CNN-IBN had a show yesterday on the fee hike at the IIMs -- and IIM-A, in particular. Since gains from higher ed -- particularly the kind that leads typically, to jobs with astronomical salaries -- are largely private, I'm generally sympathetic to the idea that students pay for their college education. Still I can't help feeling that IIM-A has decided to go for the kill, with annual fee in the range of 5.5 to 6 lakhs (US $ 14,000 to 15,000 at the present exchange rates). It appears to have decided that students in its flagship program will fund all its activities (infrastructure, faculty salaries, research grants, research students, the works).
The CNN-IBN show's panel featured Premchand Palety, Director of Centre for Forecasting and Research, who started with the following objection.
I oppose this hike simply because it is not transparent. We don’t know why they need the money and we don’t know where they will spend it.
This points to the failure of IIM-A administration to explain the need for such a huge fee hike; as a public institution, it cannot shirk this duty -- a report or white paper would be a good place to start.
Rashmi Bansal, an IIM-A alumna, tried her best to defend her alma mater. The main question, for her, appeared to be this: why are we arguing for a subsidy for a bunch of folks who are going to earn tons of money? To which Palety offered this counter: What if the MBA graduate wishes to be an entrepreneur? What if he/she joins an NGO where the salaries are far lower? [I would add a third group of (possibly a small number of) students who join the course, but are unable to complete it (for any reason); these students wouldn't have a degree, and would have spent serious amounts of money in the process.]
There was quite a bit of discussion about affordability; the new fee structure is bad news for even middle class families -- leave alone poor ones. A partial answer to this problem, of course, is either scholarships or soft loans (most likely it's the latter). Rashmi did offer this as a defence, but it's a weak one at best. T.T. Ram Mohan, Professor of Accounting at IIM-A, shows that his institution's current plan would still leave its beneficiaries with a hefty financial burden. Also, Reality Check has some telling counter-arguments to the plan proposed by IIM-A:
... Words like “eligible”, “need-based”, “family limit”, “deserving student” - are evil, no matter how well intentioned they are. They act as barriers and only encourage groups which are confident of negotiating them. ... The whole “no deserving student left behind for economic reasons” argument holds no water. ... There is a risk of making the whole program unapproachable due to perception of cost and nervousness with the proposed aid system. “What if they reject my financial application on some flimsy grounds ? What if the loan officer does not like my looks, caste, religion, whatever ? My dad earns 7 lakhs, but is in deep debt, can I pull off the aid ? Is this “IIM” thing for rich kids, like Manipal, I do not know if I should try out ? What if by chance my aid gets rejected, I dont have a backup plan ?
RC goes on to demand a system of "guaranteed financial aid" that is "automatic for those who apply." I agree. I find the Australian scheme of funding college education very persuasive: it has a lot going for it for everyone -- the government and the students with great careers; and, it doesn't punish or burden those who end up in jobs that do not pay a lot.
Coming back to the CNN-IBN show, its anchor ended it with the following editorial statement, which is admirably blunt:
A hike is warranted in the fees for IITs and IIMs. The reasons for IIM-A’s phenomenal hike though seem unconvincing. Recovering costs and retaining talent don't tell the full story. Many questions remain unanswered. The promise to increase scholarships can't be a reason to charge more; nor can the availability of finance. IIM-A needs to communicate its reasons more transparently. The bottom line is, for a public institution to charge more simply because it can, is vulgar. The country's leading management institution needs to be clean and transparent. [Emphasis added]
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