By Jessica Brown, Senior Manager, Knowledge Services, AACSB International
Recently, AACSB International has received a variety of questions related to how the economic issues of the past few years have affected business school budgets and endowments. Specifically, has AACSB seen variations in financial impacts at public and private schools by type or scale? To examine this question, a controlled set of schools that participated in the last five annual AACSB Business School Questionnaires (BSQ) were examined. The results below show the averages reported.
Figure 1. Endowments
In figure 1 above, the average endowment market value rose from 2007–2008 to 2008–2009, however, the financial hardships of 2008 and 2009 had a definite downward effect on endowments. As endowment funds are generally invested rather than provided in static amounts, the fluctuations of the stock market and the restructuring of a number of investment opportunities made an immediate impact. For example, private schools that generally rely more on endowments for ongoing funding than public schools, declined from 2008–2009's average (61.2 million USD) to 2009–2010's average (49.7 million USD) for a single consistent set of schools, which illustrates just how important the overall health of the economy is to educational institutions.
Figure 2. Operating Budgets
While the average endowments reported showed a clear impact from the economic situation, average operating budgets have not. Instead, operating budgets have continued to increase each year, potentially leading to increased financial and resource needs and a decrease in available funds from endowments at some schools. This increase is consistent at both the public and private schools examined.
Figure 3. Tuition—MBA Full Program, In-State
Though it seems to be occurring more slowly, as with operating budgets, average tuition has also continued to increase. As both public and private business schools have been faced with the need to review and potentially change the balance of their sources of operating funds, tuition has been an area of definite interest. This can become difficult as students are often on limited budgets, but schools must find a way to provide them with the highest quality education possible.
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