Fee-hike Review: MBA price tag gets more expensive

In the last few weeks, all six Indian Institute of Management (IIMs) have decided to raise the fees for their Post Graduate Programme (PGP), albeit with varying degrees. Other B-schools of repute too are increasing their fees. MBAUniverse.com presents a review of the new fees scenario.  

From the table below, one can make out that IIM-A’s PGP programme is the most expensive amongst the IIMs, while IIM-L is the most affordable of the IIMs. IIM-A has affected the steeped fee hike of over 100%, while IIM-L has increase the fee by a modest 25%. Other IIMs have increased fees by 50% to 80%.

Top B-school hike MBA fees:

The fee at IIM-A has been increased most substantially -- from Rs 5.5 lakhs for 2 years to now Rs 11.5 lakhs. That’s a steep 109 % jump!

On the issue of fee hike, Dr Vijaypat Singhania, Chairman, IIM-A said, "The Board of IIM-A reviewed the cost structure of the two year post graduate programme (PGP). The Board unanimously decided to charge a fee of Rs 5.50 lakhs for the first year of the PGP and a fee of Rs 6 lakhs for the second year of the PGP programme for the batch joining in the June 2008." However, IIM-A has announced massive financial assistance for the underprivileged students.

IIM-B has raised its PGP fees by Rs 1.5 lakh. The revised fee for PGP of the first year will be Rs 4 lakh and Rs 5 lakhs for the second year. That’s a 80% jump in two year fees. Giving the reason behind the increase in fee, IIM-B told MBAUnivese.com, "The fees has increased to bridge the gap between what the institute incurs as cost and what it earns by way of the fee."

At IIM-C, first-year students will have to shell out Rs 1 lakh more from this session, with the annual fee being increased to Rs 3 lakh from Rs 2 lakh for academic year 2008. IIM-C is yet to decided on fee for academic year starting 2009. Prof Ashish K Bhattacharyya, Chairman- Admissions, told MBAUnivese.com, “We have increased the PGP fee to Rs 3 lakhs for year 2008. The PGP fee for the year 2009 will be decided post the recommendations of the IIM Review Committee, set up by the Government of India.”

IIM-C chief administrative officer Dinesh Verma also told MBAUnivese.com that "The cost of teaching and hostel facilities, together with other privileges for students, amount to a staggering Rs 3.5 lakh every year. The fee increase will help us meet growing expenditures, while providing students better opportunities and improved facilities."

IIM-I has decided to raise the PGP fees by Rs 1.20 lakhs, where the first year’s fees will be Rs 3 lakhs and Rs 3.1 lakhs will be the fees for the second year. Dr S P Parashar, former director of IIM-I said that IIM-I is also increasing the fee since other IIMs have increased their fees too. The fee for PGP 2007 batch at IIM-I is Rs 1.90 per year. The new fee hike means a massive 71 % increase.  

IIM-L has decided to make a more modest fee hike by Rs 50,000 for the new entrants. The PGP fee at IIM-L has increased to Rs 2.50 lakhs per year from Rs 2 lakhs per year. "We have decided to increase the fee during our board meeting held recently. Owing to expansion of infrastructure and other facilities, there will be more expenditure. Considering the same, IIM Lucknow has increased the PGP fee," added IIM-L.   

Following the trend set by IIIMs, several other B-schools like Delhi based Indian Institute of Foreign Trade (IIFT), Gurgaon based Management Development Institute (MDI) too have increased their fees.

IIFT has marginally increased the fee for its MBA (IB) 2008 by Rs 75,000. The fee has increased to Rs. 2.5 lakhs per annum from Rs 1.75 lakhs per annum. 

Sharing the reason behind this fee increase, Dr L D Mago, Sr Administrative Officer, IIFT said, "There is a year-to-year reduction in the non-plan grant to IIFT by the Department of Commerce, Government of India. Further, the expenditure on infrastructure items including Library and IT facilities as also the salaries of the faculty and other staff members are increasing every year. Keeping these factors in mind the Institute has enhanced the fee."  

MDI has raised it’s two year management programme fee to Rs 7.83 Lakhs from Rs 5.89 lakhs. Dr S K Basu, Director, Gurgaon based Management Developmetn Institute told, "As of now, the new entrants will have to spend a gross of Rs 7.83 Lakhs, include tuition fees of Rs 5.50 lakhs plus Rs 2.33 lakhs towards board and lodging for the entire duration of the PGPM course."

"The corresponding figures for the batch which joined the PGPM at MDI in 2007 were Rs 5.89 include Rs 4.05 for tution fees and Rs 1.84 lakhs for board and lodging," added Dr Basu.

Apart from the IIMs, MDI and IIFT, many other B-schools that MBAUniverse.com spoke with are waiting and watching the sentiments before making their announcements.

MBAUniverse.com will continue to track the fee hikes, and its implications, from across the campuses. Stay tuned.