Call for disclosure of MBA tuition pricing

The education administration should require public universities to disclose financial information and clarify pricing standards of their Master of Business Administration program, allowing students to make rational choices, says an article of the Beijing News. Excerpt:

After the Communist Party of China disciplinary committee banned government officials from paying for expensive Executive MBA programs at business schools with government money, some universities greatly reduced MBA program tuition fees. The lowest fee of the 20 universities in Beijing is about 50,000 yuan ($8,300) and the highest nearly 400,000 yuan.

Several years ago, the education authority granted pricing rights to universities and tuition fees rose markedly. Universities explained that they used the money to hire better teachers. Some responded to questions about expensive tuition by saying that an MBA is a commodity and pricing should follow the laws of a market economy.

China implements a state diploma-awarding system, including the MBA, so the state should have a say over the pricing rights of MBA, especially for public schools, some of which are “selling” MBA degrees. A diploma recognized by the state becomes a lucrative selling point for such schools.

There is no market competition among public schools. Students cannot apply for an MBA program in different universities at the same time and cannot apply for a transfer to another university once they are admitted.

MBA education falls in the middle ground between public school education and commercial business. Universities have legally-binding duties to disclose financial information, including that of their MBA programs.

China should reform its state diploma-awarding system, which makes public universities a kind of monopoly. Reforms would give universities and students more freedom of operation and choice.