IIM Fee cut
Published by Ravikiran Rao February 19th, 2004 in Economics, Political Theatre, EducationI haven’t seen a single sensible argument in favour of the fee cut that Joshi is forcing down the IIMs’ throats. The fee cut has no economic rationale. No one asked for it. The students of these IIMs themselves are protesting the hike, seeing it for the obvious power grab it is. Joshi himself has admitted that it is a power grab, though he uses other words to describe it. Opposing it should be a no-brainer, not worth wasting my powers of analysis over.
But wait.
I do have a unique perspective to bring to the issue. I can answer the ad hominem attack that IIM students, having come from rich backgrounds can afford to oppose the fee cut. Exactly how the argument makes sense is not clear. It is not as if the rich like to pay higher fees just because they are rich. I suppose the argument is that the rich appreciate the lower competition; i.e. the high fees deter poor students from even thinking of taking the CAT.
I haven’t met that hypothetical poor student who was scared away by the high fees, but I have met a poor student who couldn’t have afforded the fees and nonetheless got through to IIML and completed the course. He took a bank loan. For him it was a necessity where for the others it was a convenience.
That student was me.
I am afraid I will have to reveal some personal details. My dad had died when I was very young. Mom brought me up. She isn’t very educated. She has studied only up to her SSC, but she had a job as a typist at an Automobile firm. Half-way through my undergraduate course, the company closed down and it was some months before she could find a job again. The new job paid much lower than her previous one. In between jobs, she had to have an operation to have a tumour removed.
When I joined IIML in 1996, I got a bank loan very easily. I just had to take out an insurance policy. I repaid the loan without even noticing the burden.
The point of course is that Joshi is wrong about poor students being deterred by the high fees, but that is not exactly a revelation. There is another point I want to make.
Mine was not the typical background of an IIML student. Most of my classmates were from - how do I put it? - from the comfortable middle class. The real cost to a student at a post graduate course is not the fees. It is the opportunity cost - the cost of taking an additional two years off from the job market to study. It is this cost that many people cannot afford, because perhaps because dad isn’t there, or he has been laid off, or because there is a sister to be married off and they need to work for the dowry, or something. I was the exception because not many have an exceptional mother like mine.
The point is, the IIMs and post graduate courses in general have a comfortable-class-skew for reasons that have nothing to do with the high fees. (By now you’d have realised that I am operationally defining “comfortable class” as “families where 22 year old kids can take two more years off for education”.) Reducing the fees will do nothing to correct the skew. What it will do however is to subsidise the same class that can does not need subsidy. I must say it is a brilliant idea.
I’ve focused on only the opportunity cost as one of the factors that skews the student background towards the comfortable class. There are others too. One factor is that you need to be good in English. The other is that engineers have an advantage in the CAT and there is already a bias in favour of the rich. Then there is the factor that you are more likely to value higher education if your parents are already highly educated, etc.
One more reason why the fee cut is wholly unnecessary is that an aspirant can work for two years , gain valuable experience, save up some money and join.
Needless to say I completly agree with your line of argument, and this is easily extended to other services and products that are subsidised by the government, in order to drum up popular support. The discussion we were having earlier about agriculture is a case in point.
Being enrolled in just such a ’subsidised’ course, I know something of the significant loss of quality in teaching staff and students that it causes. It is a pathological (was till recently atleast) to cry about the Brain Drain and loss of good minds. The lack of a genuine spirit of scholarship in India, is in my opinion directly correlated to the state subsidisation of higher education.
Especially with alternatives such as ISB, MDI, ITM etc. emerging or existing, if the IIMs lose their brand value and quality, the vacuum will easily be filled by these new high cost private B-schools (unless they are next in MMJ’s cross hairs). Those people who do go to the IIMs will constitute a new under-class of MBAs, on par in an extreme scenario to MDs from Patna University.
My guess is IIMs will start putting opaque charges on students - like hiking library fees etc. and then students will end up paying the same amount of money, but will find it more complicated to fill the loan application form.
The consequences may be unintended, but they are always inevitable.
Perfect!
Although very very important, the autonomy of the IIM’s, to me, is still the secondary issue here. The primary issue is precisely what you say - subsidising the class that does not need subsidy. Continuing, this is something that has always been characteristic of Indian education. Graduate and post-graduate education is consistently subsidised at the cost of primary and secondary education. People from the “comfortable class” continue to get education for far less than they can afford to pay, thanks to excessive subsidies while the basic infrastructure needed for primary and secondary education is neglected. And then the government expects people from a village that has no schools to make it to a university and be able to enjoy those subsidies? And as far as the IIM’s are concerned, given that IIM graduates get pretty generous starting salaries, why not make them pay after they graduate (through student loans or some such concept) rather than reducing the fees?
makes perfect sense… there is a huge amount of self-selection, or skew as you call it even at the admission test stage…and that seems only fair given the nature of the ‘end-product’ the IIMs hope to produce…
but with me, like with most people, it is the interference that irks more than any actual proposal…. and the fact that primary eductaion has no hope in sight in India while such issues are dug up and discussed ad nauseum….
what is MMJ’s trip ? to prove a point, see I can do what I want….
Contrary to popular belief I don’t think Higher Education gets anything by way of lavish subsisdy. It gets a portion of the government budget which is true, but it does not get anything near what it requires to create a top-class scholarly environment.
From the GoIs point of view it is far easier, I think, to track the use of funds going to Higher Education than to Primary Education. Universities and Colleges are registered and they are all dependent on government aid, and thus the flow of funds can be examined. But for Primary Schools, the geographical spread and linguistic diversity makes it first very difficult to track performance, and then to actually ensure that funds are flowing to the right places (this especially since many schools are directly run by the government). I think is the rationale behind the original ‘trickle-down’ theory of education.
This is not to say however that the standards set for the tracking of HigherEd are very high, because in typical buereaucratic fashion these are a posteriori standards. Autonomous Instituitions like the IIMS and IITs set there own standards and are so way ahead of the rest that they can’t even be compared on a single scale. IMHO
Read Shekhar Gupta’s article
Wireless Wimps
Interesting counterpoints, by an IIM Insider:
‘IIM don breaks ranks, backs Joshi’ at the Economic Times.
[Gautam forgot to add the URl. I’ve googled it and added it - Ravi]