Business schools are expensive. The cost of the most coveted two-year Post Graduate Programme (PGP) course at the Indian Institute of Management, Ahmedabad, currently stands at Rs 22 lakh ($31,900). IIM Bangalore and IIM Calcutta cost marginally less. And the course fees at IIMs also go up almost every year in line with inflation. Compared with private institutions, though, this is positively cheap. Course fees for Indian School of Business’ (ISB) one-year PGP offering, for example, costs over 1.5X the fees of IIMA.
But even as these fees continue their stratospheric rise, there is no dearth of applicants. In 2018, the Common Admission Test (CAT)—the premier pan-India entrance exam conducted by IIMs—saw 241,000 registrations. All vying for around 4,300 seats.
Why this craze? Because branding matters. An MBA degree is an ace. An MBA degree from the top B-schools is the ace of spades. And if you have IIT+IIM in your CV, the world is your oyster. Not only does it virtually guarantee you a job, but it also assures you a fat salary to boot. And social capital, of course.
So in February, as the final few students from these hallowed institutions received their final placement offers, three types of headlines appeared in most news dailies:
- 100% placement at <INSERT NAME>
- Average salary rises by XY%
- XY candidate scores highest package of XX lakh per annum
That’s the draw.
Add to that the ungodly amounts of societal pressure to go down this path and you get a perennial conveyor belt of desperate candidates.
Cheaper education loans complete this unholy trinity. If you have a selection letter from one of the IIMs, ISB or one of the other top B-schools, chances are that you could get an education loan without even putting up collateral. It’s a safe bet for banks, given the stellar placement record at these institutes and the salaries that these graduates make.
That’s the clincher.
As a student though, once you have taken a loan, you’re now part of a vicious cycle. You want the best jobs at the best companies. Nothing else matters. As such, it’s no longer about the courses that interest you but the ones that allow for the highest grades. After all, you have loan repayments hanging over you like a sword of Damocles. Every single student in a batch—by extension, every management student—wants the same thing, making it a zero-sum game.
Companies know this situation well and exploit it to the fullest during placements.