MBA Fee Increase

The Board of Trustees for the CSU system is considering a $210 per credit hour fee for MBA programs. If the Board approves the fee increase, the cost to receive an MBA at any of the CSU campuses will nearly double.

The Associated Students of Sonoma State University passed a resolution at its January 30th, 2008 meeting. The resolution requests two things. First, that the Board of Trustees carefully evaluate how implementing a precedent setting, per credit fee will affect future student fee decisions for other programs. Secondly, the resolution asks that the Board of trustees reject the proposal for a $210/credit hour fee. Though the student senate understands the importance of adequately funding programs, we are concerned that doubling the cost to students all at once might turn away prospective students.

The Staff Report to the Task Force on Student Fees for Professional Business Graduate Programs clearly demonstrates that the Departments of Business in the CSU are inadequately funded and without additional resources several campuses could lose AACSB accreditation. The Report also demonstrates that even after the implementation of the fee increase, the CSU will still offer one of the most affordable MBAs in the country. Arguments in favor of increasing these student fees also include the fact the MBA candidates are likely to be some of the highest earners after they graduate. Many MBA students have their tuition paid, in full or in part, by employers suggesting that this subset of students are able to pay more.

However, there are many concerns, not only about raising student fees, but also about implementing a per-credit fee. Currently tuition is charged at one rate for part time students and another for full time. A per credit fee is assessed by multiplying the fee by the exact number of credit hours enrolled. This would be the first per-credit hour fee in the system. Furthermore, the CSU was founded in order to provide access to higher education to those with special difficulties, including financial difficulties.

My position is that the need for additional resources to Business programs is urgent. If campuses were to lose their accreditation, it would be harder to attract and retain qualified faculty as well as students. This could be fatal to these programs. I believe that the Board of Trustees is sniffing around in the right place looking to charge these students more for what is generally a high earning degree. I believe that further evaluation is required. Much of the rationale in the Report is based on findings from graduate business programs from universities outside of the CSU. Though the findings are favorable to a fee increase, the increases considered in the research are under 10%, a far cry from the proposed 100% increase for programs in the CSU.

Another concern I have about the proposed fee is that it is a blanket fee which would apply to all campuses. While this may be a very successful increase in large MBA programs in the CSU, it could be damaging or fatal to a small program like the one at Sonoma State if even just a handful of prospective students decide the increased cost is not worth it.

Since the benefit to students of receiving an MBA are part of the rationale for increasing the fee, we must consider the nature of the benefit to students. MBAs command a higher value at market than most degrees. This is the result of firms being willing to pay more for new hires who hold an MBA. One theory is that by raising fees for students in the MBAS program, these programs will be strengthened. The result would be CSU graduates who are more prepared and competitive in industry thereby able to command higher starting salaries. These higher starting salaries, however, would be realized slowly over time. I believe, then, that the increased cost to students should be implemented gradually over time. It seems unreasonable to double the cost to the first few generations of MBA candidates so that graduates years from now may receive a higher starting salary.

The Associated Students will consider a second resolution regarding the proposed MBA fee increase. It is the hope of the student senate to provide the Board of Trustees not only with a statement of disapproval for the proposed fee increase, but also a proposal for a fee structure that provides the departments with the needed funding in a way that works for students as well.

We are seeking input on the issue. What sort of fee increase could bring in additional funding for the Schools of Business that reflects the benefits students receive for an MBA? Is a per credit hour fee appropriate to the CSU system?

Jonathan T. White