The privatization of California’s B-schools

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As California slashes billions from its higher education budget, the state’s premier public business schools have quietly focused its efforts on raising private dollars

In the past few years, billions of dollars have been slashed from California’s higher education budget. Some have warned that the cutbacks are impacting the quality of a state university system that has long been considered the crown jewel of public higher education.

What has been the impact on the state’s premier public business schools?

Surprisingly, there’s been little to no impact, according to the B-school deans. A year ago, faculty and staff endured a “furlough” that led to a one-time average pay cut of 8%. But the prestige and quality of the full-time MBA programs has been protected as state support of the schools has diminished.

What has occurred is a quiet privatization of business education. The B-schools have pushed through dramatic increases in MBA tuition and fees, stepped up efforts to increase endowments, and added more non-degree executive programs that produce “revenue surpluses” to offset the cuts.

“Basically, all of us have been phasing out our reliance on state funding for many years,” says Steven C. Currall, dean of UC-Davis’ Graduate School of Management. But Currall winces at the notion that he and his fellow deans have “privatized” the business schools.

“Some in the UC system see privatization as radioactive,” he concedes. “I prefer the words financial sustainability. We’re reducing our reliance on state funds, which makes our business model much more akin to a private university….”…