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The Path to Enhanced Funding. Privatization?. Current Business Model. The bulk of Faculty funding is derived from funding based on FTE enrolments in traditional degree programs (Core activities) Students are either “regulated” (funded by tuition and the MEQ) or “private” funded only by tuition.
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The Path to Enhanced Funding Privatization?
Current Business Model • The bulk of Faculty funding is derived from funding based on FTE enrolments in traditional degree programs (Core activities) • Students are either “regulated” (funded by tuition and the MEQ) or “private” funded only by tuition
“Non-traditional” revenue sources • Alumni Annual Fund • Executive Institute* • IMPM* • MBA Japan • MMM • MBA3 • Miscellaneous • CIMS Overhead • Overseas Programs • Other
Highlights of Current Funding Situation • Regulated Students ($Sent by MEQ) all domestic students in traditional degrees (e.g. BCom, MBA, Ph.D.) • University receives $10,419 for a regulated FTE Masters Student and $5,913 for an FTE undergraduate in Management • Faculty receives ~$7,200 for a regulated FTE Masters student and ~$4,100 for an FTE undergraduate
Highlights of Current Funding Situation (cont.) • Private Students: International students and students in private degrees (e.g. Master of Mgmt.) • University receives $20,000 for a privatized FTE MBA Student and $15,000 for an FTE undergraduate in Management • Faculty receives $8,520 for a private FTE MBA student and $6450 for an FTE undergraduate • “Clawback” is 57% (includes scholarships and capital grant of 11.25%)
Highlights of Current Funding Situation (cont.) • Mixed students (e.g. MBA3) • Students pay regulated tuition plus a service fee. • Regulated tuition is clawed back by the university at standard rate (~30%) • A service fee is collected which is not clawed back. • “Under the radar” from the point of view of the MEQ
McGill Issues re Privatization • Permitted in QC only for international students in Management and for private degrees • Full privatization of Faculty may be allowed (implementation entails financial risk) • “Under the radar” is tolerated • Access to university education is a perennial political issue in QC • McGill has been audited by the MEQ when it privatized international students in all Faculties • Recent Le Devoir article targeted McGill
Relevant Experiences Elsewhere • Ontario professional schools allowed to raise tuition and maintain base govt. funding (“double dipping”) • BC MBA raised tuition to $28,000 and was faced with a lawsuit by students • Law students in Manitoba voted by referendum to raise tuition • McGill law students may be asked to sign a “social contract” to give up to 5% of their income to the school for several years
Needs for Privatization • Need enhanced facilities • Need enhanced teaching –outstanding across the board • Need enhanced service • Facilities require investment • Service and teaching enhancement implies investment and has a learning curve
Some Options (non-exclusive) • Continue as is + cut costs • Increase revenue through non-core activities • Increase enrolment in core programs • Expand core activities with a service fee like MBA3 (“under the radar”) – e.g. MBA service fee for all by referendum • Expand offering of private degree programs which offer Master of Management (like MMM or IMPM or MMFS)
Some Options (cont.) • Develop new private degrees like EMBA or BBA • Offer new programs overseas (like MBA Japan) • Target full privatization and then unilaterally declare Faculty private • Negotiate with MEQ for a step by step privatization process of the Faculty • Establish accredited degrees in another province/state/country and offer them in Montreal or elsewhere