Should business schools depend on student equity?


Check out this interesting article on business schools in the Huffington Post.

http://www.huffingtonpost.com/pablo-triana/apply-debt-for-equity-to_b_231597.html

This recent article by Pablo Triana on the Huffington Post proposes an interesting plan for business school students and their financial burdens. Triana suggests that b-schools offer free tuition (and possibly room and board) for an equitable stake in each student’s future salary. Each graduate would kick back a certain percentage of their earnings for a period of time to the business school. The crux of the idea is that students would be able to avoid the trappings of student debt while b-schools would be forced to become learner and meaner.

Triana’s argument is extremely intriguing, given the current environment surrounding both the market and b-schools. The financial crisis has brought MBAs and their contribution to companies into focus. Graduates, students, and prospective students now face intense scrutiny as many people have begun to take aim at MBAs for perceived slights in the market.

Triana’s proposal has interesting ramifications for both sides of this argument. Let’s be frank. MBA graduates have some of the highest starting salaries of any discipline. Money is a central part of both the education and the incentive of b-school. Would a change of this sort really affect the way in which b-schools operate?

Let’s consider the affirmative. Schools would be relying on the financial success of their students to remain fiscally solvent. At that point, how are business schools different from management training programs? While few people would extol the virtuous lessons taught in business school, there would certainly seem to be an ethical bright-line between a self-sufficient school and an institution that is forced to push students toward the most profitable endeavors. Furthermore, the current crisis has lead to numerous critics to call for a greater infusion of ethics education in b-school. It would be hard to envision this happening at an institution that is forced to view their students as commodities.

On the other hand, it would be naive to not consider the fiscal challenges facing today’s b-schools. The best schools heavily rely on graduate success (aka making money) to consistently attract high-level students and higher tuition. Student success is already deeply tied to school success. Thus why not allow students the opportunity to avoid the trappings of loans and debt and put the onus on school s to create self-sustaining programs?

These are just a couple concepts to consider about a proposition that has numerous angles. Please let us know what you think in the comments section.

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