The difference alumni can make

India should study the U.S. experience to foster alumni participation and corporate support, and lower the cost of higher education and make it relevant

December 31, 2015 12:54 am | Updated March 24, 2016 12:51 pm IST

"Capital campaigns from universities raise large amount of funds to support scholarship, faculty research, buildings, and so on.” Picture shows Harvard alumni.

"Capital campaigns from universities raise large amount of funds to support scholarship, faculty research, buildings, and so on.” Picture shows Harvard alumni.

Back in the late 1990s, responding to a call from my alma mater, the University of Arizona, I reluctantly made a $100 gift to the university. To my surprise, the dean of the business school left a voice message the next day thanking me, saying my gift quadrupled with corporate matching. He suggested that the gift be used to support students and improve the quality of education. That reluctant relationship blossomed — every year after that, I created a small endowment at the University of Arizona to support a needy student.

There are two important issues in the above example: alumni engagement and corporate support in higher education, both important for Indian colleges going forward. They can lower the cost of education and fundamentally transform the educational experience for students.

Let us look at the cost side. The cost of attending higher education institutions in India is moving in the direction of the U.S. universities. Despite public outcry, tuition fees in most U.S. universities continue to increase each year. Among the state universities, one of the reasons for this is the declining government funding as a percentage of the university budgets. At my university, the state of Texas funded 85 per cent of all educational costs in 1970. Today, the state pays around 13 per cent.

The Indian government subsidised higher education in government institutions to the tune of 90 per cent in the 1990s, but has recently asked various institutions to become self-reliant. This is leading to dramatic increases in tuition fees at premier institutions and is expected to worsen. To offset this higher tuition fees, new educational loan programmes have been instituted through banks. These actions look a lot similar to those in the U.S.

Today, in the U.S., over 43 million students have borrowed a staggering $1.3 trillion. Since 2006, the total debt has increased 300 per cent. The availability of student loans has unintended consequences. Access to loans makes it easy for colleges to increase tuition fees since students do not have much of a choice. That is why loan availability correlates heavily with higher tuition fees.

Mitch Daniels, the president of Purdue University, argues that there are broader societal consequences. “Home buying, marriage, child-rearing and even moving out of the family house are all now commonly delayed because of student debt,” he says. He argues that potential innovators seek traditional pay cheques to pay off loans rather than to pursue entrepreneurial lifestyle.

Before the situation gets out of control, the government and various institutions need to explore ways to contain the cost of education and proactively engage alumni and corporations to avoid societal costs.

Alumni engagement

Most U.S. universities now focus on engaging alumni both to raise funds and to improve the educational experience for students.

At the University of Texas at Austin, the alumni association called Texas Exes gave $3.45 million in scholarship to 641 students in 2015-16. This does not include alumni support to individual colleges on campus. The U.S. universities nurture the culture of pride and loyalty to their institutions. Alumni are emotionally committed to the success of their alma mater. There are both intrinsic and extrinsic motivations and rewards in supporting universities.

We frequently hear of capital campaigns from numerous universities to raise large amount of funds to support scholarship, faculty research, buildings, and so on. These funds are required to attract bright students, and advance knowledge, innovation, and teaching. The University of Texas just raised $3.12 billion in its campaign. Other major capital campaigns include Harvard University at $6.5 billion, Stanford University at $6.2 billion, Cornell University at $4.75 billion, and Yale University at $3.9 billion. Indian colleges may have to think similarly to advance opportunities and knowledge.

We are beginning to see college rankings include alumni giving-rate as one of the factors. This is an indirect way to measure how institutions are engaging their alumni and leveraging successes of those students to enhance their own educational mission. Alumni bring context and practical relevance to what is being taught in the classroom. An incoming student is more likely to be influenced by a recent graduate than a professor on the relevance of topics to his or her career. Mid-career alumni can reinforce the aspects of schooling that impact their day-to-day life. Often they can relate to the students better than the faculty does.

Universities increasingly rely on industry projects or capstone classes to provide experiential learning. Often it is the alumni who help arrange projects for professors and assume a mentoring role.

Alumni are a great resource during the recruiting process. They are brand ambassadors and advocates for students. Colleges that have a deeper engagement with alumni also have an easier time placing their students. Engaging alumni early on will help students find internships, and firms can identify promising talent. Furthermore, alumni can help with mock interviews to prepare students to do well in the process of searching for jobs.

Corporate engagement

Corporate engagement not only brings financial resources, but also helps with recruitment efforts, change, and innovation in universities. The executives who represent corporations bring credibility and act as brand ambassadors. In the U.S., it is a matter of pride for executives to be part of universities and various programmes. Corporations have equal responsibility as, or even more than, the government in developing talent that benefits them and society. Corporations know their needs for talent and skills better than the government. Corporations must play a significant role in developing talent rather than just being consumers of the talent. They have to invest in the future.

Here’s a case in point. I proposed a Master’s programme in business analytics where there is significant shortage of talent in the U.S. A major retailer, whose chief financial officer is an alumnus of McCombs School of Business and a member of the McCombs Advisory Board, committed $3,00,000 as seed money to jumpstart this programme. We were quickly able to assemble ten companies from different industries with similar need for talent to support our initiative. Many of these companies sponsored capstone projects where students apply their learning to solving real problems and gain practical experience in how to communicate with executives. As faculty, we were able to understand the need for different skills and types of problems industry is trying to solve. Industry has opportunities to seek advanced knowledge from faculty research.

Corporations can engage in allowing their employees to teach specialised classes. We have senior managers from Google and Dell teaching in our programmes. They bring practical knowledge and academic rigour to students that supplement the learning process.

If universities and colleges in India need to prepare students for the 21st century, they have to engage their alumni and corporations actively. This engagement is a partnership that benefits all stakeholders.

(Prabhudev Konana is Distinguished Teaching Professor and William H. Seay Centennial Professor of Information Management , Department of Information, Risk & Operations Management, McCombs School of Business, Austin, Texas.)

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