Selection, not course fees, is the main concern for students aiming to study management at premier institutions such as the IITs, which charge an average of Rs. 6.53 lakh, and IIMs, which charge an average of Rs. 15.03 lakh for a two-year course. The easy availability of loans to study at these institutions and the assurance of bumper placements tend to numb students to the basic question: is it worth the money? Maheshwar Peri, the founder and chairman of Careers360, a career guidance website, broke down the data from 20 IIMs and 9 IITs that offer management programmes at the master’s level to see if the cost of the fees justify the salary packages.
His analysis challenges the common perception that the loans taken for an MBA at an IIT or IIM are a safe investment. His findings show that students at the bottom half of the placement grid in the IIMs could take between eight to 13 years to repay their loans. Importantly, the analysis shows that the inaccessibility of the IITs and IIMs have made them exclusive clubs of the elite. Private institutions, he finds, have a greater percentage of students from marginalised backgrounds than these public funded institutions.
Maheshwar’s analysis found that the average salary in the top IIMs is Rs 20.19 lakh. The top 50% get Rs 24.41 lakh while the bottom 50% get an average salary package of Rs 15.97 lakh. Based on these deductions, Maheshwar’s analysis revealed that those in the bottom 50% would be paying off their education loans over eight years while some are expected to be in debt for at least 13 years. Giving the example of IIM at Jammu, Maheshwar said that students at the bottom 50% would be in debt for 152 months while students at IIM Rohtak in the same category would be in debt for 139 months.
1. Thread: The fees charged by IIMs are often justified for the high salaries’ students get at campus placements and availability of education loans. However, the shenanigans that are hidden behind the campus placement data needed a deep dive and Careers360 did exactly that.
— Maheshwer Peri (@maheshperi) July 12, 2023
Breaking down the data collected from nine IITs that offer management courses, Maheshwar found that the average salary is Rs 18.44 lakh. The top 50% get an average salary of Rs 22.07 lakh while the bottom 50% get Rs 13.15 lakh. Students in the bottom 50% will be repaying their education loans for more than three years, according to the analysis.
While the difference between the salary packages offered in IITs and IIMs is not too large, there is a significant gap in the fee structure. Maheshwar drew attention to how such high fee structures and paying EMIs might inhibit students from taking up jobs in the social sector or pursue entrepreneurial ventures. He also said that the number of IIT graduates who pursue entrepreneurship and are in government service are drastically higher than those from IIM owing to the subsidised fees at IITs.
Addressing the social fallout of the exorbitant fees at the IIMs, Maheshwar said that this would discourage students from economically weaker sections (EWS) to even apply to these universities, thereby weakening the “diversity that leaders should be exposed to.” He also shared data showing how the total number of students from EWS in three IIMs is 4.28% (129 out of 3010) while private institutions like Symbiosis (21.4%), and SP Jain (25.46%) has a higher percentage.
Criticising the way IIMs are functioning, Maheshwar said, “IIMs, started with a laudatory purpose, have become professional, profit making and mean machines run by academics acting like CEOs. The current lot of IIMs can only create managers and not leaders.”