The cost to get a postgraduate business management degree at one of the top schools in India keeps going up, according to a new report, and seems likely to go up again next year —and the year after that, if trends continue.
Fee hikes at the three main campuses of the Indian Institute of Management — Ahmedabad, Bangalore, and Calcutta, collectively known as IIM-ABC — have been occurring on such a regular basis in recent years that school officers are communicating to students and prospective students that they should expect them annually, according to report at Moneycontrol.com, an online source for news and analysis about the Indian economy.
With a fee hike announced today (March 7), a postgraduate management degree from IIM-A — regarded by many as the best B-school in India, ranked 29th globally by the Financial Times in 2017 — costs about 2.1 million rupee, or 21 lakh, the equivalent of about $32,277. Until the recent fee hike, an MBA there cost 19.5 lakh, or about $29,972.
HIGHER PROFILE, MORE INTERNATIONAL FACULTY, HIGHER FEES
Analysts expect the increase in cost of a postgrad business degree at IIM-A to lead to hikes at the other IIM schools (there are 13 in all) and, probably, many other business schools in India. Fees at the older IIMs, including the ABCs, are increased depending on the rate of inflation and costs involved. At IIM-B, a management degree for the 2017-2019 cohort is 19.5 lakh, while the cost of the degree at IIM-C is 19 lakh, or about $29,203.
Newer IIMs, too, have increased their fees in recent years as the profile of the Indian business degree improves internationally and associated costs — such as the cost of importing international faculty — rise.
“On one hand, inflation has been on the rise, while on the other we are getting many more professors from abroad to teach at the campuses,” an unnamed senior IIM executive told Moneycontrol News. “This translates into higher tuition fees.”
‘MY PROUDEST ACHIEVEMENT IS TO GO TO’ IIM-A
The ABCs are the top schools in India, and IIM-Ahmedabad is the most prestigious of all, says 2000 IIM-A graduate Sanjeev Kumar, now a faculty lecturer at the University of Michigan Ross School of Business. In January he described for Poets&Quants how some half a million Indians apply for IIM-A’s 200 yearly openings; compare that to Harvard, one of the most exclusive schools in the U.S., which admits about 15% of applicants.
“In my academic career, my proudest achievement is to go to that place,” Kumar says. “It’s unimaginable to a U.S. audience how hard it is to get in. In India, everybody who is academically bright will take a shot at getting into the school. So literally if you choose the 200 brightest people in India every year and your put them on that campus — that’s what it’s like.”
As far as expenses are concerned, the learning environment at IIM-A is far different than what most North American and European B-schools offer. “It’s not like the U.S. where you go to school and you live in your own apartment,” Kumar says. “This is like a dorm for everybody, so everybody lives on campus, everybody eats out of the same dining hall, it’s a 24-hour engagement.
“You go to class in the morning, which is right next to your dorm, then you have lunch in the dorm. It’s a very strong, very tight-knit community.”
EXEC ED COSTS GOING UP, TOO; BUT SMALLER SCHOOLS MAY ACTUALLY LOWER FEES
In a statement to Moneycontrol News, IIM-A said that general inflation and implementing the Seventh Pay Commission have increased costs, leading to the latest fee hike. (The commission, the seventh since India’s independence from the UK in 1947, reviews and makes recommendations on the work and pay structure of all civil and military divisions of the government.) IIM-A added that it is also committed to ensuring that deserving candidates aren’t kept out of B-school for financial reasons; if financial aid were to rise, it would be in keeping with the 30% increase in financial aid at IIMs since 2010. One-third of IIM-A students, for example, receive some form of financial aid.
For executive education programs, fees start upward of 25 lakh (about $38,426), but the dynamic is different than in the U.S. and Europe, with companies usually sponsoring senior staff (though cost pressures may be reducing the frequency of that arrangement). Business school officials told Moneycontrol News that the cost of an executive management degree is expected to jump to 27 or 28 lakh — between $41,500 and $43,037 — for the incoming 2017 cohort.
Meanwhile, as the IIM schools raise fees, some smaller B-schools in India may actually lower theirs to compete with the more well-known schools, Moneycontrol News reports.
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