:: Shekhar Bhatia

Desi Harvard dreams

Shekhar Bhatia

July.17 : Friends in Delhi whose children have managed to get admission into decent colleges are generally in a good mood. They have reason to celebrate: the worst is behind them. However, the question you often hear is, why do we have to go through this suspense year after year? We have many new schools, so why not new colleges? Not money-raking institutions but affordable colleges where you can get a quality education.

India’s education minister Kabil Sibal knows what good education is all about. He did his Master’s from Harvard Law School. Mr Sibal wants to allow foreign direct investment in the higher education sector and invite foreign universities to set up institutions in the country. I sincerely hope he can pull it off.

I am in Cambridge, Massachusetts, the home of Harvard University and MIT, the mecca of learning and cutting-edge research, the birthplace of the global positioning system, the fax machine and the Bose sound system. Together, the two institutions have produced a hundred Nobel laureates.

It’s a scenic university town with a maze of interesting shops and restaurants where tourists like me love to hang out. I take a walk on the bike path, watch people kayaking in Charles River, and browse for books in the Coop (formally a student co-operative now managed by Barnes & Noble). I found all the five books on my list in the shop. The first time I visited the place in the early 80s, there used to be a nice music store from where I bought some long-playing records and cassettes. But music shops are slowly closing down, victims of technology.

The news from here, however, is not so upbeat. The world’s richest college has lost billions of dollars in the economic downturn.

Harvard University’s endowment is down 30 percent in one year — from $37 billion (one billion dollars is about Rs 4,800 crores) last year to about $25 billion — because its investments are not doing well and donations from alumni have fallen. The endowment takes care of about a third of the university’s expenses.

Harvard is not alone. The recession is taking its toll on many other universities that depend on endowments and alumni contributions: top-of-the line education institutions such as MIT, Princeton, Yale and Stanford have all reported declines ranging from 20 per cent to 30 per cent.

In June 2008, public and private colleges in the US had a combined endowment of approx $552 billion — that is double the size of India’s forex reserves. According to reports, an estimated $120 billion could have been wiped out due to the meltdown.

To give you an idea of what these numbers mean, in his Budget for 2009-10, finance minister Pranab Mukherjee has allocated Rs 2,113 crore for the 12 Indian Institutes of Technology, the 20 National Institutes of Technology and for setting up new IITs and NITs. That is half-a-billion dollars.

Harvard alone is down $12 billion in one year, which is why last week it cut 275 jobs. The number is just a fraction of the total staff and faculty strength of some 16,000, but the fear here is that it could be the beginning of something worse. Indeed, the situation is not as bad as in the corporate sector ("it’s not a tenth as bad", said a student) but yes, there is a feeling of uncertainty.

So this is the story of the world’s wealthiest college.

Now about the students: for full-paying students, a year’s education at Harvard costs around $48,000 (room and board included). That’s about Rs 24 lakh. They call it "the sticker price". And since you have to budget for four years, you need about $200,000 — that is, approximately Rs 1 crore.

Of course, Harvard has an extremely generous financial aid policy: It admitted just 7 per cent of its applicant pool last year — put it the other way, this means it rejected 93 out of every 100 applicants. But those who are in do not have to worry about money. Harvard will fully fund their education if their parents’ income is under $60,000 a year (about Rs 30 lakh).

The problem in the US, however, is that in these hard times, children of even high-income parents are seeking financial aid. And colleges, in turn, are looking for students from affluent families who can afford to pay. In a recent investigation into the race for college admissions, eminent journalist Tina Brown’s news website, The Daily Beast, quoted a senior college official in New York: "We always have the parents who want to buy us a Mercedes or pay our mortgages. Usually we’d laugh them off, but money is tight this year. I’m telling my staff: Send them directly to the development office".

Parents are as desperate as their admission-seeking teenage children. I read the story of a parent who was hell-bent on getting his daughter into an Ivy League college, and threatened to slash the tyres of the admission officer’s car.

The end result is that colleges in the US are left with very little money for international students such as those from India.

The story would be different if India had many more premier institutes for higher education. It is sad that even deserving students cannot get into the college of their choice in India or pursue the subject of their dreams.

This is why I firmly believe that Mr Sibal is on the right track. The Yash Pal Committee on reforms in higher education has recommended that only the best foreign universities should be allowed to enter the country. Its proposal to make India a top-class education hub makes eminent sense for many reasons: one, it will forever end the mid-summer nightmares of hundreds of thousands of parents and their school-leaving children; two, with more availability of seats — and choices — the number of students going abroad every year will automatically come down; and three, students from Southeast Asia, Europe and even the US, where the cost of a good education is prohibitive, might be tempted to consider India. Mr Sibal has promised foreign universities "more freedom if they charge lower fees" that reflect the lower cost of operating in India.

The question is, given the current financial status of American universities, how many will come forward to set up shop in India. And purely as an aside: you can re-create the Harvard model but how do you replicate the unique ambience of this beautiful town?

Shekhar Bhatia can be contacted at shekhar.bhatia@gmail.com