Two years ago, we told you why business school tuition fees were so high and why they were set to rise. But inflation could change that and lead to a much more pronounced increase in these entrance fees.
In the last two years, between the pandemic, the war in Ukraine and the economic crisis, some business schools have chosen to increase tuition fees, even for students who are already in their second year. This is especially the case with HEC Paris, which made this decision in July 2022. But will this movement be widespread in all business schools in 2023? That’s the question the Major-Prep team asked themselves.
Read also: The Major-Prépa 2022 tuition fee survey
Why are business school tuition fees so high?
The first thing to bear in mind is that the cost of a master’s degree in a business school, between teachers and infrastructure costs, is estimated at around 20,000 euros per student per year. At the university, this same training costs 10,000 euros. The only difference, in the second case, almost 95% of the training is supported by the State and therefore by the taxpayer. It should also be noted that French business schools have some of the cheapest tuition fees in the world.
A business school budget breaks down as follows: payroll (50% to 60%), technology implemented by business schools (8% to 10%), premises (5% to 10%), departments support, i.e. marketing, communication or recruitment (5% to 10%) and compensation related to scholarships or other expenses.
Read also: Corporate tuition fees: an inevitable increase
How to explain the skyrocketing tuition fees?
Before learning more about the impact of inflation on French commercial school tuition fees, it’s important to understand what’s driving the increase. If you haven’t read our article published a few years earlier, here’s a little reminder.
Several factors influence the tuition increase. The first is the fact that, while other higher education institutions benefit from state aid, the grants awarded to French business schools have decreased significantly in recent years.
The other phenomenon that explains the increase in tuition fees is obviously international competition. It is a virtuous circle (but vicious for the student portfolio): by recruiting the best (and therefore the most expensive) professor-researchers and attracting high-level students, the school is more visible internationally and attracts the best international teachers and students. We must also remain competitive on issues such as educational experience, technology made available to students, academic stays, even if it means deploying new factories abroad, services, etc.
Read also: emlyon business school will fund up to 100% of the fellows’ tuition fees
Inflation and business school lessons
Among the most important expenses of business schools are salaries and premises (rent, water, electricity, gas, etc.). These are two items of expenditure that have increased significantly in recent months. When remuneration was revised upwards to keep pace with inflation, the cost of expenses doubled, even tripled for some establishments.
So will inflation cause business schools to raise tuition fees? Unfortunately, the answer is yes. Indeed, the business environment is confronted with the ambitions of business schools, which do not push down the amount of access fees. For the latest issue of Major n°13, the Major-Prépa magazine which you can consult below, journalist Stéphanie Ouezman interviewed school principals or managers of the Grande École Program, the training course for French business schools. Overall, tuition fees will increase by 6% to 7% for some institutions.
BSB, for its part, talks about indexing tuition fees to inflation or thinking of a mechanism that allows these fees to be modulated upwards or downwards. ESSEC evokes an increase of 6.5%, while some of the business schools rather speak of an increase of around 2%, which remains well below the inflation recorded in 2022 at 5.2%.
However, these numbers need to be put into context. While some institutions are talking about motivated increases in tuition fees, these have been part of generalized increases for several years. According to the Major-Prépa tuition survey, the cost of training at NEOMA increased by almost 30% between 2018 and 2022. This is also the case for ESSEC.
It should be noted, however, that the year 2023 will also be characterized by a significant increase in the cost of energy for these entities. It could therefore be that the planned increases will finally be revised in 2023, or even 2024.