The Indian Institutes of Management (IIMs) are significant management education and research institutions of our country, having national and international recognition for their academic rigor, large and diverse alumni base, and excellent placement records. One noticeable constraint the candidates face pre-admission is understanding the nuances related to the financial aspect of pursuing an MBA. People believe that cost of MBA from IIM lies between 30 to 35 lakhs for the older IIMs. Let us try to understand factors like how correct is this number, how do we arrive at this number, is this the same across all IIMs and other aspects of the same. This in turn, will help you identify the best fit for you and understand the return on investment.
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Classification of IIMs – Old, New and Baby IIMs With Fees
Presently, we have 21 IIMs across the nation which are segregated in three generations. Let’s look at each one of them and the actual cost of MBA from IIM.
Old Generation IIMs – All of them started in pre-2000 era.
| College | Tuition Fees |
| IIM Ahmedabad | 26.10 Lakhs |
| IIM Bangalore | 26.20 Lakhs |
| IIM Calcutta | 27 Lakhs |
| IIM Lucknow | 20.75 Lakhs |
| IIM Kozhikode | 20.50 Lakhs |
| IIM Indore | 21.16 Lakhs |
| IIM Mumbai | 21 Lakh |
Also Read – IIM Fees for MBA 2 Years
New Generation IIMs – All of them started in 2006-11.
| College | Tuition Fees |
| IIM Shillong | 26.18 Lakhs |
| IIM Rohtak | 17.90 Lakhs |
| IIM Raipur | 18 Lakhs |
| IIM Ranchi | 17.50 Lakhs |
| IIM Kashipur | 17.30 Lakhs |
| IIM Trichy | 21 Lakhs |
| IIM Udaipur | 20.43 Lakhs |
Also Read – Top 10 IIM
Baby IIMs – All of them started in 2015-16.
| College | Tuition Fees |
| IIM Amritsar | 21 Lakhs |
| IIM Bodhgaya | 18 Lakhs |
| IIM Nagpur | 18.90 Lakhs |
| IIM Sirmaur | 17.50 Lakhs |
| IIM Sambalpur | 21 Lakhs |
| IIM Jammu | 20.73 Lakhs |
| IIM Vishakhapatnam | 21 Lakhs |
Also, note that all the IIMs function autonomously as they fall under the IIM Act and are declared as institutes of national importance.
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Additional Associated Cost of MBA From IIM
In addition to the MBA fees at IIM (tuition fees), other costs like hostel and mess charges, laptop and utility charges, student activities and clubs and living expenses form the major chunk of the expenditure on campus. This totals up to a figure of 4 to 5 lakhs. Most IIMs also provide foreign exchange programs amounting to 2 to 3 lakhs which is another factor which also needs to be looked at. These numbers in addition with the tuition fees makes the total cost exceed 30 lakhs for older IIMs. This is why the real cost of MBA from IIM is always appearing to be high.
Another critical factor overlooked by candidates is opportunity cost. For example, the candidate is in a job and earning a certain salary and then decides to quit the job and opt for an MBA. While taking his best option (an MBA, in this case), he has to forego his second-best option (here, job). The salary of two years which he would have earned had he stayed in the job is the opportunity cost or the money an individual loses over the next two years. To illustrate, suppose a candidate is currently employed and earns an annual salary of INR 10 lakhs.
Opting to leave this job for a two-year MBA, results in a direct financial sacrifice of INR 20 lakhs in gross earnings over that period – this is the opportunity cost. However, it is very essential to take into account that post-MBA, you would have a probable salary hike, more connections and altogether different exposure to the business world. Thus, the tangible and intangible benefits pave the path for an accelerated career progression.
Education loans, Scholarships and Financial aid
Now, that we have realized the total cost required to pursue MBA at premier B-schools, let us try to understand financing mechanisms possible for the same. Most of the public and private sector banks as well as certain financial institutions offer collateral-free education loans at attractive interest rates. The loan amount can range from 20 to 30 lakhs. Interest rate varies from 8 to 10 % and disbursement of the loan hardly takes any time.
Also, one can take a part of the fees as the loan or the whole fees. In a scenario, where someone has already paid upfront, they can get the money reimbursed and take the loan for the fee amount (including for the one they already paid). All these loans have a moratorium period during which no payback of the loan is required. There can be some concession for female or for candidates from economically weaker sections of the society.
Almost all IIMs offer a variety of scholarships – merit means, and need-based. This aids in lowering the financial burden on the candidates. Need-based scholarships and Family income-linked tuition fee waivers are available. For merit-based scholarship, Aditya Birla Scholarship and scholarships pertaining to performance in 1st and 2nd year of MBA are also there. Thus, it becomes obvious that there are multiple options available to finance your MBA with minimal emotional and physical hassle.
ROI of MBA from IIM
First things first, the hike in salary. Almost 30% of the batch at IIMs are freshers who get their first pay-check post MBA. The compensation they receive generally is more than the one offered at entry level market salaries. At the same time, most of the candidates with work experience also get a spike in their salaries compared to their pre-MBA salary. Next up, the brand value of an IIM opens newer avenues across domains like Consulting, Finance, General Management, Operations, IT & Analytics and Sales & Marketing. Also, the diverse, robust and large alumni base acts as a lifelong asset. Mentorships, referrals and partnerships become an integral component of post-MBA life. An MBA, in general can also facilitate domain switch for candidates which becomes easier with extensive alumni reach. The IIM ecosystem also offers consistent mentoring, guidance and collaboration throughout corporate life via alumni engagement platforms.
Fees Comparison Between IIMs and Private B-schools
In addition to IIMs, there are numerous other high quality private B-schools offering amazing and integrated academic experience, excellent brand and good placement records. These institutes are comparable to the top IIMs of the country and should be considered while preparing for your management exams. Hence, it is always better to look beyond cost of MBA from IIM while making a career choice.
| College | Fees | Average Package |
| ISB Hyderabad | 38 Lakhs | 34.20 LPA |
| XLRI Jamshedpur | 30 Lakhs | 28.07 LPA |
| SPJIMR Mumbai | 22 Lakhs | 33 LPA |
| MDI Gurgaon | 26 Lakhs | 27 LPA |
| SIBM Pune | 26 Lakhs | 28 LPA |
| NMIMS Mumbai | 27 Lakhs | 25.13 LPA |
Non-IIMs with low fees
Now that we have already understood about the cost and ROI pertaining to IIMs and compared them with private B-schools, let us also try to analyse the same with some institutions which have relatively lower fees. These institutions also provide top notch management education and research opportunities at affordable rates.
| College | Fees | Highest Package | Average Package |
| FMS Delhi | 2 Lakhs | 1.2 CPA | 34.20 LPA |
| TISS Mumbai | 2.4 Lakhs | 49 LPA | 27.22 LPA |
| IIT Delhi (DMS) | 11.1 Lakhs | 41 LPA | 25 LPA |
| IIT Bombay (SJMSOM) | 14 Lakhs | 72 LPA | 28.88 LPA |
| JBIMS Mumbai | 6 Lakhs | 35.45 LPA | 28 LPA |
| IIT Madras | 10 Lakhs | 29.65 LPA | 16.93 LPA |
| IIT Kanpur | 2.80 Lakhs | 24 LPA | 18.14 LPA |
| IIT Kharagpur | 9 Lakhs | 43.37 LPA | 22.12 LPA |
Key takeaways
Pursuing an MBA from IIM is a decision which needs to be thought of carefully from multiple perspectives and one must not limit it to the cost of MBA from IIM. There is no doubt that the complete journey of two years would demand a substantial amount. However, the returns – in terms of career growth and opportunities are immense making it an investment for longer term. As such, it becomes critical to have a holistic understanding of all the factors at play – do consider the financial input required but also take into consideration the B-school which aligns with your values, objectives and career growth.
So, final points to be kept in mind are –
- Long term returns – Look at things with a 10-year gain rather than a 2-year cost.
- Selecting the right B-school – Pick one which fits in correctly in your plans and offers good quality placement in the domain of your choice.
- Financing the loan, the right away – Pick a loan with a lower rate of interest and understand the repayment terms thoroughly.
- Networking holds the key – In the evolving business landscape, diverse and penetrative alumni base will be critical to ensure one gets opportunities in case they wish to switch domains, companies or job roles.
Doing an MBA is still worthwhile, it is just that the dynamics have a lot. Now, must adapt to the changing times quickly.
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