUDY OLIAN



“Our proposal is a response to the urgent need to find solutions to campus-wide financial challenges,” said Olian in a statement. “We are at a critical moment at UCLA where we must find innovative responses to dramatic cuts in funding while protecting the great engine of research and education we have here. This is a solution that benefits both UCLA Anderson and the entire institution, a small step among many we’re taking on campus. It benefits students across the campus and protects our public mission.” Olian said she expects final approval to occur by July.

Critics of the plan considered it a step toward privatization that would start a trend that could spread to other business and law schools in the UC system. They warned of significantly higher tuition fees that would force graduates to go into severe debt to finance their education.

Under the Anderson proposal, state support that otherwise would flow to UCLA Anderson would instead be available to the campus for use in supporting other programs hard hit by state budget cuts. The net financial gain to the campus is estimated at $8.8 million annually, campus budget officials said. That additional funding to other parts of the school apparently played a crucial role in getting the proposal passed yesterday.

UCLA Anderson officials said the proposal would allow them greater flexibility to grow and enhance the flagship daytime MBA. program. UCLA Anderson would remain integral to the campus and subject to policies and regulations that govern UCLA’s professional schools. The school would continue to have a state-supported doctoral program and a state-supported undergraduate accounting minor.

FIVE OF SIX MASTER’S PROGRAMS AT ANDERSON ALREADY ARE SELF-SUPPORTING

Five of six UCLA Anderson master’s degree programs are already self-supporting, including the fully employed M.B.A. program and the executive M.B.A. program.

The vote by the Legislative Assembly, which includes approximately 120 elected representatives from academic units across campus, followed an exhaustive review by faculty. More than 70 percent of UCLA Anderson faculty and a majority of the school’s Faculty Executive Committee supported the proposal.

A majority of the Senate’s Graduate Council voted against the proposal. UCLA Anderson faculty appealed that result, leading to the June 7 vote by the Legislative Assembly.

“The UCLA Anderson proposal would aid not only the professional school but the entire campus as we adjust to the loss of state funding, so I am very pleased with the outcome,” UCLA Chancellor Gene Block said in a statement.”

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