This week University of California President Mark Yudof approved a proposal by UCLA’s Anderson School of Management to make its full-time MBA program self-supporting.
“We are in a different era at the moment,” Dean Judy Olian said. “The university at large is in a state of declined funding. We must do things differently.”
The decision comes nine months after a UC Academic Senate panel concluded that UCLA’s proposal failed to meet the requirements for self-supported programs and suspended its review. The idea of a self-supported program has been debated for three years; initially, the entire Anderson School sought privatization.
Yudof eventually signed the proposal after acknowledging a change to the guidelines for self-supporting status and laying out several conditions for Anderson. His imminent departure from UC for Berkeley Law School may have also sped up the approval process.
In a letter to UCLA Chancellor Gene Block, Yudof emphasized that the Academic Senate will maintain authority over the program’s curriculum, and that the University of California administration and regents will set tuition. “Thus, a decision about changing the financial status of a graduate professional degree program . . . is fundamentally an administrative decision,” he wrote. The program will be required to provide need-based financial aid at the same levels as full-time MBA programs in the University of California that accept state funding.
UC Berkeley Haas School of Business Dean Richard Lyons said in a statement that he was delighted that Anderson succeeding in getting approval for the transformation.
“Dean Judy Olian has been bravely pursuing the goal of gaining maximum financial flexibility over this program so that it can continue to do well in a rapidly changing operating environment,” Lyons said in the statement. “We share in that overall goal at Berkeley-Haas but have taken a different path to achieve it.”
Though Businessweek reported that the program’s self-supporting status will allow Anderson to “aggressively pursue top faculty,” Olian maintains that the change was made with students in mind. “This is not motivating faculty payments, and the university will still have oversight over salary,” she said.
When explaining the rationale behind forgoing state funding, Olian describes a trajectory of dramatic tuition increases over the last two decades. “Anyone concluding that state support protects you from tuition increases hasn’t looked at the data,” she said. “Tuition is going up without necessarily benefiting students.” She expects that the program’s new status will mitigate that trajectory.
Olian is also eager to engage donors in ways that haven’t been possible thus far. “They all overestimate the extent of what they can provide,” she said. She believes Anderson is holding its own among the top schools, but she wants to ensure that it continues to do so. “What we need to do is create a narrative that helps donors understand that we need to compete in terms of our endowment,” she said. “We could have the opportunity to allocate futures in a way that would put our program on level with other programs.”
Since the University of California adopted a new policy on self-supporting graduate programs in 1996, the number has grown from three to more than 40. Five of them are at Anderson: three executive MBA programs, a part-time MBA program and a Master’s in Financial Engineering.