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The Indian B-School That Won't Take MBA Tuition Until You Land A Job

One Indian business school is addressing the industry's peril by launching a new "pay after placement" MBA program. Students don't pay tuition until they land an MBA job after graduating.

Thu Jun 19 2014

No MBA job? No problem.

One Indian business school has flipped the rules of the MBA game. Graduates only pay their tuition fees once they secure a job.

Sunstone Eduversity’s “pay after placement” MBA program is poised to shake-up the business school industry in India, which has lost much of its earlier lustre.

The country’s 3,000 schools churn out thousands of management graduates each year, but a recent study found that only 10% of them were considered employable. Aspiring Minds, a talent management firm, surveyed 32,000 MBA graduates from 220 business schools across India.

Other polls have been more positive. But the outlook is overwhelmingly bleak.

Sunstone’s innovative course reduces the financial risk Indian MBA students must make. The program received more than 200 applications within a week of launching.

“It’s not that our industry doesn’t create jobs for young management graduates. It’s the skill gap that obstructs their career path,” said Rajul Garg, founder and director of Sunstone Eduversity, in a press statement.

“This fee arrangement makes career… the final outcome, rather than a paper degree.”  

But the school is also taking a huge risk. Hundreds of business schools have been forced to close in India, due to a sluggish economy and falling demand among business professionals. This is a far cry from several years ago, when new universities scrambled to set-up business schools and cash in on an increasing demand for MBA education.

But the MBA degree is now seen as common. There are also wider concerns about falling graduate pay as the country’s economic stagnation begins to bite. Thousands of Indian managers have instead sought enrolment at business schools in the United States.

Schools’ poor performance is thought to have developed mistrust among Indian MBA candidates. Sunstone recognizes the need to “take the blame for wastage of these thousands of crores and valuable time of students. This is more painful when [the] industry is continuously looking for [the] right management talent and [is] not able to find that”.

The business school seeks to share the financial burden with its students. The “college is also sharing risk with the students, and [the] incentives of college and students are completely aligned”.

The statement continued: “It certainly increases our risks, but at least we are able to provide the right confidence to our students.”

Selection, however, may be competitive. “If we don’t think that we can make a candidate employable, we will tell them right away.”

The program is currently available at Sunstone’s four campuses in Greater Noida and Ghaziabad. The Eduversity has five campuses in Delhi NCR and offers PGDM (MBA), BBA, and BTech programs.

To read more about the fall in demand for Indian MBA programs, see our feature story.