IITs, fee hikes, and higher education

Yesterday I was part of a small panel at IIT Madras to discuss “privatisation of higher education” in the context of fee hikes at IIT Madras. The students were exercised at being asked to pay higher fees (after revision, it is Rs 90,000 per year for B.Tech. courses), but told me that I can express my opinion freely and they wanted a free exchange of ideas. Which is what occurred. The other panelists were Prof. Venkatesh Athreya, economist and former HOD at Bharathidasan University (and an IITian himself), and Mr Jimraj Milton, lawyer.

To summarise things very briefly: I felt that the revised fees are a small fraction of the expected salaries for most IIT graduates, and taxpayer money should not be going to subsidise students at India’s most prestigious institutes who will go on to lucrative jobs afterwards. (For example, the highest salary at IIT Madras for a B.Tech. graduate in computer science and engineering in 2011-12 was Rs 68.5 lakhs, and the average was Rs 24.67 lakhs. It varies across disciplines, but the overall average is still Rs 10 lakhs/year for B.Tech. graduates [source]. The revised fees over four years are less than half of this average.) Like the other speakers, I pointed out that the larger scandal is the complete failure to assure reasonable-quality school education. Though coverage has increased in the last decade, quality has not. The planning commission, and the Kakodkar committee, both recommend a scholarship scheme to ensure that any candidate who is selected is financially able to attend the IITs, and the government promises that nobody will be debarred from the IITs for an inability to pay. If these promises are kept (and skepticism of government promises is warranted in this country), I see nothing wrong in the proposals. But even if not, for the more lucrative B.Tech. courses at IITs, getting a loan should not be hard and the student should be able to pay it off quite quickly after graduating.

Prof Athreya’s view was that there is no pressing reason to raise fees, since they cover only a part of the expenses at an IIT and the major part of funding will come from the government in any case. He observed that 65% of tax revenues come from indirect taxes, paid mainly by the working class and poor, and corporate taxes are effectively very low because of various exemptions that corporates are good at negotiating. He also observed that, because of globalisation, corporations who don’t get sweetheart tax deals simply threaten to move elsewhere, and governments around the world cave in to such threats. India’s budget deficit, he argued, should be tackled by improving tax collections from big business, not by asking IIT students to pay fees.

Mr Milton argued that privatisation, in general, was a form of exploiting the poor for the benefit of the rich, and gave several examples (such as electricity, private couriers, primary education) that did not really convince me. Besides, I did not quite see where “privatisation” came in to the picture for the IITs, and said so. I was told the Kakodkar committee argues for “radical privatisation”. I had a look later, and it does not. It quotes some feedback as suggesting “radical privatisation” as one of several options, but what it recommends is simply that IITs move towards raising their operating — i.e. non-plan — expenditure from non-government sources, while plan expenditure will come from the government as before. The topic of the panel discussion, therefore, was perhaps not really appropriate to the pressing issue in the minds of the audience.

Largely, my views remain unchanged, but one important point did come up: what about students who do not choose to do lucrative jobs after studying at IIT, but join the government or work for the social good? And, in particular, what of students who want to do higher studies, such as a master’s or Ph.D. degree, at modest Indian stipends? The return on their expenditure for the B.Tech. degree would be much lower, and if they took a loan, paying it back would be much more challenging. So it seems clear that, in such cases, the fees should be returned to the student (or perhaps fees can be charged at the point of exit, depending on what future career the student is taking up). Anyway, a solution to this point is in the IITs’ own interest, since they are finding it hard to recruit high-quality faculty, and with the expansion of higher education, it is essential to persuade some of the best undergraduate students to go on to higher studies and an academic career.

I wonder how other countries — the US in particular — deal with this. Student debt is beginning to approach crisis proportions in the US. Graduate and postdoc pay is barely enough to subsist on. How are students who have spent heavily on undergraduate education persuaded to continue for higher studies? Or is this one reason why graduate departments and faculty positions in the US are dominated by foreigners?

Finally, my major concern was — why aren’t our private universities better than they are? In an ideal world, a private institute such as BITS would have far exceeded the quality of the IITs by now, and students would be flocking there by preference, and we would not have this debate. But while private universities are mushrooming, the older ones like BITS are still not comparable to the IITs, and the newer ones are largely money-making institutions with mediocre teaching and negligible research output. Prof Athreya observed that private educational institutions should be motivated by philantrophy and not business considerations, and this is not happening [update: he clarifies that one cannot expect pure philantrophy and he has no problem with profit as a motive, but it should not be the only motive]. How can the government encourage it to happen? Or should we depend on the government for quality higher education for the foreseeable future, even as primary education is now dominated in the cities by expensive (and, often, equally profit-driven) private schools?