The World's Most Elite Cartel - Page 2
In Asia, This whole race for the MBA degree has spawned a sub-industry of sweat shops that cater to everything from MBA counseling (not career counseling) to agencies that churn out your Statement of Purpose. Most of the MBA coaching centers in India (for example) have 80% of their aspirants from the Information technology Field.
Hold on, but is there anything really wrong with this? Why is it wrong for today's youth to aspire for better jobs, better money and a better lifestyle? Of course it isn't, the only concern is that this unnatural love-affair for an MBA has skewed the playing field in a way that makes it a ticking time-bomb.
Consider the following example: -
Lets suppose, candidate A wishes to enroll for an MBA in a top notch university. He has to pay - $40,000 for the tuition fees. The fees are stiff but he gets a bank loan for 80% of the course. His loan for $32,000 now needs to be paid out as soon as he finishes his course.
However for him to break even, he would have to get a job that pays him at least double or triple that amount (~ $125,000 p.a.), so he could look forward to clearing his debt of in less than a year. However MBA salary hikes have been flat since the 2008 crash and even $110,000.p.a. are hard to come by these days. Here's the catch, US companies are known to reward their managers with hefty bonuses and this more than makes up.
In India, MBA salaries have been shooting through the roof. If you're from a premium Management Institute upon graduation, you would be earning at least 3-4 times what your peers are earning at your same level (graph attached) or sometimes even more.
So since the candidate will eventually recover his costs, the college would stick to this working model and keep increasing its tuition fee. College managements live with the surety that they will eventually be paid their dues by the banks. Students would never default on their loans since the market is headed in only one direction: it's a win-win for all parties. In fact, a recent report by the GMAC council (who conduct the GMAT course) predict more jobs and higher pay for MBA's in 2013 !!Continued on the next page