36 Rice (Jones) Private $98,806 $ 99,506
29 SMU (Cox) Private $93,360 $ 87,694
46 TCU (Neeley) Private $76,400 $ 81,331
Average of Ranked Texas Programs (excluding A&M) $83,965 $93,411
Note that Mays is the lowest priced of the five ranked Texas programs. In fact, we are less than half the cost of UT-Austin and less than a third of the cost of Rice. But we also compete nationally and internationally for our students. It is routine for students to use the latest rankings to guide their school search. The next list shows the costs for all public schools that ranked higher than Mays, in the Bloomberg BusinessWeek ranking released November 2012.
Bloomberg BusinessWeek
Rank
Nov. 2012 University (School) Type
AY 2013 Program Cost Class of 2012 Average Starting Salary Other Public Programs that ranked higher than Mays
8 Michigan (Ross) Public $100,389 $111,047
10 Virginia (Darden) Public $ 95,900 $109,335
13 UC Berkeley (Haas) Public $107,456 $116,045
15 IU Bloomington (Kelley) Public $ 53,124 $ 97,489
17 UNC (Kenan-Flagler) Public $ 66,061 $102,170
18 UCLA (Anderson) Public $ 96,486 $105,556
22 Georgia Tech (Scheller) Public $ 55,328 $ 92,138
24 Maryland (Smith) Public $ 80,316 $ 92,938
26 Texas A&M (Mays) Public $31,062 $ 93,511 Average of Top Public Programs (excluding A&M) $ 81,883 $103,340
Again, we come in as the low-cost provider: the national average of $82,000 is nearly three times the cost of a Mays MBA. While this would strike many as a bargain, it could strike others as a sign that the quality of a Mays’ MBA is lower than a degree from other top-ranked schools. While we know that nothing could be further from the truth, prospective students associate a premium price with a premium product. Mays’
recruiting and admissions staff routinely face the question, “Why is A&M so cheap?” This misperception will only be reinforced if we fall further behind other top-ranked business schools.
Rationale #3: Mays’ MBA students easily recoup their investment.
Another fact to consider is that most MBA students have the financial wherewithal to handle the program costs – the typical student leaves a well-paying, professional position to come to Mays. The most recently admitted class (Class of 2014), for example, had an average of five years of work experience.
In addition, Mays students earn very high salaries after graduation. The two tables above summarize the starting salaries for the most recent graduates at our Texas competitors and among the set of highly ranked public schools. The average Mays 2012 MBA graduate landed a salary of $93,000 and a signing bonus of $16,000 (not included in the salary statistics in the tables above). At that rate, the student’s investment is quickly recouped.
The incredible return on investment of a Mays MBA is a fact not lost on the rankings agencies. Here are some recent accolades:
2nd U.S. overall, Salary Percentage Increase, Financial Times (2012)
2nd U.S. public (7th overall), Employment at Three Months, Financial Times (2012)
4th U.S. public (11th overall), Placement after Three Months, U.S. News & World Report (2013) 13th U.S. overall Best MBA Job Placement, Bloomberg Businessweek (2012)
28th U.S. overall Top B-Schools with the Highest-Paid MBAs, Bloomberg Businessweek (2012)
MBA students are sophisticated consumers of higher education and recognizing the return on investment, they are willing to pay for our program given its high rankings, strong career services, and outstanding placement record. Even with the proposed fee increase, and assuming our competitors do not raise their tuition and fees at all, we will remain the most affordable highly ranked MBA program in the country.
Use of Additional Revenues
New economics faculty. Historically, the Mays Business School department of Management included a number of economists who engaged in business-related research. For strategic reasons, we are no longer recruiting mainstream economists for research positions. The school currently has only three remaining economists, one of whom has taught all the economics classes in the MBA program for many years. As the department transitions, and faculty plan to retire, the economics group will disband. Thus, the MBA program will need to find alternative staffing solutions for the economics curriculum.
We plan to use the new fees to fund a clinical position and to pay for fringe and ancillary faculty costs (professional development, operating costs, etc.). Every MBA program in the country includes at least one, and often two, core economics classes. It is not possible for us to drop economics from our course offerings. This represents a critical need.
Recruiting former military personnel. Across the country, full-time MBA enrollments are dropping. Thus, schools are competing for fewer and fewer students each year. In order for us to maintain MBA enrollment, we have taken the strategic decision to increase efforts to recruit former military personnel. With recent and continuing troop drawdowns, there are many servicemen and women looking for educational opportunities. We believe that this represents a potentially untapped market and one that fits well with the Aggie traditions and culture.
With federal funding available for graduate education, the market for highly qualified candidates is becoming fiercely competitive. To be successful in attracting the very best, we need to engage in additional recruiting and marketing efforts. These added costs include travel, military-specific marketing collateral, development of a handbook for veteran-students, and developing a Military-prospect weekend similar to the Diversity and Women’s weekends we currently host. We will use the additional fees to defray these recruiting costs. (Note that current veteran education funding makes our military students largely immune to fee increases.)
II. Public hearing and/or student referendum requirements
The Associate Dean for Graduate Programs of Mays Business School presented the proposal and solicited input from students through the MBA Program Student Advisory Board. We propose that the fee increase be effective Fall 2013 and be applied only to new students joining the program in Fall 2013 and after. Current students would be exempt from the fee increase. The total cost of the program (tuition and fees) is communicated to prospective students through the MBA program’s website and the Texas A&M University website. MBA program costs for the Mays MBA and other nationally competitive programs are widely publicized in national and international outlets that rank MBA programs and related websites.
III. Budget impact if fee request is not approved
The MBA program will not be able to compete effectively with leading programs and improve its national prominence without the fee increase.
IV. Justification for ending balance
No significant ending balance is anticipated, other than a moderate operating reserve. Our year-end GL balance (#021910) has historically been low when compared to our operating budget. We had a moderate operating reserve of $55,000 in FY 2012.
V. Additional Information
Revenue Generation
The increased fee would only apply to the MBA Class of 2015, entering the program in fall 2013. Based on expected enrollments in the MBA program during FY2013, the estimated annual revenue generated from the proposed fee increase would be $140,000 per year:
MBA Class of 2015
Anticipated
Enrollment Fee Increase
Additional Revenue
Fall 2013 70 $1,000 $70,000
Spring 2014 70 $1,000 $70,000
Request for Increased Student Fee TEXAS A&M UNIVERSITY MBA Program Fee - Mays Business School Current Fee: $5,424.00 for Fall and Spring
$0.00 for Summer Proposed Fee: $6,424.00 for Fall and Spring
$0.00 for Summer
Basis: sem (sch, sem, student, etc.)
Number of Students Affected: 70 (incoming students - current students are Current Semester Credit Hours: are grandfathered in)
Projected Semester Credit Hours:
FY 2014 FY 2014
Budget Proposed
FY 2013 Without Increase FY 2014
Budget Fee Increase (Decrease) Budget
BEGINNING BALANCE - Actual 55,000
Estimated 70,500 70,500
Revenues
Fees 877,400 877,400 140,000 1,017,400
Total Revenues 877,400 877,400 140,000 1,017,400
Expenses
Salaries & Wages 524,865 524,865 120,000 644,865
Fringe Benefits 142,543 142,543 33,600 176,143
Departmental Operations 194,492 194,492 51,500 245,992
Marketing collateral 0 0 10,500 10,500
Total Expenses 861,900 861,900 215,600 1,077,500
Increase/Decrease in Balance
Revenues less Expenses 15,500 15,500 (75,600) (60,100)
Request for New Student Fee TEXAS A&M UNIVERSITY Master of Industrial Distribution Program Fee
I. Programmatic justification and proposed use of the new fee
Background: The Master of Industrial Distribution (MID) is a distance based graduate degree in the Dwight Look College of Engineering designed for working professionals in industrial distribution and manufacturing channels. The program has been in existence for the past 12 years and prepares working professionals for management and leadership positions to manage global challenges. The MID program has seen steady growth over the last 5 years and demand for such an education is growing outside North America.
As a professional program, all aspects of the program activities are organized, supported and paid for by the program. As our students are professionals with full time job and family, we provide all the logistics and support for their education. Currently the ‘MID Field Trip Fee’ is used to pay for the following four key expenses of the program. The MID Field Trip was established over 10 years ago as a means to pay for the Global Distribution international trip (item 3 below). Since then the services of the program have expanded to encompass other services as listed below.
(1) All books and course materials.
(2) Residency week hotel accommodations, all meals, transportation for two years.
(3) One week ‘Global Distribution’ international trip accommodations, most meals and transportation. (4) Capstone project presentation & graduation events accommodations, transportation and meals.
MID Program Fee: The Master of Industrial Distribution Program (MID) program is requesting a ‘MID Program Fee’ of $1,800/Course to begin in AY 2014. This new ‘MID Program Fee’ will replace the current ‘Field Trip Fee’ of $1,326/Course. This fee will be used to pay for the following expenses:
(1) Program Materials: All books, case studies, and printed materials.
(2) Residency Week: Two mandatory residency weeks during this two-year distance education program in College Station, TX during August of each year. The program covers the hotel accommodations, all meals, transportation during the student’s time in College Station.
(3) Global Distribution Program: Weeklong (7 to 8 days) “Global Distribution” course trip to Asia,
Europe or South America during Fall semester of each year. In 2012, the class went to Brazil. In 2013, the class will be traveling to Sweden and Norway. In 2014, the class is planned for India. The program covers the international trip accommodations, most meals and in-country transportation.
(4) Capstone Project & Graduation: Final capstone project presentation and Graduation during May of each year. The program covers the events accommodations, transportation, meals and graduation cap & gown. (5) Program Specialist: One full time staff to support the planning, logistics and execution of the above program activities. The staff also will act as the student customer service support which includes registering for classes, shipping materials, coordinating and assisting the student’s travel.
Justification:This fee is utilized to cover all direct expenses associated with the five program expenses listed above. As a self-funded graduate program focused on working professionals, we might not be able to provide the above services and support without this program fee. The proposed ‘MID Program Fee’ will help us to pay for and maintain the services that are hallmarks of this professional degree.
This program fee does NOT pay for the teaching faculty. Differential tuition is used to pay for faculty salaries.
II. Public hearing and/or student referendum requirements
We propose that the ‘MID Program Fee’ be assessed for Fall 2013. The proposed program fee will be presented to current students for their input according with University and System regulation. For students currently enrolled in Year 1, a scholarship will be provided equivalent to the net increase in fees. The net increase for current students will be $474/Course. The proposed fee and total cost of the program will clearly be provided in writing to students applying for Fall 2013.
III. Budget impact if fee request is not approved
The MID program will not be able to sustain its position as a leader in a professional program tailored for professionals in the industrial channels without the ability to provide complete services as outlined above. There is no other source of funding for these expenses.
IV. Justification for ending balance
No significant ending balance is anticipated.
V. Additional information
The difference between the current ‘Field Trip Fee’ and proposed ‘MID Program Fee’ will be $474/Course. The total increase for the 21 month program is $4,740. The following are justification for the additional fees:
Increased transportation cost in Global trip. During the past 5 years as the program grew, we have to hire two busses instead of one bus.
Increased number of hotel stays during capstone project presentation events. This year, due to 38 students, the capstone project presentations will run for 3 days instead of 1 day. This is an additional two nights of hotel rooms for all.
Increased student support services and expanded logistics planning for a larger group of students.
Cost comparison of professional programs in Texas is provided below. Even with the proposed MID Program Fee, the Master of Industrial Distribution will be the about 50% less than all of the programs.
Degree Program Current Total Cost 2012-13 Total Cost 2013-14 including the proposed Program Fees
Master of Industrial Distribution at Texas A&M Instate : $39,314 Out-of-State: $50,742 International: $50,928 Instate : $44,054 Out-of-State: $55,482 International: $55,668
Comparable Professional Degrees
Southern Methodist University Executive MBA $103,315 Rice University MBA for Professionals $ 92,500 University of Texas at Austin Evening MBA $ 92,400 University of Texas at Austin MBA at Houston $ 90,300 University of Texas at Austin MBA at Dallas/Fort Worth $ 85,050 Texas A&M University Executive MBA $ 79,500
Note: None of the above MBA programs include accommodations or global travel expenses. Some of them provide limited meals during meeting days.
Request for New Student Fee TEXAS A&M UNIVERSITY
Master of Industrial Distribution Program Fee Proposed Fee: $474.00 for Fall and Spring
$0.00 for Summer
Basis: course (sch, sem, student, etc.)
Number of Students Affected: 35
Projected Student Enrollment: 35-Fall/35-Spring Projected Semester Credit Hours: N/A
FY 2014 Budget BEGINNING BALANCE 0 Revenues Fees 165,900 Total Revenues 165,900 Expenses
Salaries & Wages 48,000
Departmental Operations 117,900
Total Expenses 165,900
Increase/Decrease in Balance (Revenues less Expenses) 0
Request for Increased Student Fee TEXAS A&M UNIVERSITY MS Program Fee – Mays Business School
I. Programmatic justification and proposed use of the increased fee Executive Overview
Mays Business School proposes an increase in the Mays MS Program Fee (Master of Science). The primary goal is to provide a revenue stream that allows Mays to grow its MS programs by increasing enrollment capacity and boosting recruiting efforts to add more students. The resulting growth and increased enrollment will provide more revenue for Mays and will also increase state formula funding and tuition for the university. To that end, the incremental fees will be used to, 1) expand marketing and recruiting efforts in order to attract an additional 80 students over the next three years, and 2) to hire new faculty members to teach additional sections of existing MS courses and to develop and deliver new MS content.
The amount of the proposed fee increase, to be assessed on a semester basis, is as follows:
Fall Spring Summer
MS Program Fee $1,000 $1,000 $0
Because of internships, more than half of our MS students do not enroll in summer. Therefore, we charge a very small fee ($200) during summer term and do not seek to increase it. We propose that the fee increase be assessed only on new students entering the MS programs beginning in Fall 2013 and thereafter. There will be no increase in fees for any current MS students.
Rationale for increased MS fees
Rationale #1: Mays’ MS enrollments must increase to meet growth targets.
Mays Business School has six MS programs in six functional business areas. Until now, we have primarily recruited A&M undergraduates for these programs. However, to meet our growth targets, we must attract and matriculate a broader cross-section of students. This will require additional personnel, effort, and cost.
We cannot simply increase enrollment by increasing class size because many of our MS courses are taught in computer labs that accommodate only 36 people. This physical-space constraint necessitates adding new sections of existing courses if we seek to increase enrollment. This will require a significant increase in faculty and operating costs.
Our goal is to add 80 master’s students (excluding MBA students) over the next three academic years. This represents a 30% increase in the size of the incoming MS class. We cannot do this without a significant step-up in program costs. Thus, absent this additional fee, we will not have the required funding to grow our MS programs.
Rationale #2: Mays’ MS programs are below market cost.
Our MS degree is significantly below the cost of equivalent degrees at competitor schools. As the table below indicates, Mays is the least costly of the five major business schools in Texas (the Jones School at Rice does not offer MS programs in business). Moreover, our proposed fee increase would move us ahead of only UT Dallas in cost. Compared to other public and private schools with whom we compete for students, our tuition and fees are significantly lower.
University (School) Type
AY 2013 Progr am Cost*
Texas A&M (Mays) Public $29,914
Competitor schools in Texas:
University of Texas Dallas (Jindal) Public $30,194 Texas Christian University (Neeley) Private $37,550 Southern Methodist University (Cox) Private $40,216 University of Texas Austin (McCombs) Public $48,000
Other ranked competitors:
University of Georgia (Tull) Public $37,575
Indiana University (Kelley) Public $39,600
Michigan State University (Broad) Public $42,270 Notre Dame University (Mendoza) Private $42,750 University of Southern California (Marshall) Private $43,722 University of Michigan (Ross) Public $55,194
* Simple average across each school’s business MS programs.
The significant under pricing of a Mays MS degree has not gone unnoticed. The report from our recent AACSB accreditation review included the following specific reference to the price of Mays’ MS programs:
“The Budget Model does not work well. There is little if any flexibility on tuition which has led to
remarkably underpriced MS programs. In addition, the inability to use Fees to compensate instructors makes faculty acquisition and retention much more difficult than it need be.”
We cannot stress enough that our underpriced MS degrees inhibit the growth of our graduate programs and this has long-term consequences for Mays Business School.
Rationale #3: Mays’ MS fees can now be used to pay faculty salaries.
Until recently, our MS program fees were charged under Texas statute 54.504 – Incidental Fees, which precluded fees from being used to pay for faculty salaries. Consequently, our MS programs have been hamstrung for lack of funds to hire new faculty. Now, with our MS program fees being charged under Texas statute 55.16, this restriction no longer applies. This removes a significant constraint on our MS programs’ growth.
Going forward, with MS fees available to hire additional faculty, we will be able to increase our programs without the negative impact of larger class sizes. We anticipate that this will increase MS enrollment by a projected 80 students which will add to A&M’s revenue (at mostly out-of-state rates), beginning in Fall of 2013.
Rationale #4: Mays’ MS students enjoy excellent employment opportunities after graduation.
Mays MS students enjoy excellent job prospects upon graduation. For the class of 2012, 80% had full-time jobs at graduation and 96% had full-time positions within 90 days of graduating.
As the table below shows, starting salaries for the Mays MS class of 2012 were very healthy. In