IIMs are weighing rise in fees against increase in scholarships

While the Indian Institutes of Management (IIMs) have long been increasing the tuition fees of the two-year post graduate programmes (PGPs), they have in the process attempted to reduce the burden for meritorious students by increasing the disbursal of need-based scholarships.

Consider this. About 70 of 700 students availed themselves of the need-based scholarship programme of IIM Calcutta (IIM-C) for the 2009-10 batch, says Prashant Mishra, chairman, PGP, IIM-C. "We plan to increase the number of scholarships paid out if needed," adds Mishra.

As compared to income-based fee-waivers in terms of tuition, where family income is taken into account, need-based scholarships are granted to students if the IIMs are of the opinion that a deserving student has not been successful in securing a proper quantum of loan to finance his studies.

Between 2004-05 and 2007-08, financial aid to IIM-C students was around Rs 20 lakh annually, but this grew to Rs 1.8 crore in 2009-10. "Financial aid helps such students to take up higher studies or start a business where the compensation may not be high. So they need not worry about arranging a loan," says Mishra.

IIMs also provide income-related fee waivers. For receiving the scheme at IIM-C, students should have a below Rs 4 lakh family income annually. Once again, if family income of a student is less than Rs 1 lakh annually, then a 100 per cent fee waiver can be given to a student subject to the disbursal limit of the institute and the number of students who have applied for the waiver.

IIMs provide scholarships to poor students and the value is equivalent to full waiver of the tuition fee. Even though IIMs would continue to provide fee waiver to students based on family income, the fee waiver this year would be decided based on class income distribution. For instance, in the financial year 2009-10, 41 students were provided education at IIM Ahmedabad (IIM-A) free of cost.

At IIM Lucknow, nearly Rs 70 lakh was given to students under the need-based scholarship scheme for the year 2009. "This is nearly three times larger the disbursal that we had last year," says Devi Singh, director, IIM Lucknow. "We will increase the scholarship disbursal budget if there are more students who apply for it and then cross the cut," he adds further.

Our intention is to increase disbursals so that management education becomes affordable for as many people as possible."

Students look forward to better infrastructure

The new fee structure of Indian Institutes of Management (IIM) might have priced the much sought after post graduate programme in management (PGP-M) out of reach, but Indian MBAs-to-be don't appear to be complaining. The hike in the fees would mean added facilities for students, they rationalize. They also believe that placements would make up for the hike in fees.

"The IIMs need the money to upgrade the infrastructure that would be used by the students and also to retain faculty members. Other than that, an increase would not be a problem for me as I would take a loan in any case. And if the job works out then there is no problem whatsoever," says Reema Ghosh Roy, who aspires to join an IIM.

Ankit Srivastava, also one of the CAT toppers, also concurs that the IIMs' decision is rationale. He would be receiving interview calls from IIM Ahmedabad, Calcutta, Kozhikode and Indore. "The first reason being that the IIMs offer a great platform to any person for economic as well as financial stability in the society. They have the best class of facilities as well as for building the infrastructure now.". There is also a provision for the lower income segment as a full scholarship and fee waiver of the tuition fee," says Srivastava.

"The IIMs are increasing the seat size this year which necessitates an upgrade in the infrastructure facility. I think it is fair if the IIMs raise their fee waiver scheme, which will pay the fees for the lower income group," says Kiran Kanchana, a candidate who has been shortlisted by several IIMs.