Thread by @maheshperi

Thread: So, my post on IIMs and their high fees ruffled a few feathers. It is a good debate to engage in about affordability of education and role of public institutions. I felt I needed to explain my PoV. So, here goes:

1. In India, of the top 10 most expensive MBA courses in the country, six are from IIMs, which are public institutions. The DoMS (part of IITs) that offer MBA charge less than half of IIMs. And the top Private B-Schools charge less than IIMs.

2. NLSU, Bangalore the best Law University in charges 3.23 Lacs p.a including hostel and mess while the two best Private law institutions - Jindal Global charges Rs.8.92 lacs p.a and Symbiosis charges about Rs.6.2 lacs.

3. IITs charge about 2.2 lacs p.a including hostel+Mess charges. On the other hand, the best private university charges close to 9 lacs p.a and even BITS will charge you about 6 lacs (all inclusive) p.a.

4. AIIMS tuition fees for a 5 year MBBS would be a paltry Rs.33K while private players would charge Rs.1 crore +. Other INIs like NID, NIFT, CBSE, IISER etc. charge a fraction of what private institutions charge and are most sought after. In the case of IIMs, it is the opposite!

5.The high fees & huge surplus is not confined to IIM(A). In FY 22 , IIM(Bnglr) generated a surplus of 82 Cr. on tuition fees collections of 102 Cr. They also have investments of close to Rs.900 crores in various fixed income securities.

6. IIM Lucknow isn't far behind with a surplus generation of 72 Crores on tution fees collection of 102 crores.

7. If similar management boards as IIMs were running other domains, IITs would be charging 50 lacs, MBBS will cost 1 crore and NLUs charging 50 lacs. Thankfully, management 'professionals' don't run these boards.

8. The EMIs are not as easy to repay. The bottom half of tier 1 IIMs have a 15 Lac package and take home less than 90K per month. The bottom half for new IIMs is about 12 lacs and take home of 75K. The EMI would be about 35K on a 10-year tenure (SBI rate of 10.9%).

9. A high-cost EMI comes at the cost of social impact and enterprise. Students will not work for an NGO or be an entrepreneur. India with $100 billion of inward remittances and Indians heading MNCs should stop penalising thru high fees to stop the drain.

10. The argument of choosing IIM autonomy for better academic outcomes is a bluff. I find those who passed out of IIMs before 2007 to be more wise, grounded and smarter as they had greater diversity. And the quality of IITians or NLU grads hasn't fallen with lesser autonomy.

11. In my view, a group of people who didn't want to deal with red tape and questions from bureaucracy traded the fees students will pay to secure their own fiefdom. The fees multiplied 3X overnight. It is an act of arrogance, lack of empathy and conflict written all over it.

12. With the tradeoff, they ensured that other MBA schools followed suit. Now, even UG programs are following the demand led strategy and a few even charge more to increase the perceived aspiration linked to high fees.

Public institutions must ideally control 40% of the supply-provide quality education at best price and challenge private players on price & quality. However, IIMs led in making education unaffordable and the challenge of attaining demographic dividend difficult!
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