Saturday, March 29, 2008

IIM-A doubles fees: What are they thinking?!

The Indian Institutes of Management (IIMs) have gone crazy. They have an ever-increasing number of companies signing up for partnerships, for recruitment and all sorts of other activities that could and does make them tons of money. But they're going out and hiking the fees instead! I can't imagine any middle-class parent -- even one earning a Sixth Pay Commission income -- being happy about paying these crazy fees. Here's the worst part:
"The board has therefore decided to triple the annual family income limit from Rs 2 lakh to Rs 6 lakh for a student to be eligible for financial support," he said.

Why not? I dont know much about how management school appropriate their money, but all good business schools in the world have plenty of corporate partnerships yet charge steep fees.

Also, in a liberal loan market, with reasonable returns likely for students after graduation, why should parents, middle-class or otherwise, pay for their kids' education at IIM? I had a couple of friends (yes, from the middle class) who went to IIM-A, and both took out student loans without any hassle.
Didn't realize student loans were easy to get in India now. What did they provide as collateral for their loans? "Hamare zamane mein" you needed pretty solid collateral to get even the super-high interest loans...
Here(pdf alert) is an interesting position paper prepared by IIM-A faculty during the Dept of HRD flap back in 2004. Among other things, it argues that fees have never been a barrier for entry based on correlations between family incomes and fees. Link via Avinash (who thinks the paper sucks as far as writing goes).
That will make IIMs truly elite. I think there are too many guys who are mugging stuff to get into IIMs as cost saving measure. Now they gotta think that is that mugging really worth it? It is a good move to make it more elite.
IIMs are good, but calling them "elite" is rather excessive, no?
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