Along with IIM Ahmedabad, several other top Indian b-schools hiked their fee substantially this year. How are students in top Indian business schools financing their education now and how have student loans adapted to the new fee structures? Let us explore seven Indian b-schools that increased their fee by 30 percent or more.
Indian Institute of Management, Ahmedabad (IIM A)
Fee amount: Rs 11 lakh
Prof Ajay Pandey, the PGP Chairman explains, “There is a system of income linked fee waiver in place here. Students whose family incomes are less than Rs 6 lakh per year are eligible for this scheme. Those with annual income of less than Rs 1 lakh are granted full fee waiver and others are given graded assistance. This is a mechanical process in the sense that students eligible for this system are automatically given financial aid according to income levels. As of now about 60-70 percent of the students at IIM Ahmedabad have benefited from this scheme. We also have a system of need based scholarships in place in which after considering income linked waiver and education loans, further need for financial assistance is determined and aid is provided. Unlike income linked waiver, aid under this scheme is discretionary in nature,” explains. Banks also have favourable policies as regards loans related to IIM Ahmedabad. Some offer loans without requiring collateral or a co-signor.
Fee: Rs 8 lakh
Prof RV Murthy, Chairperson, Financial Aid explains, “Students with a family income less than Rs 3 lakh per annum can apply for financial aid. Those with a family income exceeding this amount may also apply. In either case, there is an interview in which the need for financial aid is gauged. Depending on that, a fee waiver of one to three terms is given. Banks have also decided to tie up with our institute and have raised the collateral-free loan amount from Rs 4 lakh to Rs 10 lakh”. On being asked whether the total aid provided would also increase with the increase in fees, she says “Last year we provided about a crore in financial aid and we’ll probably be exceeding that amount in the coming year”.
The school did not wish to comment on this issue. The web site claims that all admitted students with income less than Rs 2 lakh would be eligible for financial assistance.
Fee: Rs 6 lakh
“Students with annual income of less than Rs 2 lakh are eligible for need based scholarships. Depending on the annual income, fee waivers of certain amounts are given. A student loan committee helps to decide which bank (amongst the ones that the institute has tied up with) is offering the best agreement. This year, the offer was to take a loan of up to Rs 10 lakh with no co-signor or margin requirements at a fixed rate of ten and half percent or at a floating rate of two percent below the Prime Lending Rate (PLR). More than 90 percent of the batch here has taken an education loan”, comments a first year student.
Management Development Institute (MDI), Gurgaon
Fee: Rs 7.92 lakh
Dr BA Metri, Dean (Academic programmes) says, “There are no issues as far as loans are considered. Banks are coming forward to help students. In the case of a school with a good brand name the pay back period for loans is not very long. Apart from this, meritorious students can also apply for scholarships such as the OP Jindal Engineering and Management (OPJEM) scholarship and the Bharti Foundation Scholarship. Every year around two students at MDI are awarded these scholarships”.
Mudra Institute of Communications, Ahmedabad (MICA)
Fee: Rs 9 lakh
“MICA has a tie-up with SBI and compared to the current market rates we get to take loans at very reasonable rates. The interest rate is about 10.5 percent and this offer is very good considering the market rate of thirteen percent. Further, proof of collateral or a co-signor is not required. The college has an understanding with the bank and therefore conditions have been relaxed for us. To the best of my knowledge, out of a batch of 120, 70-80 students have taken a loan under this scheme for the course fees which is Rs 9 lakh for the two year programme,” explains Mihir Shah, a first year student at MICA.
TA Pai Management Institute, Manipal
Fee: Rs 6 lakh
“TAPMI has tied up with HDFC so that a loan amount Rs 750,000 can be taken without providing any collateral. This amount would cover the entire fees for the MBA course at TAPMI. One parent is required to be the co-borrower. Earlier 30-35 percent of students at TAPMI would take education loans. Now that number has grown to 60 percent of the student body here,” comments Dr V Rao, Director In Charge at TAPMI.