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Tuesday, January 8, 2013

Tuition Hike in IITs

Anything IIT Council does is worthy of news, and yesterday's meeting has been covered by all newspapers. The headline, of course, is that the IIT Council has decided to increase the under-graduate tuition from 50,000 a year to 90,000 a year from the academic year 2013-14. The fee hike will be applicable only to students who are admitted now and will not affect the existing students. It is to be noted that tuition is paid only by about 50 percent of the under-graduate students. SC/ST students and all other students with annual parental income less than 4.5 lakh rupees will not pay tuition. (Note that I am just quoting from newspapers, and I do not have official Council minutes. In fact, they may not be available for several weeks.)

Of course, this will lead to a hue and cry about whether students with parental income more than 4.5 lakhs can afford it. What is the right model of funding and subsidy for education in top institutions. We will again have debates on how easy or difficult it is to get a bank loan. Whether there should be a mechanism of zero tuition now, but employer paying the education cost later, or higher tax on those who get such education, so that they can pay for education when they can afford it, and not now. And I ain't getting into all this right now.

However, I do not understand the point about exempting current students from a fee hike. It is often said that there is an unwritten contract that we will provide education at a certain cost. If there is one, then shouldn't that cover mess bill, electricity charges, and all other costs that the students have to bear. And is that unwritten contract only between students and government. Is there no unwritten contract between citizens and government. Shouldn't every citizen continue to get at least basic necessities like wheat and rice at the cost determined at the time when their parents decided to conceive. When Government raises price for LPG cylinder, it should be done so only for citizens born after a certain date.

But, of course, tuition will continue to be a small part of our budget, and this increase would not be even noticed in our balance sheet. In that sense, whatever government decides is fine. In the next financial year, IIT Kanpur will have about 830 under-graduate students, out of which about 430 students will pay this increased tuition. So we get an additional Rs. 1.7 crores. With an overall budget of at least Rs. 350 crores, this will hardly make a big difference.


nehchal said...

If tuition fee is less than even 1% of overall budget, then why the IIT Council decided for hike in fee? Why IIT Council wants to stretch the parental budget? Does it think that, fee hike may lead to fewer candidates in JEE ?

Dheeraj Sanghi said...

@Nehchal, I did not say that fee is less that 1%, I said that the incremental amount in Financial Year 2013-14 will be less than 1%. May be I should have written a longer blog, explaining other background. But I thought everyone will read that in the news papers. The Kakodakar committee had an elaborate plan to hike the tuition to 2.5 lakhs two years ago, and a complex plan of how that payment will be realized (students won't have to pay that immediately). And that was supposed to make IITs more financially autonomous. This hike is being justified as the first step towards that goal. But it is such a tiny step, and there is no plan for deferred payment of tuition by people who can't afford it right now.

gauravgupta said...

Sir, is it possible that IITs in subsequent years allow certain donation based admissions to maybe (10-20)% of students securing more than a fixed percentage in JEE.
That would -
i) Significantly improve funds available.
ii) Fulfil the ambitions of those who can afford WITHOUT compromising with the deserved candidates.
iii) The 'IITian' brand-name would still be maintained because those candidates would still have a better JEE score than about half the existing students.

Prashant said...

Dr. Sanghi, does IIT charge the companies which come for placements? IITs can explore a model, where the placement cell charges a company 8-10% of a candidate's annual salary per placed candidate. This is a very standard practice with recruiting agencies; even Coursera and Udacity are doing this. In fact, 8-10% is being conservative; the standard cut is much higher than that I believe.

Let's say 1000 students are being placed every year, with an annual salary (not CTC) of 7 LPA; the amount raised by IIT in this manner would be 7 crores.

Also, reservation is a decision of parliament; but is their reduced fee also mandated by parliament? The reason I ask is; because with 50% seats for reserved groups, I am not sure how sustainable it might be eventually. Also, someone should clamp down on MCM misuse which is rampant. Unfortunately, in India, you cannot point out such things without being called a "goodie-boy".

Anyway, a loan based model should work fine.

Dheeraj Sanghi said...

@Prashant, We do not charge companies that come for placement. I am not involved with placement for many years now, but the last I raised this issue, I was told that if metro IITs start charging, we will study the impact of that charge on their placement, and then frame our policy accordingly.

Lower tuition is not mandated by Parliament, but tuition is decided by IIT Council and not by IIT Boards, and IIT Council is a political body that we have seen during the JEE debate. And if government says that we are paying you enough, why do you care who pays tuition and who does not, there is not much that we can argue with such a decision.

Ankur Kulkarni said...

I think the bigger news is that IITs have agreed for a peer review.

Chandresh said...

In the interest of transparency should the Government of India deposit the fee differential for SC/ST candidates in the individual student's Aadhar Account? All students should then be charged uniform fees and other charges.

This will make the accounting more transparent.

Ungrateful Alive said...

It was known that some of the Kakodkar Committee recommendations would be implemented, but few would read such a tome in all detail, and no statement was made about which recommendations would be implemented and when. In keeping with IIX's hyper-corporate culture, the major stakeholders (faculty members) have to learn the current story from the press, not from emails from directors. Actually, it may be a mistake to call this style hyper-corporate. If an action of the US government was affecting Microsoft or Google or Cisco as much, rest assured the CEO would send out one or more all-hands messages explaining the situation. Directors, being much busier and more important than those CEOs, cannot possibly bother.

iitmsriram said...

I don't believe IITs would get anything "additional". The tuition fee increase is part of the finance and accounts restructuring package; some students would pay the increased tuition and for the others, the annual government grant would show "x" amount as being towards tuition fee and this would be part of the plan grant. In a couple of years or so, the typical "old" IITs would have about 8000 students, so the annual income from tuition fees would be about 70 crores (with maybe 20% coming from students and the rest from government). Already, scholarships (HTRA and HTTA) are given as plan funds. With a few more such changes, the government plans to do away with the non-plan grant entirely. Along with the 5 year peer review, IITs would have to submit proposal for plan funding in every 5 year plan, and so on.

For me the bigger news is the scheme of admitting students into PhD program after 3rd year at NITs and other central tech institutions with 7.0 CGPA translating into scholarships without GATE. There is also the "enhanced fellowship" for top 10% of PhD entrants which all could help make the PhD programs stronger.

gautam barua said...

1. The reason why only new students are going to be charged the enhanced fees is technical: they were not told when they entered an IIT that the fees may change (our mistake). So, if you read the news report carefully, it also says that fees may be changed in subsequent years too. This will be put in the admission letter, binding students (and their parents) to pay higher fees if announced. The courts have earlier shot down fee increases for current students.
2. The issue of increasing fees further (to 2.5 L and further as per inflation rates) as per the Kakodkar committee's recommendations is still under debate, and the Council will get view points from different stakeholders and decide what to do in its next meeting. This deal includes a proposal to remove non-plan funding from the govt. This proposal says that EVERYONE will pay the higher fees. Category students, poor students (income wise), PG students, will be paid the fee amounts by the Govt. DIRECTLY (as Chandresh has suggested) who will then pay to the IITs. So, a lot of the funding will move from non-plan to plan heads of accounts. Only about 25% of the students in an IIT pay tuition fees (see Dheeraj's calcs and to that add that about 50% are PGs).
3. There will be a loan scheme where students will repay only after they graduate and get a job.
4.Some of us are not very comfortable with the proposal of govt not funding any of the non plan expenditure (a la IIMs) as the ability of IITs to raise fees will not be as unconstrained as that for IIMs. Increasing fees along with a loan scheme is fine, but to leave us to fend for ourselves in times of stagflation?
5.And what autonomy will we get? CAG will still audit the accounts, and can pay scales really float? Are they floating in the IIMs? The debate is on.
Gautam Barua

Ungrateful Alive said...

Is tuition progressive on family income? If there is a cliff at 5 lakhs/y, where is the justice in having 5.1 lakh parents pay in full and 4.9 lakhs go scot-free? Cliffs are an extra incentive for dishonesty because they are unfair.

And that "peer review", I imagine, is limited to faculty members being evaluated by foreign peers. Can we extend this wholesome process to review of sweepers, office staff, maintenance staff, by their foreign peers? Never, because the council, all such committees and "institute functionaries" will be spayed by non-academic unions at the first mention of such a plan.

Finally, at my IIX, no official announcement or discussion happens. We find out what is happening around IIXs from the media. This is a shame.

Pravin Gangwar said...

You stated fee hike from 50000 to 90000. But when I think it was already hiked to 72000 in 2007/2008, isn't it?

Dheeraj Sanghi said...

@Pravin, it may have been 72k or whatever because of other charges like hostel related charges.

Prashant said...

I am curious, what kind of fees does an institute like IIITD charge. Reason I ask, is because, they have hired some brilliant Indian students who completed their PhD in the US and they are more than happy to return back.

Seems like they recruited very professionally, in the US. Providing airfare, good hotels etc. And seem to be offering very competitive salaries to professors as well. Some brilliant students from IIT have returned to India to teach there.

Is there a remote possibility of at least some IITs "breaking away" from the system and functioning as independent units like some of the IIITs. Functioning as one block under an IIT council makes them all the more subject to centralized control (and possibly weakens each institute as an individual institute).

Gaurav Chakravorty said...

Prof Sanghi,
Greetings. It's been ten years since you invited our batch to a dinner at your place.

About this topic, the fair ( read easily arguable in public ) policy is perhaps to index fees to inflation. If extrapolating from fees over the years and adjusted for inflation the tuition should exceed 720,000 a year. I think given that there will be merit cum means adjustment to this, this should be well worth the benefit of studying at IITs. It should also reduce the resentment of the average Indian citizen on students studying at IIT at giveaway costs and heading out to developed countries, since they are paying a slightly higher share of the expenses. IITs are a global brand and with the maturity of capital markets in India I expect very aggressive student loan offers available to students who need it. There is nothing wrong with student loans, I feel and would add to discipline in students. This system has worked well in the US for decades.
I think this is a more sustainable form than what is termed as "donation based" forms of revenue. The average cost per year of Harvard education is $110,000 or Rs. 60,50,000 per student and less than 45% students get any reduction on this. On the other hand more than 75% students pay off their loans in less than 2 years after graduation.
Disclaimer: I have just read the issue and my thoughts might be naive and scratching the surface.

Dheeraj Sanghi said...

@Gaurav, if there is a will, there is a way. Given a choice, we can come up with a model of fee which is indexed on inflation. We can then have a model of deferred partial payment which allows students to pay accordingly to their current capability, and the rest is paid later. There are several models for deferred payment, including educational loans, which can be adopted. But in a country where the rich argue for subsidized AC-1st train fare, it is extremely difficult to sell such a proposition.

Ajit R. Jadhav said...


>> "But in a country where the rich argue for subsidized AC-1st train fare, it is extremely difficult to sell such a proposition."

You said it.