MBA Fees: A two-year IIM programme can put you in debt for over 12 years

Analysis of IIM MBA fees, placement data shows bottom 50% earners graduating from IIMs are leaving B-schools with an average of Rs 17.06 lakh debt.

IIM Graduates Face Over 12 Years of Debt with Monthly Installments Extending for 152 Months. Comparatively, IIT Delhi Management Studies Graduates Achieve Debt-free Status in Less Than Four Years.

Analysis of Placement Data Reveals Extensive Debt Burden for IIM Graduates: Average Salaries and Loan Tenures Calculated

Career360 obtained placement data from all 20 IIMs, with 12 providing average salaries for the top 50% of the batch in 2021-22, and all disclosing average and median salaries for the entire batch. By extrapolating this information, the average salaries for the bottom 50% were determined, factoring in tax deductions and net take-home pay. Loan tenures were then calculated based on the two-year programme fees at each respective IIM, with an assumed education loan interest rate of 9.5% per annum, although the State Bank of India’s (SBI) rate can reach 10.2%. The maximum monthly EMI was set at 30% of the net salary.

For example, let’s consider IIM Jammu. The average salary is Rs 13.78 lakh, while the top 50% earned an average of Rs 17.83 lakh. Consequently, the average salary for the bottom 50% amounts to Rs 9.73 lakh. After deducting 25% for standard contributions like provident fund and employees’ state insurance, and applying the relevant tax rate based on income brackets, the monthly take-home pay stands at approximately Rs 57,738. With a 30% EMI cap, the monthly installment comes to Rs 17,321. Meanwhile, the fees for the batch at IIM Jammu amounted to Rs 13.80 lakh. Assuming the entire amount is funded through a loan with no margin money, the principal to be repaid at the end of two years totals Rs 15.66 lakh.

In the absence of any part-payments towards the principal throughout the loan tenure, a fresh IIM Jammu graduate will remain in debt for over a decade, despite attending a government-subsidized public institution. While the newer IIMs still receive government support, their fees closely resemble those charged by autonomous institutions like IIM Ahmedabad, IIM Calcutta, and IIM Bangalore, which no longer rely on government funding.

Note: The analysis also includes insights into upcoming campus placements and internship trends, as well as salary projections for 2023-24.

IIMs Achieve 100% Placements, Salary Figures Revealed for 2021-22

In the latest placement season, all IIMs, except IIM Ahmedabad, IIM Tiruchirappalli (IIM Trichy), and IIM Visakhapatnam, reported a 100% placement rate, indicating that all participating students secured job offers. While eight IIMs did not disclose average salary data for the top 50% of the batch, these figures were extrapolated using mean, median, and average data for the top 20% or top 25% candidates. Notably, any figures calculated from other available data have been highlighted.

Below are the average salary packages, as well as the top and bottom 50% salary ranges for IIMs in the 2021-22 academic year:

IIM Ahmedabad:

Average Salary (Top 50%): Rs 36,64,526

Average Salary (Bottom 50%): Rs 24,43,018

Monthly Take-Home (Bottom 50%): Rs 1,27,800

IIM Bangalore:

Average Salary (Top 50%): Rs 40,58,400

Average Salary (Bottom 50%): Rs 27,05,600

Monthly Take-Home (Bottom 50%): Rs 1,39,091

IIM Kozhikode:

Average Salary (Top 50%): Rs 39,20,000

Average Salary (Bottom 50%): Rs 19,80,000

Monthly Take-Home (Bottom 50%): Rs 1,07,825

IIM Calcutta:

Average Salary (Top 50%): Rs 41,35,000

Average Salary (Bottom 50%): Rs 27,05,000

Monthly Take-Home (Bottom 50%): Rs 1,39,065

IIM Lucknow:

Average Salary (Top 50%): Rs 38,20,000

Average Salary (Bottom 50%): Rs 23,86,000

Monthly Take-Home (Bottom 50%): Rs 1,25,348

IIM Indore:

Average Salary (Top 50%): Rs 30,01,200

Average Salary (Bottom 50%): Rs 20,00,800

Monthly Take-Home (Bottom 50%): Rs 1,08,784

(Note: The remaining IIMs and their corresponding salary data have been omitted for the sake of brevity.)

These salary figures provide insights into the earning potential of graduates from different IIMs. While some institutions show significant variations between the top and bottom 50% earners, others demonstrate relatively narrower gaps. It is important to note that these figures reflect the monthly take-home pay of the bottom 50% after deductions.

These statistics shed light on the successful placement efforts of the IIMs and provide valuable information for aspiring management students seeking to understand salary trends and opportunities across different institutions.

IIM MBA Fees for 2020-21 and Education Loan Analysis

During the 2020-21 academic year, IIM Ahmedabad, IIM Bangalore, and IIM Calcutta emerged as the most expensive institutions, with their two-year MBA programs costing Rs 20 lakh or more for the graduating batch. Conversely, IIM Sirmaur, IIM Sambalpur, and IIM Bodh Gaya were positioned at the lower end of the fee spectrum. Additionally, there were several IIMs that charged between Rs 12 lakh and Rs 16 lakh. In comparison, the management departments at Indian Institutes of Technology (IITs) offered MBA programs at relatively lower costs, with IIT Kharagpur’s Vinod Gupta School of Management charging Rs 10.29 lakh, still lower than the least expensive IIM fee.

This variation in MBA fees across different institutions highlights the financial considerations that students need to weigh while making educational choices. Furthermore, an analysis of education loan options and associated repayment terms becomes crucial for students aspiring to pursue an MBA.

IIM MBA Fees and Corresponding Loan Tenures for the Bottom 50%

Below is a list of the two-year MBA fees at various IIMs during the 2020-21 academic year, along with the loan tenures in months for the bottom 50% of students:

IIM Ahmedabad: MBA fees for 2 years – Rs 20,52,000; Loan tenure (Bottom 50%) – 81 months

IIM Bangalore: MBA fees for 2 years – Rs 21,00,000; Loan tenure (Bottom 50%) – 75 months

IIM Kozhikode: MBA fees for 2 years – Rs 17,50,000; Loan tenure (Bottom 50%) – 83 months

IIM Calcutta: MBA fees for 2 years – Rs 20,00,000; Loan tenure (Bottom 50%) – 70 months

IIM Lucknow: MBA fees for 2 years – Rs 19,00,000; Loan tenure (Bottom 50%) – 75 months

IIM Indore: MBA fees for 2 years – Rs 13,50,000; Loan tenure (Bottom 50%) – 58 months

IIM Raipur: MBA fees for 2 years – Rs 12,99,700; Loan tenure (Bottom 50%) – 80 months

IIM Rohtak: MBA fees for 2 years – Rs 17,06,500; Loan tenure (Bottom 50%) – 139 months

IIM Udaipur: MBA fees for 2 years – Rs 16,02,000; Loan tenure (Bottom 50%) – 109 months

IIM Kashipur: MBA fees for 2 years – Rs 12,42,000; Loan tenure (Bottom 50%) – 92 months

IIM Tiruchirappalli: MBA fees for 2 years – Rs 16,50,000; Loan tenure (Bottom 50%) – 111 months

IIM Ranchi: MBA fees for 2 years – Rs 16,00,000; Loan tenure (Bottom 50%) – 125 months

IIM Shillong: MBA fees for 2 years – Rs 15,24,000; Loan tenure (Bottom 50%) – 71 months

IIM Visakhapatnam: MBA fees for 2 years – Rs 14,33,250; Loan tenure (Bottom 50%) – 113 months

IIM Jammu: MBA fees for 2 years – Rs 13,80,000; Loan tenure (Bottom 50%) – 152 months

IIM Nagpur: MBA fees for 2 years – Rs 11,10,000; Loan tenure (Bottom 50%) – 71 months

IIM Amritsar: MBA fees for 2 years – Rs 12,40,000; Loan tenure (Bottom 50%) – 97 months

IIM Bodh Gaya: MBA fees for 2 years – Rs 10,50,000; Loan tenure (Bottom 50%) – 99 months

IIM Sambalpur: MBA fees for 2 years – Rs 10,50,000; Loan tenure (Bottom 50%) – 93 months

IIM Sirmaur: MBA fees for 2 years – Rs 10,34,000; Loan tenure (Bottom 50%) – 90 months

Comparatively Lower MBA Fees at IITs with Competitive Average Salaries

In contrast, some departments of management at Indian Institutes of Technology (IITs) charged significantly lower fees for their MBA programs. For instance, IIT Kanpur charged as low as Rs 3.56 lakh, while IIT-ISM Dhanbad charged Rs 3.67 lakh. Despite the lower fees, these IITs managed to achieve relatively high average salaries for their graduates.

Among the IITs, IIT Kharagpur’s Vinod Gupta School of Management charged Rs 10.29 lakh in 2020-21, which was still lower than the fees charged by any IIM. However, in 2021-22, graduates from this institution secured higher average and median salaries compared to 13 IIMs, despite the higher fees charged by the latter. Similarly, IIT Delhi’s Department of Management Studies (DOMS), ranked higher than all but four IIMs in the National Institutional Ranking Framework (NIRF) 2023 ranking, charged Rs 9.83 lakh, lower than all IIMs. Nonetheless, it boasted average and median salaries surpassing those of over a dozen IIMs.

Notably, even the highest average and median salaries at the IITs, particularly IIT Bombay, were lower than those offered by the top IIMs. Below are the fees charged by these IITs:

IIT Kharagpur Vinod Gupta School of Management (2020-21): Rs 10.29 lakh

IIT Delhi DOMS: Rs 9.83 lakh

These fee and salary comparisons provide valuable insights for prospective MBA students as they consider various institutions and weigh the associated costs and potential returns on investment.

IIT Department of Management Studies (DOMS): Fees, Average Salaries (2020-21), and EMI Tenure (Months)

Here are the MBA fees, average salaries for the bottom 50% of graduates, and the corresponding loan tenures at various Indian Institutes of Technology (IITs) for the 2020-21 academic year:

IIT Madras:

Average Salary (Bottom 50%): Rs 13,05,000

MBA Fees: Rs 6,10,336

Loan Tenure (Bottom 50%): 35 months

IIT Delhi:

Average Salary (Bottom 50%): Rs 17,52,000

MBA Fees: Rs 9,83,400

Loan Tenure (Bottom 50%): 45 months

IIT Bombay:

Average Salary (Bottom 50%): Rs 20,70,000

MBA Fees: Rs 8,17,800

Loan Tenure (Bottom 50%): 31 months

IIT Kanpur:

Average Salary (Bottom 50%): Rs 14,26,000

MBA Fees: Rs 3,56,000

Loan Tenure (Bottom 50%): 18 months

IIT Roorkee:

Average Salary (Bottom 50%): Rs 13,00,000

MBA Fees: Rs 8,46,200

Loan Tenure (Bottom 50%): 52 months

IIT Kharagpur:

Average Salary (Bottom 50%): Rs 15,35,000

MBA Fees: Rs 10,29,600

Loan Tenure (Bottom 50%): 55 months

IIT Dhanbad:

Average Salary (Bottom 50%): Rs 13,84,000

MBA Fees: Rs 3,67,100

Loan Tenure (Bottom 50%): 19 months

IIT Jodhpur:

Average Salary (Bottom 50%): Rs 10,71,000

MBA Fees: Rs 8,71,700

Loan Tenure (Bottom 50%): 67 months

These figures provide insights into the MBA fees, average salaries, and loan tenures at the respective IITs, enabling prospective students to make informed decisions about their educational investment.

IIM MBA Fees and Graduates' Debt Burden

Considering all IIMs collectively and referring to the 2020-21 fee structure, the average debt carried by graduates, including the accrued interest, amounts to approximately Rs 17 lakh. For the bottom 50% earners among the placements, this translates to an estimated 94 months or 7.8 years of equated monthly installment (EMI) payments, with an average installment of Rs 26,548. It is important to note that these calculations assume a fixed salary and no partial repayments on the principal amount.

The average salary for the bottom 50% earners across all IIMs stands at Rs 15.97 lakh. Similarly, for the IITs, employing the same calculation methodology as for the IIMs, the average salary for the bottom 50% earners amounts to Rs 13.15 lakh. However, the maximum probable tenure for EMI payments among the bottom 50% earners graduating from IITs’ Department of Management Studies (DOMS) is 67 months, which is less than six years.

It should be noted that IIT Mandi was not included in this analysis.

These figures shed light on the debt burden faced by graduates from IIMs and IITs, providing valuable insights into the loan tenures and average salaries that graduates need to consider when making financial plans.