Harvard | Mr. Public Finance
GMAT 720, GPA 3.9
Stanford GSB | Mr. Rocket Scientist Lawyer
GMAT 730, GPA 3.65 Cumulative
Kellogg | Mr. Danish Raised, US Based
GMAT 710, GPA 10.6 out of 12
Harvard | Mr. Startup
GRE 327, GPA 3.35
Darden | Mr. Leading Petty Officer
GRE (MCAT) 501, GPA 4.0
Harvard | Ms. Almost Ballerina
GRE ..., GPA ...
Darden | Mr. Federal Consultant
GMAT 780, GPA 3.26
Harvard | Mr. Polyglot
GMAT 740, GPA 3.65
Darden | Mr. Engineer Consultant
GMAT 730, GPA 3.47
Stanford GSB | Mr. Navy Officer
GMAT 770, GPA 4.0
Stanford GSB | Mr. Systems Change
GMAT 730, GPA 4
Tuck | Mr. Consulting To Tech
GMAT 750, GPA 3.2
Harvard | Ms. Ambitious Hippie
GRE 329, GPA 3.9
Harvard | Mr. Milk Before Cereals
GMAT 710, GPA 3.3 (16/20 Portuguese scale)
Harvard | Mr. Sales To Consulting
GMAT 760, GPA 3.49
INSEAD | Ms. Hope & Goodwill
GMAT 740, GPA 3.5
INSEAD | Mr. Airline Captain
GMAT 740, GPA 3.8
Stanford GSB | Mr. MBB to PM
GRE 338, GPA 4.0
IU Kelley | Ms. Biracial Single Mommy
, GPA 2.5/3.67 Grad
Darden | Ms. Unicorn Healthcare Tech
GMAT 730, GPA 3.5
Stanford GSB | Mr. MBA Class of 2023
GMAT 725, GPA 3.5
Chicago Booth | Mr. Guy From Taiwan
GRE 326, GPA 3.3
Stanford GSB | Mr. Energy Reform
GMAT 700, GPA 3.14 of 4
Ross | Mr. Verbal Engineer
GMAT 710, GPA 3.3
Ross | Ms. Packaging Manager
GMAT 730, GPA 3.47
Wharton | Mr. Sr. Systems Engineer
GRE 1280, GPA 3.3
Chicago Booth | Mr. Semiconductor Guy
GMAT 730, GPA 3.3

The Privatization of California’s B-Schools

In the past few years, billions of dollars have been slashed from California’s higher education budget. Some have warned that the cutbacks are impacting the quality of a state university system that has long been considered the crown jewel of public higher education.

What has been the impact on the state’s premier public business schools?

Surprisingly, say the B-school deans, there’s been little to no impact. A year ago, faculty and staff endured a “furlough” that led to a one-time average pay cut of eight percent. But the prestige and quality of the full-time MBA programs has been protected as state support of the schools has diminished.

What has occurred is a quiet privatization of business education. The B-schools have pushed through dramatic increases in MBA tuition and fees, stepped up efforts to increase endowments, and added more non-degree executive programs that produce “revenue surpluses” to offset the cuts.

“Basically, all of us have been phasing out our reliance on state funding for many years,” says Steven C. Currall, dean of UC-Davis’ Graduate School of Management. But Currall winces at the notion that he and his fellow deans have “privatized” the business schools.“Some in the UC system see privatization as radioactive,” he concedes. “I prefer the words financial sustainability. We’re reducing our reliance on state funds which makes our business model much more akin to a private university based more heavily on tuition and endowment. That is the model we must pursue.”

COST OF A BERKELEY MBA UP 301% FOR RESIDENTS AND 142% FOR NON-RESIDENTS

The impact of that transition has been felt most by students. Over the past ten years, for example, the largest increases in MBA tuition have occurred in California public programs. Berkeley’s Haas School, the highest ranked of the full-time MBA programs in the state, boosted the price of its two-year MBA to state residents by 301% to $86,396 this year from $19,996 in 2001. Non-resident tuition jumped by 142% to $100,356 from $41,404 in the same timeframe. In comparison, the two-year tuition bill at Stanford rose 72.5%, while the price of a Harvard Business School MBA increased by 79.6%.

Ten years ago, a California resident who went to Berkeley paid only 31% of what a graduate student paid at Stanford for the MBA degree. Today, state residents who go to Berkeley pay 78% of what Stanford students pay. The differences are similar at UCLA’s Anderson School and other University of California business schools.

More shocking, perhaps, is how these increases–along with a sluggish economy–have dramatically altered the payback of the MBA degree. Graduates of Berkeley’s Class of 2000 earned median starting base salaries of $85,000. Last year, Haas MBAs earned median salaries of $110,000 each. So while the non-resident tuition bill has risen by 301%, median starting salaries have increased by just 29%.

WHAT WAS ONCE AN EDUCATIONAL BARGAIN HAS BECOME A HIGHER-PRICED PUBLIC UNIVERSITY MBA

Within ten short years, what was once one of the world’s educational bargains in graduate business has become one of the nation’s higher-priced public university MBA programs. The public universities in California, of course, have plenty of company. The University of Michigan’s Ross School of Business and the University of Virginia’s Darden School effectively “privatized” their full-time programs long ago.

About The Author

John A. Byrne is the founder and editor-in-chief of C-Change Media, publishers of Poets&Quants and four other higher education websites. He has authored or co-authored more than ten books, including two New York Times bestsellers. John is the former executive editor of Businessweek, editor-in-chief of Businessweek. com, editor-in-chief of Fast Company, and the creator of the first regularly published rankings of business schools. As the co-founder of CentreCourt MBA Festivals, he hopes to meet you at the next MBA event in-person or online.