Pay After Placement, as the name suggests, is a mechanism of payment where the student pays the tuition fee after getting placed. Let's understand this concept in detail.
Masters of Business Administration (MBA) is one of the most popular courses for people who want to explore more options in their career and gain better professional skills. For employees who have been working for years and find themselves stuck in their careers or even fresh graduates who want to enter the professional sphere with more knowledge and skills, MBA is the ultimate answer.
Other than career advancement, this degree helps in gaining managerial skills, strategic thinking, building connections, exploring other industries, gaining experience from internships, and getting paid a higher salary.
Most of the B-schools in India provide MBA in the form of either a diploma or a degree in various sectors such as finance, marketing, human resources, business, health care, information technology, logistics, operations, rural management, etc. These specializations also change according to the particular B-school that one is applying to.
To get into any of the B-schools, there are competitive exams such as CAT, CMAT, XAT, SNAP, NMAT, and others specific to the school. It should be noted that throughout all the B-schools in India, there are more than 40 applications for one seat. One-third of these MBA applicants are freshers in the age group of 22 to 25, meaning that this bracket has not had nearly any type of savings before.
The average tuition fee of an MBA degree is between ₹6 lakh to ₹12 lakh, and for top B-schools, this can go up to ₹15-20 lakhs. These fees usually may not even include hostel, mess, and other academic-related fees. Not all students are able to afford such high fees, and taking money from family is also difficult because of such a large amount. Thus, many opt for loans, and although banks provide education loans, this becomes an added burden on applicants who want to take a new path in their careers. For applicants belonging to tier 2 or 3 cities and remote towns, getting loans for such high amounts is troublesome for families. Due to this, many of the applicants drop out of the admission process and end up giving up on their dream of an MBA.
Placements in MBA
Most of the applicants have a similar thought process of being able to pay off their loans after getting a good job through the placement program in various B-schools. But it is possible to pay off their loans in a given amount of time, only when the job offer they receive has a good package.
If the package is large enough, loans can be paid off within two years of completing the degree. If the student is unable to get placed, the onus of placement falls completely on the student’s shoulder alone. Looking for a job on your own is a much difficult task, whereas, within a placement program, the college does most of the work of finding potential employers.
For an applicant who is not sure whether they will get placed after two years, paying the fees for B-schools becomes a huge gamble. Even in some of the top B-schools, not everyone gets placed, and they have to fend for themselves. And when it comes to other B-schools in towns and tier 2 or 3 cities, getting placement through a college becomes difficult for many.
The question then arises, if taking up a huge loan without surety of the outcome is not a favourable option for many, what are the other options in this field?
Pay after placement
Now, what if there is an assured method in which the student was not in this alone? What if, instead of borrowing money either from the bank or family before the course begins, the student simply paid once they are sure of the outcome, in this case, a placement? What if the B-school took accountability for education from day one?
Such is the case with the unique Pay After Placement model that assists students and families who are unable to navigate the job market alone. Pay After Placement, as the name suggests, is a mechanism of payment where the student pays the tuition fee after getting placed, i.e., on completion of the course and after getting placed. In such a payment plan, a successful career is the responsibility of both the B-school and the student.
In some PAP (Pay after placement) models, the program fee is related to the monthly salary of the placed student, in which case the accountability is shared not just for the placement but the quality of placement as well. In other words, such models protect one from paying a fixed amount of fee that is independent of the quality of teaching and placement - as would happen in a traditional program structure. This model completely takes off the burden of a student by providing a form of guarantee where the student will surely be placed well.
As the PAP model makes the B-school accountable, it pushes them to invest in resources to help the student maintain strong corporate connections and get placed with top companies and industry recruiters. The student becomes financially independent as this helps them confidently bear the cost of their education without creating undue pressure on their families. Thus, this model helps the student reap all the benefits of attending a B-school.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house