IIM-B fee hike, flagship MBA at the top 3 costs Rs23L, Leaves Middle Class Aspirants With A Single Choice Of Education Loans
Hiking tuition fees for the Institute of Management, Bangalore (IIM-B) for its flagship MBA program are now paid at par by India’s top three B-schools. The charges stay the same if a student gets into IIM-A (Ahmedabad), B or C (Calcutta) – Rs 23 lakh.
In spite of the Covid 19 Pandemic, IIM Ahmedabad and IIM Calcutta did not raise fees for the incoming batch.IIM Kozhikode tops the charts with the highest number of full fee waivers last year at a lower fee of Rs 19 lakh (not increased). The annual fee for PGP MBA and PGP MBA (FABM) is Rs 23 lakhs (batch 2020-22). Given the condition of Covid-19, the program fee has not been raised this year,’ said Shailesh Gandhi, dean, Programmes, IIM-A.
93 first-year students at IM-A obtained need-based scholarships from the institute during the 2019-20 academic year. The MBA fee for the MBA batch 2019-21 at IIM-C was Rs 22.5 lakh, but the same was retracted after declaring a fee hike.
The MBA program fee is updated annually by IIM Calcutta, taking into account current inflation and other economic considerations. While the revised fee for the MBA 2020-22 batch was suggested before Covid-19, owing to the coronavirus pandemic, the competent authority took cognizance of the current economic situation and agreed to scale it down by holding a two-year MBA fee of Rs 23 lakhs, said Sumanta Basu, chair of admission. Calcutta’s IIM.
The two-year PGP 2020 batch costs Rs 23 lakh at IIMB, while Rs 21 lakh was the PGP 2019batch rate. Last year, the number of students with a 100% fee waiver was six, and 48 students received a partial fee waiver.
Education Loans: A Trap?
The creation of IIMs was aimed at generating human resources armed with the administrative and decision-making skills necessary for the country’s increasing industrialization.
Such management skills required dominance particularly after 1991, when investment and privatisation supported the emergence of giant companies in the liberalized Indian economy.
Fee Hike Worse for the Poor during COVID
Restructuring payments are related to current inflation and associated prices for faculty and facilities by the management of these premier institutions. On the other hand, the regulatory bodies within the framework of the UGC and AICTE are limited to changing their fee arrangements or, rather, increasing them. In its notification dated 1 May 2020, AICTE recommended that the B-schools offering AICTE accredited PGDM services not raise either the entrance fee or the tuition fee for both current and new students for the 2020-21 academic year.
These two conflicting stories clarify a serious concern: fee increases in uncontrolled IIMs and no fee rises in regulated institutions. The hump of an obstacle for worthy aspirants to gain managerial skills is the fee hike in premier management institutions. Due to the coincidental time of fee hike and economic crisis triggered by the COVID-19 pandemic, this dilemma is further aggravating. Increased fees in management education have further repelled the hope of aspirants from the door of premier institutions as the pandemic has taken a toll on life, livelihood and individual profits. Collectively, the new situation compromises the most basic purpose of nation-building education, which attempts to offer quality education to prospective and potential nation-building workers.
Regulation Of Fees
Education is not a commercial product intended to satisfy the need of a person and should thus not be left uncontrolled, especially in terms of the arrangement of rates or payments. By creating skilled and equipped human resources, education serves a greater function of social upliftment and nation-building. In premier management institutions, an inflated fee leaves most deserving middle-class aspirants with the only option of an education loan to finance their aspirations. Increased IIM fees dramatically push up the demand for loans. In addition, the managerially-trained minds with the burden of liabilities endured limited mobility and lack of innovative thought, thus thwarting the economy’s competitiveness and overall value addition. It is high time for policy makers to take a hard look at the shift in the fee system of India’s leading national-interest governing bodies. An ordinary rise in technical courses’ fees will discourage aspirants from pursuing their aspirations of gaining management skills and coveted professional role.
This exercise reveals that the pay bundle delivered by IIMs, rather than cost structures, is the main driver of the fee structure. This is analogous to the conventional trading system of a retail item, in which the product price is dictated by supply-demand dynamics in a market.
Cynical Relation Between IIM’s Fee and Packages
Thinking from the profit point of view, it is well-known that the leading management institutions supply business giants with heavy-weight bid letters.
The primary cause for rivalry among management aspirants and even professionals to get into premier IIMs is these high-placement packages and white-collar career profiles.
In IIM, the more packages are sold, the higher the competition, and thus the demand. In other words, the relationship between the placement kit and IIMs fees is worth exploring. To this end, for the last year 2020, we obtained the average bundle and fees of all twenty IIMs and conducted a linear regression analysis. A important cyclical relationship is found between the payments of IIMs and the provided kit. This means the IIMs are expected to charge more than other IIMs by providing a higher wage and a lucrative work opportunity. In the methodological study, the outliers turned out to be top IIMs (as per the National Institutional Ranking System, NIRF), IIM-Ahmedabad, IIM-Bangalore and IIM Calcutta. Compared to other IIMs, they offer exceptionally high packages (average Rs 26.8 LPA) and therefore charge excessively high fees (average Rs 23 Lakh). The latest IIMs, on the other hand, manage to have a comparatively narrower placement kit and cost less.
Despite serving a boon for borrower students, education loan raises a demonic threat of repayment on a fixed term. As a burden, it often travels with students before and after studying. Many of the timely outstanding loans often result in bad debts and ruin financial institutions’ balance sheets. It is hard to bear another obligation in nation-building with an already existing debt liability load on their shoulder. In order to monitor such an unchecked fee rise in leading organisations, lawmakers must take action forward.