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Our guest on February 9, 2001, was Chuck Johnson, director of the professional Master's programs for Purdue University's Krannert Graduate School of Management. (No. 25 on BusinessWeek's 2000 Top 30 B-Schools list). Prior to joining Krannert in 1998, Johnson spent 11 years at Bowling Green State University, where he received his MBA in 1987 and, among other positions, was director of graduate studies in business. Johnson was interviewed by Lucia Quartararo for BusinessWeek Online. Following is an edited transcript of their conversation:
Q: For the 2000-01 year, tuition for Indiana residents at Krannert was $8,972, and $17,892 for non-residents. Both figures are relatively small compared to other U.S. B-schools in BusinessWeek's Top 30. But that's not the end of the costs associated with an MBA. What should a student budget for a year of study?
A: A typical budget for an out-of-state student would be around $26,000, and about $20,000 for an in-state student. Things like housing and personal expenses will vary greatly depending upon a person's needs, [but] it's possible to live on campus relatively inexpensively, for maybe $5,000 a year. As far as off-campus accommodations go, one-bedroom apartments are in the $450 range and two-bedroom apartments are in the $700 range. Location does make a bit of a difference, but [West Lafayette] is very affordable.
Q: Merit-based assistance is a great source of funding for prospective MBAs. How can a candidate get considered for this type of aid?
A: It's an automatic process. We don't ask [applicants] to submit a separate application. When they apply, they are automatically considered for awards for which they may be eligible. [Some of our awards are designated] for the top-tier of our entering class, and so we will automatically consider those applicants that fit the bill for those awards.
We try to identify the individuals who are at the top of the entering class and use the money as a way to reward and entice those students. Candidates for our one-year MSIA [Master in Science in Industrial Administration] program and two-year MSHRM [Master of Science in Human Resources Management] are also eligible for merit awards.
Last year, the awards ranged in value from $2,000 for one year to $23,000 for two years. [This includes] pairings of different types of awards. For example, we might pair a tuition scholarship with cash scholarships. About 25% of the entering class would get some kind of funding, and about half of those would get a one-year cash award.
Q: Krannert also has a well-established program to help fund underrepresented minority students interested in earning an MBA.
A: In the late 1960s, our faculty developed a program for underrepresented minorities in the business school. We got corporate funding to help us establish this program, called the Business Opportunity Program, or BOP for short. It has been under the direction of Cornell Bell, the director of Minority Student Business Programs and a faculty member here since 1971. He is a legend in the industry and has done a tremendous job over the years.
[Our funds come] directly from Krannert, from our alumni and our corporate donors. We offer students close to a full-tuition scholarship for the two years that they're here. In the second year, some [awards] are converted to graduate assistantships where [students] may work 10 to 20 hours a week to earn the award.
About 15 [underrepresented] students in each class are funded, that's 25 to 30 students in the entire program. [Underrepresented students comprise] 9% of our student body, and most of those students are funded through this program.
Q: Graduate assistantships are very popular among Krannert students. Are those positions available to all MBAs or just second-years?
A: [Graduate assistantships] are available to all students. This is probably one of the little-known secrets about Krannert. There are a lot of positions, not just within [the B-school] but throughout Purdue for our students. [And they] are highly sought after by other offices. Students really help run Krannert, and we couldn't function at the school without their support.
We have an extensive list of [graduate assistant] positions that we post on our Web site. We begin to look for people to replace the students who will be leaving in the fall in February. But a lot of positions get filled over the summer and at the beginning of each semester.
Q: Is the school concerned that assistantships might be burdensome, especially for first-years who have so much on their plate?
A: We have a long tradition of [students performing this role]. All things being equal, it's always better to at least get your feet on solid ground academically before you attempt [a graduate assistantship]. Even though Krannert is known as not having one of the lightest workloads, we probably have one of the higher percentages of students who are working their way through school. Keep in mind [that these jobs only require] 10 to 20 hours a week, so they don't interfere as much with academics.
Q: Residence Hall counselor positions are another opportunity that students have to help defray costs. What do those entail?
A: Many schools have resident assistants, but at Purdue [the position is] very lucrative. The Residence Hall counselor positions include partial fee remission and [a percentage of] housing costs. They're perhaps more lucrative than they might be at other universities. With a Residence Hall counselor position, a person can pay for much of the tuition costs, as well as the cost of living for two years. These [positions] do require an interview.
Q: Loans, of course, are another option for anyone looking to finance a graduate degree. When's the best time to begin the loan process?
A: The [Free Application for Federal Student Aid, or the] FAFSA form should be filed as soon as possible. The earlier that [applicants] complete that application, the earlier they will know whether they're eligible for subsidized loans or whether they'll need to go to direct loans from a third-party lender. Mar. 1 is the deadline for subsidized loans. [The loan application] should be part of an overall plan when applying to Krannert or any other school.
Q: Does Krannert recommend any third-party lenders?
A: Krannert doesn't get involved as an intermediary for that type of funding. My recommendation is [that applicants] first go to their personal bank. [Your current bank] will tend to give you quicker service and consider a new loan as a way to expand your relationship.
Q: That said, does the school recommend any Web sites to enrolled students in search of more cash?
A: The Graduate Management Admission Council has a great site with a whole range of services, including connections with lending sources.
Q: In the 2000-01 academic year, Krannert's percentage of international students was 41%, the second highest on BusinessWeek's Top 30. What methods for securing funding do you recommend to your foreign constituency?
A: We don't have a special loan program, but our international students have been very successful [finding funding]. We have some scholarships through donations from international alumni. For example, a German alum, Jgen R. Grossmann, established a scholarship in the name of his company, Georgsmarienhuette Holding, in Germany. That [scholarship] helps fund two to five Central European students a year.
We've also funded international students from our general fellowship budget, but actually, the biggest success story for international students has been their ability to get graduate assistantships on campus. Part of that is due to the fact that many of our [foreign] students come in with outstanding technical skills.
Q: Total enrollment at Krannert last year was 320, making your MBA program one of the smallest in BusinessWeek's top 30 rankings, so filling those seats with top students is key. Is Krannert committed to growing its scholarship kitty in order to continue to attract top-tier candidates?
A: Yes. Last year, the dean gave us an additional allocation for fellowship awards. We went from $350,000 in cash awards to over $600,000. [This increase] went a long way in helping us broaden our appeal, as well as attract students who perhaps otherwise may not have considered us in the final analysis.
Q: Is your office responsible for the whole university or just Krannert students?
A: We fund our merit-based awards in this office. Only about 20% percent of our students -- believe it or not -- get subsidized loans, so only that [small percentage will have to] deal with the university financial-aid office.
Q: What options does your office offer to married Krannert students?
A: There has been a recent increase in [the married-student] population. In addition to our two-year MBA program (formerly known as MSM [Master of Science in Management]), and our MSHRM, we also offer the one-year MSIA program, which is really attractive to folks who have been out for longer [and more likely to be married] because [there is less of a] disruption for families.
The local economy has been very good. Our unemployment rate has been below 2% over the last several years. [We also have some] major employers in the area: Purdue, obviously, but also Alcoa, Caterpillar, Subaru Isuzu of America, Great Lake Chemical, Wabash National Corporation, Siemens, and State Farm Insurance all have major operations here. Also, we're only an hour from Indianapolis. Several students' spouses work in Indianapolis, [where there are] a lot different [job] opportunities.
Q: Some public institutions tout second-year in-state residency as a cost-saving measure. Does Krannert encourage its MBAs to apply for residency?
A: In Indiana it's a little different. You don't automatically get residency just because you're going to school in the state. [In order to attain residency,] you have to have lived, worked, and paid taxes here for at least a year before going to school. However, if you have a spouse who is working in Indiana, you can qualify as an in-state resident almost immediately.