Business Schools Cannot Live by Tuition Alone

By Colin Nelson

Much has been written in recent months about the affordability of higher education. Data from AACSB’s annual Business School Questionnaire (BSQ) indicate that the cost of tuition has indeed risen over the past five years, though it has not done so in a uniform fashion across geographic regions:

Figure 1. Mean Undergraduate Tuition & Fees for Local Students (Single Year) at AACSB-Accredited Schools, in USD

 
Source: AACSB International Business School Questionnaire (BSQ).

The data in Figure 1 represent the mean cost for a single year of undergraduate study across a controlled set of AACSB-accredited schools in each region that reported undergraduate tuition data in all five of the most recent BSQs. Several schools in countries (or in certain select states/provinces within those countries) that legally prohibit higher education institutions from charging undergraduate tuition to domestic (or EU) nationals were removed from this analysis.

While the average tuition at accredited schools has gone up in all regions over the past five years, the rates of rise in the Americas were much faster than those of the Asia-Pacific (i.e., Asia + Oceania) and European regions. Single-year undergraduate tuition costs rose fastest in Latin America and the Caribbean, with a 30.4 percent increase over the five-year period, while those in the Asia-Pacific region rose most slowly at only 9.9 percent. The costs at European schools also rose more slowly, at 18.5 percent, while Northern American schools showed a 23.2 percent increase.

Interestingly, increases in tuition costs at the graduate level paint a very different regional picture than at the undergraduate level:

Figure 2. Mean Full-Time MBA Tuition & Fees for Local Students (Full Program) at AACSB-Accredited Schools, in USD

Source: AACSB International Business School Questionnaire (BSQ).

Again, the data for Figure 2 come from a controlled set of AACSB-accredited schools in each region that reported full-time MBA tuition data in all five of the most recent BSQs. Please note that tuition costs reported for full-time MBA programs are given for the entire program, rather than for a single year, as at the undergraduate level.

At the MBA level, mean tuition costs for accredited schools in the Americas and the Asia-Pacific regions remain relatively close over time, as compared to the mean MBA tuition cost in Europe, though they do show evidence of beginning to spread out in the latter years of the survey. The significantly higher mean MBA tuition cost in Europe makes sense, though, given that almost all of the countries where undergraduate tuition fees are banned by law are in Europe; thus it may well be that European schools seek to make this up at the graduate level. However, the rate of rise in MBA program tuition over the five years depicted here was actually the lowest in Europe, at only 21.4 percent, and only marginally higher in Latin America (at 22.8 percent), whereas at schools in both the Asia-Pacific and Northern American regions the rate was approximately 33 percent.

If it is true that the opportunity cost of higher education has risen as high as it can, tuition-wise, then business schools should expect to see more pushback from students on future tuition hikes. Where declining state support has been the norm in many countries around the world, business schools would be wise to begin looking to emphasize sources of revenue other than tuition increases to offset the loss.

Indeed, such actions may already be underway. According to our analysis of BSQ financial data from those schools that reported their sources of funds in the most recent BSQ (2011-12), on average over 11 percent of the funding reported for schools in Asia and Europe came from non-degree management education offerings, compared to less than three percent on average from schools in Northern America. This may suggest, at least in part, why the rise in tuition rates is somewhat smaller in Europe and Asia than in Northern America.

Comments

[content marketing]

I was wondering if you ever considered changing the layout of your blog? Its very well written; I love what youve got to say. But maybe you could a little more in the way of content so people could connect with it better. Youve got an awful lot of text for only having 1 or 2 images. Maybe you could space it out better?

[Lowongan Kerja Terbaru]

Yes, i am agree there are always many ways to improve the Business School existence, in order to maximize it, we can look around for role models or even the prime idea to be realized into the new concept of education method :)

[Thomas Oppong]

There are always better ways anf innovative ways to survive. These schools teach how to run bussinesses and they should have options to run business schools.