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Old 1st March 2012, 12:06   #16
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Default Re: IIM's hike the fees, How will common man afford this

Enough said already about how IIMs and other schools of higher learning shouldn't have a subsidised system of fee structure. These schools have to pay well to their faculties to keep the standard high. Expect the fees to go higher if Professors get involved in some real research activities as well. So as long as getting an admission into IIM can get you a loan, these hikes shouldn't be cried about at all.
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Old 1st March 2012, 12:24   #17
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Default Re: IIM's hike the fees, How will common man afford this

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Originally Posted by mayankjha1806 View Post
Bumping this thread again, on my query of Educational loans.

Spoke to HDFC Credila guys and they fund upto 20L for higher education at 12.5% Simple Interest, now i was curious as to why SI when everyone is giving it on Compounded? Which is better anyone has any idea?

The repayment plan looks flexible as they say the EMI can start post course completion + six months.
i had taken an educational loan many many years ago and i think following still holds true for most offers:

on almost all the policies, the repayment plan is post course completion + six months; and if you start paying interest (only) during your education, you get a discount of 1% on interest rate.

does the loan of above 10L (it was 6L back in 2002) require a co-signer or a collateral?

and yes, you get tax benefit on the interest amount you pay when your EMI starts.

Last edited by infotech58 : 1st March 2012 at 12:26.
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Old 1st March 2012, 13:01   #18
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Default Re: IIM's hike the fees, How will common man afford this

The IIT's and IIM's are already heavily subsidized by the Government of India.

Most people who graduate out of these Institutions take up some super fancy International or high paying local jobs in the Private Sector.

The original intent of these institutions was to build and nurture talent for the overall good of the country where it was envisaged that the students graduating from here would give back to their country in some way and help build it to the next level. For various reasons such "give back" is more of an exception than the rule as we all know.

I dont think it is wrong that they have raised the fees - why should anyone be allowed to take the benefit of a subsidized cost, yet first class education and then buzz off to some multi national in India or abroad and earn zillions for themselves alone without giving back in some way? I would say let those who wish to enjoy the benefits of such an education pay the fair price for it - even if it means taking a loan or whatever, against their future prospects! This is an absolutely fair practice and is the norm everywhere else in the world except possibly here!

The institutions should certainly be paid a fair rate for the first class education that they provide!

This is only my considered view and personal opinion and everyone else is welcome to his/her own views on the subject.

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Old 1st March 2012, 13:03   #19
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Smile Re: IIM's hike the fees, How will common man afford this

Quote:
Originally Posted by mayankjha1806 View Post
Spoke to HDFC Credila guys and they fund upto 20L for higher education at 12.5% Simple Interest, now i was curious as to why SI when everyone is giving it on Compounded? Which is better anyone has any idea?

The repayment plan looks flexible as they say the EMI can start post course completion + six months.
I read in the papers about SBI reducing the edu loans by a percentage. I guess with the Interest rates to begin their southward journey in the coming days surely the edu loans would look attractive then.
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Old 1st March 2012, 13:51   #20
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Default Re: IIM's hike the fees, How will common man afford this

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Originally Posted by infotech58 View Post
does the loan of above 10L (it was 6L back in 2002) require a co-signer or a collateral? and yes, you get tax benefit on the interest amount you pay when your EMI starts.
Yes it needs a co-borrower, or a collateral. The tax benefit is interesting, how much is it allowed? Is it for all courses, meaning executive courses inclusive?

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I read in the papers about SBI reducing the edu loans by a percentage.
Thanks for pointing that out, will check it out with them.
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Old 2nd March 2012, 16:23   #21
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Default Re: IIM's hike the fees, How will common man afford this

Nothing wrong with raising the fees. The fees are still lower compared to some of the private bschools.

When I passed out, we had to pay 1.5L over two years. I took a 1.2L loan from HDFC at an interest rate of 16.5% (those were the days of high interest rates). Even during our times, not a single person- who got admission - had issues with funding. If you get in, IIMs will ensure that you secure funding somehow - e.g. through loans or scholarships. I am talking about PGDM though - no idea about Exec courses.

Nowadays interest rates are lower, financial institutions are competing with each other aggressively to provide loans and the starting pay packages have increased significantly. Fees and funding should be the least of worries.
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Old 3rd March 2012, 10:58   #22
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Default Re: IIM's hike the fees, How will common man afford this

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N
When I passed out, we had to pay 1.5L over two years. I took a 1.2L loan from HDFC at an interest rate of 16.5%
Was it simple interest or compounded, HDFC is offering at 12.5% Simple, and i am wondering how expensive/cheap that is going to be as compared to other loans that i have? Agree funding isn't a problem at IIM's, so its kindof alright if one has to shell out huge amount as fees. The way i see it the ROI is going to be significantly higher as well.

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Old 14th March 2012, 05:45   #23
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Default Re: IIM's hike the fees, How will common man afford this

Alright, did some comparisons and calculations. This is from CREDILA (Which is by HDFC). The educational loans are more expensive then all other loans like Car/Home etc. When compared they almost equal the Personal Loan rates.

My advise if one can fund self, its better to stay away from these educational loans.

PS: I did not account for tax benefits in my calculations for now.
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Old 14th March 2012, 15:19   #24
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Default Re: IIM's hike the fees, How will common man afford this

I have a rule of thumb for RoI with respect to fees.

"Does the fee of an institution equal the average annual salary (CTC) for campus recruitment?"

As an example, my cost of education in BITS for 4 years of engineering was roughly INR 2,50,000 (batch of 1999-2003). Campus placements during 2003 (despite the fall of twin towers, courtesy 9/11) still offered an average salary of INR 2,50,000. Even today, this equation holds in BITS Pilani. Obviously the fees have gone up but so have the salaries.

Which B-school justifies high fees? My sister graduated from ISB 2 years ago and paid INR 20,00,000. The average package of ISB campus recruitment came no where close to that. I don't see why an MBA institution should charge such high fees. It is a misconception to believe that everyone out of a premier B-school (say, IIM) gets high paying jobs. A very small percentage do. Most IIM grads end up working at 5-6 lac annual salaries.

Since when did it become acceptable for education to become the preserve of the rich few? Why is it fine for a school to charge insane fees? A B-school is expected to find other means of generating funding - consulting projects for corporates, etc. After all, if the teachers are so brilliant that they demand such high packages, they should be able to put some of that brilliance to fund generation. Fees should never be the primary source of funding. A B-school's asset are its students. Not the money they generate out of them.

Not sure if IIMs still get subsidy from the government or not. But even if they don't, 15 lac fee is not justified. I can talk of my alma mater. BITS Pilani gets zero funding from the government. Yet its fees are on par with IITs. BITS uses its extremely talented pool of students to execute projects for industry. They make money out of that, keep the fees within reach of most people, attract brilliant students, and execute even more projects for industry.

One assumes that people who teach business would be able to come up with better ideas than raising fees every time they need additional funding.

Last edited by lucifer1881 : 14th March 2012 at 15:21.
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Old 14th March 2012, 15:46   #25
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Default Re: IIM's hike the fees, How will common man afford this

I also ask, is it ethical for B-Schools to ask for such high fees when they know that in 90% cases it is the parents who will foot the bill? Students taking education loan is as it is a sad affair, but more so because even here it is the parent's ability to repay that loan (in case student doesnt get a job) that comes into focus.

How many parents would like to burden their girl child with an education loan - that too for education in India?
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Old 21st December 2012, 13:02   #26
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Default Re: IIM's hike the fees, How will common man afford this

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I also ask, is it ethical for B-Schools to ask for such high fees when they know that in 90% cases it is the parents who will foot the bill? Students taking education loan is as it is a sad affair, but more so because even here it is the parent's ability to repay that loan (in case student doesnt get a job) that comes into focus.

How many parents would like to burden their girl child with an education loan - that too for education in India?
It ABSOLUTELY Ethical and justified

See the number of seats versus number of aspirants, isn't building more colleges is where government should focus its spending!
Education loans are given without collateral and let me tell you, you'll shocked to know how many defaulters exist at IIMs
Majority of people passing out of IIMs etc work for money and not for nation building. Most don't give a damn for the country. Why should government fund them!

Students should take loans or their parents should pay, because they make that money from jobs and I don't think they give the government back anything extra.
IIMs and IITs were funded in the past. Have rich IIT and IIM Alums from that era gave money back to government with a note of thanks!

Girl child: Bhai, this is the double standard we have in the society regarding girls, when it suits we make her equal to men and when we need a favour, we becomes bechari abla naari. Education is same, fees should be same.

India needs government support in primary education. Subsidy and grants are limited, it should go there.

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Old 22nd December 2012, 01:06   #27
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Default Re: IIM's hike the fees, How will common man afford this

Came across this while looking to do a 1 year MBA from IIMB.

https://www.sbi.co.in/user.htm?actio...0,1,20,419,682

You get up to 20 lakh loan with no collateral at 10% interest and loan payback time of 7 years. From the placement stats of IIMA/B/C the median yearly salary is around 12 lakhs for 2 year program and around 22-26 lakhs for the 1 year program.

The program fee generally matches with 1-2 years of pay which i think is fair and better ROI than what you find in most of the US/UK b-schools.
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Old 22nd December 2012, 07:11   #28
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Originally Posted by lucifer1881 View Post
I have a rule of thumb for RoI with respect to fees.

"Does the fee of an institution equal the average annual salary (CTC) for campus recruitment?"

As an example, my cost of education in BITS for 4 years of engineering was roughly INR 2,50,000 (batch of 1999-2003). Campus placements during 2003 (despite the fall of twin towers, courtesy 9/11) still offered an average salary of INR 2,50,000. Even today, this equation holds in BITS Pilani. Obviously the fees have gone up but so have the salaries.

Which B-school justifies high fees? My sister graduated from ISB 2 years ago and paid INR 20,00,000. The average package of ISB campus recruitment came no where close to that.
Have to disagree with this perspective. The GOI certainly should not be subsidising post graduate fees anywhere - students should pay. If you are good enough to get into an IIM, you are good enough to get a job - if you cant afford the fees, work for a few years, don't buy a car, save and then go to an IIM. You will also be better off for entering with work experience (unlike people like yours truly who entered while wet behind the ears).

With regard to ISB, I agree that everybody does not get a good job - but that is because the batch size is large, and the quality of students is very mixed. Some of the very best recruits at our bank have come from ISB, but we don't go there for recruitment as the average student is by far inferior to those from the older IIMs (A, B and C) - we usually get the best from ISB applying off campus (or at least used to until hiring freezes crept in over the last 2 years).

ISB does not get any government subsidies, it pays a lot for US based visiting faculty, and is very good value for money compared to a second rung US MBA (which is the alternative for most students who get in there). It is also very good value for people with more than 3-4 years of experience - please note that for someone who earns c Rs. 10 lakhs a year pre MBA, a one year course at ISB costs just Rs. 30 lakhs, while a 2 year course at an IIM would cost Rs. 20 lakhs + even before considering the fees.

As for your rule of thumb, you are asking for a one year payback period - I don't know too many investments like that. In my days at IIM, fees were negligible (Rs. 20 - 30 k a year), total cost of attending college was the salary you gave up (Rs. 1 lakh odd p.a.) but average salaries were under Rs. 2 lakhs, and several people came out after 2 years with starting pay at the same level as or in some cases even lower than what they would have been earning if they stayed on in the jobs they left before joining IIM. Are almost all of them much, much better off today (over 15 years later) for having done their IIM MBAs? Given the number of BMWs and Mercs amongst people who started their lives hoping to own a Yamaha RX 100, I have to say yes.

Yes, an MBA is an expensive investment. Think about what you hope to gain over the course of your career from it. If you want to make a switch from Engineering to Finance or Marketing, it is the best option for you. But if you love what you are doing (especially in a technical job), don't go in for an MBA expecting a one year pay back.

Last edited by Hayek : 22nd December 2012 at 07:19.
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Old 22nd December 2012, 09:11   #29
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Default Re: IIM's hike the fees, How will common man afford this

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...How is this affordable to a common man and esp parents who would be dreaming to have their children getting admission to these prestigious institutes...

BHPians any thoughts on the same.
Dear Mr. Ghodlur, while we may all have aspirations of joining/ having our future progeny join an IIM, if you have a close look at the profiles of the batches of teh last few years, you will see an interesting trend. There are now more kids in an IIM like B who are progency of current industry leaders/ people in 'high' places. How or why is difficult to say, as quite a few of them have good scores in their prior academics. Their actual worth may only be understood by what they end up doing after a few years.

So, the kids who will end up getting admission to an IIM need not worry about this hike in fees, its just an equivalent of a shopping spree/ annual vacation spend for them.
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