Why are business schools so expensive?

Why are business schools so expensive?

The continuing rise in the cost of business schools in particular can be explained by the investments they are making to maintain their places in the world rankings.

Business schools are expensive. At the start of the 2022 academic year, the average cost for an academic year was €11,700. But for the best schools, the bill can be much higher. For the three “Parisiennes” HEC, Essec and ESCP at the top of the Figaro Étudiant rating, you have to pay between 16,800 and 17,768 euros per year. Amounts very different from those that can be found at the university. Why are business schools so expensive? The main reason is related to low subsidies and massive investment to face competition.

Much lower cost than foreign business schools

While business schools are quite expensive compared to other French higher education courses, they are still less expensive than in other countries. “Studies seem expensive, but they are expensive compared to what?” , asks Pierre-Emile Ramauger, director of development and commercial relations at Montpellier Business School. Foreign schools in the Financial Times Top 40 cost an average of $40,000 per year. The budget for business schools seems high because in France we are used to providing free training paid by the state,” continued. Before adding: “The state pays an average of 16 thousand euros to students in the preparatory year.” Therefore, it is not surprising to find that the cheapest school among those offering a master’s degree is a public school, the Institut Mines Télécom Business School (IMT-BS). Associated with the Faculty of Communications Engineering, IMT BS, which offers the Grande Ecole program at a price of 7,750 euros per year, sees its budget half funded by the state.

Read also – Discover the Figaro Etudiant Business School Rankings

However, IMT-BS is an exception. Unlike universities and some engineering schools, business schools are almost never state funded. Moreover, the support provided by the Chambers of Commerce and Industry (CCI) has decreased significantly in recent years. To deal with this fall, many of them revised their model to become real companies subject to the requirements of financial balance. Such is the case of the three “Parisiennes”, who have been part of a holding company since 2019. This financial company, majority owned by CCI, includes 16 business schools in Ile-de-France.

Arranging requires huge investment

On the spending side, the trend is also upward. The level of tuition fees is related to the order each school targets in the French and international rankings. Also, in the rating, the best schools are always the most expensive. To meet grading criteria and maintain Equis, AACSB, EFMD or Amba accreditations, designations essential to highlighting quality teaching and facing national and international competition, schools are subject to ever-increasing investments. It follows in research and equipment. “At ESCP, we hire among the best researchers in the world, and that’s at a cost”, explains Leon Olsa, Deputy Director General in charge of Academic and International Affairs. However, the school’s poor reputation makes it possible to quickly make a profit of 16,892 euros that students invest each year.. “Three years of training equals an average of 10 months of salary upon departure,” Leon says to Olsa.

Solutions and aids to reduce costs

For students, these amounts can act as a brake. Although it is possible to get a student loan from banks (at an interest rate of 0.8-2% depending on the bank), some do not dare to embark on such studies, due to the lack of possibilities. However, various solutions exist to help students from humble backgrounds to finance their education. Among them: rotation. Students are allowed to alternate between their training and work in a company. Thus, by taking a first step in the world of work, they get a salary. Today, all business schools, except HEC, offer this alternative that is economically interesting but also highly professional. “At Montpellier Business School, work and study are compulsory in the last year”, So says the director. The latter also ensures that students who choose a work-study program in Master 1 and Master 2 do not ultimately pay “Only 12,300 euros for three years of study at the school”.

Also Read – Complete Classification of Preparatory Classes for Major Schools

Most schools allow some of their students to get a scholarship funded by the school and the sponsoring companies. Some business schools such as ESCP, Essca or Toulouse BS (TBS Education) have chosen to adjust tuition fees according to family income. “We have already implemented a fee adjustment ranging from 25% to full tuition fees,” Explains Jean Charoen, General Manager of Esca. “From September 2022, we will further strengthen this policy and the most humble families will not have the money to pay for their children’s education,” He adds.

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