CAT 2018 Exam saw a remarkable boom in the number of applicants this year with 2.41 lakh fresh registrations and 10, 000 candidates re-appearing. The exam was a whirlwind as usual and is followed by other equally important management entrance exams such as IIFT 2018, SNAP 2018 and XAT 2019 and so on and so forth. Needless to say, an MBA Degree is the current hot cake in the market and opens a glorious gateway to corporate careers. The bigger and reputed the B-School, the better the placements and higher the packages.
But, as you all already know, there are no free lunches in life and everything indeed comes with a price. MBA degrees are expensive, be it India or abroad. Recently, IIM Ahmedabad was equated with other money-minting coaching institutes despite it being the most reputed management institute of the country and known for churning out future CEOs and bureaucrats, yet it had fingers pointing towards it. The reason: hefty fees for its various management programmes.
Let us have a look at the Fee Structure of some of the IIM and Non-IIM institutes, to give you an understanding of the amount of expenditure you would incur while going for an MBA in general, from either IIM or Non-IIM Institutes.
Fee Structure of IIM and Non-IIM Institutes
|Name of the College||Fee Structure|
|MDI Gurgaon: Management Development Institute||
|IMI Delhi: International Management Institute||
|Faculty of Management Studies, New Delhi||
|IIFT New Delhi||15.7 lakhs|
|Great Lakes, Chennai||16.45 lakhs|
|IIT Delhi||8 lakhs|
|IIM Ahmedabad||21 lakhs|
|IIM Lucknow||16 lakhs|
|IIM Bangalore||19.50 lakhs|
|IIM Kozhikode||16 lakhs|
|IIM Calcutta||11.25 lakhs|
|JBIMS, Mumbai||6 lakhs|
The aforementioned data is a clear evidence about the management degrees being quite expensive compared to other degree or diploma courses.
We, thus, come to the million-dollar question: Why is MBA so expensive?
An MBA degree is extremely sought after and demands a huge investment on the student’s part. Therefore, it is important to calculate how much money you can recover and how fast. There are over 3000 Business Schools in India offering an MBA degree, but one needs to meet certain parameters while choosing the course. The overall Return on Investment, Scope of the MBA degree, Opportunities, Cost, Tuition Fees, Preparation Cost, Tuition Fees, Badge, Value, Alumni Network, Choice of Career etc to understand how far the degree is worth. Taking a heavy Education Loan and not getting its’ worth can be extremely detrimental to personal finances as well as effect both personal life and career in the long term.
It is still cheaper to pursue an MBA degree from India in contrast to an MBA abroad, nonetheless, the fee is considerably high even for Indian standards and in general cannot be met without drawing an Education Loan. Mentioned below are some reasons which make an MBA heavy on your pocket:
- Tuition Fee and the Cost of Living
This is the sphere where all the money goes down the drain! A two-year residential PGP programme at a premier institute in India will cost one approximately Rs 12-15 lakhs. MBA degree which require a GMAT exam for enrolment require both higher fees and experienced professionals. Therefore, an MBA degree in India requires shelling out 20-25 lakhs and 70 lakhs fees for an MBA degree abroad. Education loan is made available from various Indian banks against collateral security and/or co-signors at 10.5 to 12% floating rate of interest.
- The Opportunity Cost
An MBA is all about adding to your existing qualification and to drastically change one’s career for the better. Therefore, while deciding on an MBA course one should consider the Opportunity Cost as well. Opportunity Cost includes foregone salary, professional experience and perhaps a promotion.
- Preparation Costs
There are several players in the education industry who focus solely on MBA. An average cost of classroom coaching for written exam is around Rs 25000. Add another Rs 25000 for Interview Preparations and Essay Writing, especially for GMAT aspirants.
- Cost of Application
CAT Application Fee is around Rs 1600, where you are eligible to apply to programmes from IIMs as well. If you want to apply for other management institutes accepting CAT, you must pay for their application forms separately which costs approximately Rs 1500-Rs 2000. The costs for GMAT are higher. The cost of taking GMAT once is US$250 and the cost of sending additional score report for every B-School is US $28. Besides, one needs to buy application forms of each Business School, which costs about US $200 for each school.
Factors Affecting an MBA Degree
A student can either opt for a full-time or a part time MBA programme, depending upon his/her requirement. They will both result in an MBA, yet there are tradeoffs to consider. A student pursuing a full-time degree won’t be able to work at the side, whereas an Executive MBA is for students who are typically 32-42 years of age who have accumulated some work experience over time and want to both work and study at the same time, without having to live on campus.
Other factors that come into play while pursuing an MBA degree is Grades. Without scoring an overall good percentile, one cannot secure an admission into the top B-schools. Academic excellence provides a solid foundation to the work that you do, is something no one can snatch away from you and reflects in your work life as well, yet, B-Schools are inclined towards real-world professional outcomes and relationships. Naturally, many of them value relevant work experience before taking the final call on a candidate.
When is the MBA Degree Really Worth It?
An MBA is only worth the expense, time and effort when the student plans to work long-term in a corporate career, business-related fields, company founder, etc. Students working in other industries, unless they are in management or leadership roles, may not find an MBA of much use.
Besides, it is not only about getting the degree, but about getting it from an institution of high repute so you can bag good placement offers and use the brand value of the institution in your favour for life. Recruiters and Hiring managers are not likely to view an MBA earned from an unknown or online-only educator in a good light. For working professionals forgoing a few years of work to go back to gain an MBA degree and doing so from an average college would be waste of time, money and opportunity.
An MBA programme from a top B-school provides a rather smooth sail into becoming future leaders, nonetheless, it should not be confused with achieving leadership positions without the desired skills and a poor personality and emotional quotient. Thinking out of the box, sincerity, perseverance and laboriousness are golden qualities that can make an employee rise in life, regardless of an MBA or any other degree.
An MBA degree adds to your resume and gets you that interview call, yet converting the interview resides solely on the candidate.
Summing up, the cost of doing an MBA has a significant impact on individuals and their families as well. It is indeed a lucrative degree and would open many doors for students who dream of thriving in corporate careers, nonetheless, it does come with its’ drawbacks and one needs to evaluate both their long and short-term goals. The bottom-line is that the benefits of doing an MBA considerably outweigh financial costs associated with it. Despite the cost-benefit aspects, a great majority of business school alumni self-report very positive experiences and high value from their MBA degrees.