Business Schools

California O.K.'s Tuition Hikes


Increases are set for MBA and other professional programs. Plus: Illinois State's dress code revision, the best B-schools for Hispanics, and more

Students attending MBA programs in the University of California system will have to swallow hefty tuition increases over the next three academic years that will drive the cost of an MBA, in some cases, to $40,000 a year by 2010-2011.

All of the system's business schools will be impacted, but Berkeley's Haas School of Business will see the sharpest tuition increase, with proposed 15% hikes annually over the next three years that will push yearly tuition in 2010-2011 to $40,882 for California residents and $46,574 for nonresidents.

The initiative is part of a plan approved by the University of California's Board of Regents on Sept. 20 that calls for yearly fee increases over the next three years ranging from 7% to 15% for students in the system's business, law, medical and other professional schools. The additional revenue will help the graduate schools bounce back from budget cuts imposed on them earlier this decade, system officials said.

At Haas, the school plans to primarily use money generated from the increase to recruit and retain top faculty, offer new electives and improve the faculty-to-student ratio, Haas Dean Tom Campbell said in an interview. The fee increase is necessary because Haas is competing with public and private universities that charge students substantially more for their education, he said. For example, according to Campbell, Haas is charging $26,881 in tuition for this academic year, while competitors like Stanford, Penn, Chicago, Columbia, Northwestern, and Harvard are charging on average $46,390. Haas's main competitors in the public university realm—the University of Michigan and the University of Virginia—charge on average $38,870, Campbell said.

"The fundamental point is to try to stay a top-flight business school, and that means having the revenue for both programs and professors," Campbell said. "We have to respond to the market, and the increase in the professional fee will allow us to do that."

Cliff Dank, a second-year Haas student and president of the MBA Association, said he supports the fee increase because he believes it is in the best long-term interest of the school and students. "I don't think applicants will be disincentivized to attend school because the present value of a Haas MBA far outweighs the cost of attending Haas," Dank said. "On the margin, there might be a very small percentage of students who don't want to apply, but if you look at us versus our peers, we're really cheap right now. And we'll still be cheap compared to schools of similar quality in five years."

UCLA's Anderson School of Management will see a 12% annual increase over the three years, raising tuition to $39,965 for residents by 2010-2011 and $42,989 for nonresidents. UC Davis' and UC San Diego's business schools will see fee increases ranging from 8.6% to 9.1% over the next three years, with tuition for residents reaching around $30,000 for both schools by 2010-2011.

Officials at all of the schools plan to offset the impact of the tuition increases on students by using at least 33% of the additional revenue to expand their financial aid programs.

Haas' Campbell said he hopes the increase will not pose too much of a burden on B-school students, who now enter the school earning on average $83,613 and leave with a starting salary that is generally 67% higher than when they came in. "To ask them to help contribute to what we believe is a world-class education and still a huge discount to our competitors—I think it's a reasonable request," Campbell said.

Illinois State Softens Dress Code

Dress pumps, tailored shirts, and pressed khakis will still be a common sight in marketing classes at Illinois State University's College of Business but students can now opt out of the department's controversial business casual dress requirement—at a price.

Teachers can dock students by as much as 10% of their grade in class if they show up in clothes not deemed "appropriate business attire," according to a revised version of the school's dress standards distributed to students last week. For example, students who wore sweatshirts, jeans, or T-shirts to class would be penalized.

The updated policy is a compromise of sorts between students and the business school's marketing department, which imposed the dress code (BusinessWeek, 8/28/07)—now referred to as a "dress standard"—on students at the start of the school year. Under the old policy, teachers could ask students to leave the classroom and give them a zero for the day if they chose not to follow the dress guidelines. This is no longer allowed under the new policy. School officials said they wanted the students, in part, to be prepared to meet with recruiters and donors visiting campus.

The initial requirement caused an uproar among many students, some of whom didn't learn about the new dress code until they arrived on campus in September.

"Any time you change anything, there's just going to be some rough bumps," said Timothy Longfellow, chairman of the College of Business' marketing department.

The issue became a hot topic of discussion this September at meetings of Pi Sigma Epsilon, the school's co-ed professional marketing fraternity, where students expressed their frustration with the faculty's decision. Many students said they came to class straight from work and didn't have time to change, while others worried about having to wear dress clothes in snowstorms and bad weather, said Jen Miller, a senior marketing major who is president of the fraternity.

"I think they were mainly upset that the option to wear regular clothes was being taken away from them," said Miller. "College students like to have rights and they don't like to be told what to do."

Representatives of the university's Student Government Association eventually took up the issue with marketing faculty, pointing out to them that the school's student bill of rights guaranteed them the right to not have to abide by a mandatory dress code. The two sides reached a compromise, with the marketing department making allowances for students who opted not to show up to class in business attire. The revised wording of the new policy states that if a student chooses not to follow the recommended dress guidelines or professional behavior standards, it "may lead to a reduction of up to 10 percent of the grade earned in the marketing or business teacher education course."

The faculty added that clause because they didn't want students to blatantly disregard the original intent of the dress policy, Longfellow said. "It's an expectation that we do have of students," Longfellow said. "I think most will continue to dress in business casual, but for those who choose not to there are consequences."

Best Schools for Hispanics

Hispanic Business magazine named Stanford Graduate School of Business as the best graduate B-school for Hispanics in its annual September rankings issue. Included in the top five were the University of Texas at Austin's McCombs School of Business, Columbia Business School, the University of Miami's School of Business Administration, and Berkeley's Haas School of Business.

The schools that made the top of the list distinguished themselves by their strong efforts to attract and retain Hispanic students, said Mike Caplinger, research supervisor at Hispanic Business. In addition, they scored high in the enrollment and faculty categories, retention rates, and in the student program category. "We like to see that [the schools] are making efforts above and beyond the 'usual' to appeal to the Hispanic students," Caplinger said.

Other schools in the top 10 include Emory's Goizueta Business School, Dartmouth's Tuck School of Business, the Yale School of Management, Duke's Fuqua School of Business, and Florida International University.

Washington, N.C. State Name Programs

The University of Washington is renaming its business school the Michael G. Foster School of Business after receiving a $36.5 million gift from his family's foundation. The business school is one of a number of institutions in recent years that have chosen to rename their schools after receiving hefty donations from alumni (BusinessWeek, 9/7/06).

Foster, a UW alumnus who died in 2003, was a businessman and co-founder of the Foster Foundation, which has given $50 million to the school over the past 25 years. James Jiambalvo, dean of UW's business school, called the gift "transformational" in a statement released by the school. The donation will help the school compete for top faculty, as well as offer bolstered scholarship support and financial aid to students, he said.

Meanwhile, North Carolina State University in Raleigh has named its graduate programs the Jenkins Graduate School of Management in the North Carolina State College of Management. The school is named for Benjamin (Ben) P. Jenkins III, vice-chairman and president of the General Bank at Wachovia (WB) and an N.C. State graduate and donor.

Grenoble, Mississippi Form Alliance

Business schools in Mississippi and France have formed an alliance across the Atlantic this year that will enable them to offer a doctorate of business administration degree to executives. This will be the first partnership between the University of Mississippi's School of Business Administration and the Grenoble Ecole de Management.

Grenoble has formed similar partnerships with China's Tongji University and Britain's Newcastle University, but this is the first time Grenoble is partnering with a U.S. school.

The program is expected to draw midcareer and senior executives who want to pursue international careers in both the private and public sector. Graduates will receive a joint certificate from both schools, along with a doctorate from Grenoble. The first class will be held this November at Grenoble.

Administrative Move

The University of San Diego's School of Business Administration has named David Pyke as its new dean, effective August, 2008. Pyke is currently the associate dean of the MBA Program at Dartmouth's Tuck School of Business, and the Benjamin Ames Kimball Professor of the Science of Administration. Pyke will be the permanent replacement for Mohsen Anvari, who resigned after being convicted of a drug charge in October, 2006. Economics Professor Andrew Allan, the interim dean, will stay in the post until Pyke takes over.

IMD has tapped John Wells to serve as the next president of the Lausanne, Switzerland business school, effective next spring. Wells is a professor of management practice at Harvard Business School. Prior to joining Harvard Business School in 2002, Wells held senior executive roles at PepsiCo (PEP) and Thompson Travel. Wells will take over for Peter Lorange, who has led the business school since 1993.

Howard Frank, dean of the University of Maryland's Robert H. Smith School of Business, will step down at the end of this academic year. Frank, who has led the business school for the past decade, helped increase its endowment from $6 million in 1997 to more than $50 million. After taking a one-year sabbatical, Frank plans to return in the fall of 2009 as a professor of management sciences. The search for his successor will begin this fall, school officials said.


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