IIM-A board chairman Vijaypat Singhania ruled out a review, but added that enough scholarships would be available to support meritorious but poor students. Against Rs 40 lakh earmarked for scholarship, the amount now would be Rs 8.5 crore, covering 62% of students.
IIM-A's board had increased the fee of its coveted two-year PG programme from a total of Rs 4.50 lakh (for both years) to Rs 11.50 lakh (Rs 5.50 lakh in the first year and Rs 6 lakh in the second year) from June this year.
First of all some Mathematics (which I hate but still):
calculating from 8.5cr gives 62.5% scholarship and having a general idea give that IIM-A has around 120 students (dont kill me if 62.5% not getting full scholarship; cause my calculations are based on that)
So before hike:
Total revenue: 120*4.5lakh=540 lakhs
Scholarships: 40 lakhs
So net profit was: 500 lakhs or 5 cr
New Revenue:
Total Revenue: 120*11.5lakhs= 1380 lakhs
Scholarships: 8.5 cr
So net Profit: 530 lakhs= 5.3 cr!!!!!!!!!
Now next statement
"The hike was necessary because freeships are now weakening the institute by putting a burden on its corpus fund," Singhania told reporters after the meeting which lasted over an hour.
The whole institute was being weakened by lack of 30 lakhs!!!! Am sure government could have easily supported that...or hey there was a easier way of just increasing fees of 120 students by .25 lakh each. I would have been much easier and much more appreciated. Or in worst case could have easily asked the alumni that much amount..30 lakhs is sponsorship money for many fest that take place in IIT's and IIM's.
Now I know that the above calculation is not exactly correct. I mean not all 62.5% students get full scholarship (thats another question why not) and there may be some internal costs or technicalities that are not told (thats another question).
But what I am trying to say is that instead of increasing scholarship amount from 40 lakhs to 8.5 cr they could have given some breather on the fees.
Some more quotes of the wiseman:
"Students will be able to repay the loan before leaving the institute because employers are ready to meet the cost of their education. Most of the employers are repaying the loan taken by the students," he added.
"What is important is that there should be loans. Any student who can get into IIMs should be able to finance his education through a loan," Ahluwalia said. The IIMA's 186th board meeting resolved that "no deserving student would be deprived of an opportunity to study at IIM-A on account of lack of financial resources".
Now point is loans are alright upto a limit. Even for the previous fee structure of 4.5 lakhs many would be taking loan only.
But 11.5 lakhs is too much risk. Even I would be thinking a hundred times before taking such a loan.
And the next question.. how many of us would somehow arrange 11.5 lakhs just hoping that later we would get a scholarship or company would repay back. How many of us can take that risk. I am in college and I know that it doesn't take long for fortunes to change tide. Even a good student may get disillusioned from studies or some other problem may arise. I know its students fault and not Institutes problem but with 11.5 lakhs at stake it becomes a big problem.
And another thing. How many banks would finance for a poor student whose family is landless labor? Have no guarantee. So should his fate be decided by banks?
