HIGHLIGHTS
- Subramanian defends fee hike of IIT and IIMs
- He was giving a rebuttal to a Twitter threat which showed that IIMs fees have become unaffordable
- He suggested that IITs and IIMs should offer need-based scholarships to those who can’t afford to get a loan
Top economist and former Chief Economic Adviser (CEA) Krishnamurthy Subramanian has defended IIT and IIMs fee hikes as he thinks that the students who graduate from premier institutions get a very high-paying job and they can easily pay their education loans. He was responding to a Twitter thread which showed that IIM fees have risen significantly in 15 years and therefore it is unaffordable.
“IIT and IIM students indeed earn very well after they graduate. Banks are more than willing to lend. It is an investment in one’s human capital. Like other investments- personal or corporate- are made with borrowing, why shud IIT-IIM students not borrow to pay?” Subramanian tweeted.
Ex-CEA Subramanian further suggested that IITs and IIMs should offer need-based scholarships to those who can’t afford to get a loan. “Everyone who can get a loan should pay market fees. The days of socialism are over! If any govt subsidy should go to education, it should be to primary education, not professional education.”
This conversation started when Maheshwar Peri, Chairman & Founder, Careers 360 wrote a Twitter thread on the fee hike of premier institutions like IITs and IIM. He pointed out that the fees of IIM(A) have risen from Rs 4 lakh in 2007 to Rs 27 lakh, a 575 per cent increase in 15 years.
“Thread: The fees of IIM(A) have risen from 4 lacs in 2007 to 27 lacs today, a 575 per cent increase in 15 years. The Income tax inflation index growth for the same period is 146 per cent. IIMs have singularly led higher education to become expensive & unaffordable,” Peri tweeted.
Further explaining why IIMs don’t need to hike fees every year, Peri wrote, “They are rich, slush with funds, generate massive surplus and could charge just 1/3 and still be in surplus. In 2020, the IIM-A revenue from academics was Rs.202 Crores. Of these, Rs. 105 crores were tuition fees.” Peri wrote.
He pointed out that IIMs hiked fees every year and invested the surplus to earn 8 per cent when the inflation is 6 per cent, further leading to unaffordable fees. “They led a pack of wolves commercialising education through market forces. Even a tier 3 B school charges 15 lacs. Now, even UG programs are afflicted to this disease. For a public institution to contribute to rising cost of education is a criminal act,” Peri tweeted.
