Trend will Continue
Between 2007 and 2016, inflation as measured by the Consumer Price Index (CPI) for industrial workers (IW) rose at a compounded annual growth rate (CAGR) of 8.6%. During the period, fees at the top management institutes in the country rose by 12-19%.
Experts, however, reckon that this trend of fee increases will continue. “Management education, globally, is an expensive proposition. Institutes have to invest a lot of money in case studies, faculty salaries, including visiting professors, international collaborations where students and teachers are exposed to other markets, among other things,” says Rohin Kapoor, director at Deloitte in India. Earlier, this was largely subsidised, he said.
“Now, increasingly, the thinking is that students who pass out from these top institutes get good/above average salaries and should not find it difficult to repay their loans. Also, for people from economically challenged backgrounds, there are fee waivers,” Kapoor said. Graduates of top Indian management schools get average starting annual pay of .₹ 13-18 lakh during placements.
For institutes operating in developed markets, tuition fees for management programmes have already reached a certain level, with increases limited to 3-4%, usually in line with cost inflation. “Going forward, even fees at Indian institutes will stabilise,” Kapoor said.
Globally, there are at least four Bschools that charge above $200,000 as the total cost of a full-time MBA programme.