Business Schools Face Unprecedented Challenges Amid Covid-19

With travel suspended, schools are moving classes online and enrolling fewer overseas students. Learners are demanding fee discounts and some schools are waiving entrance requirements

Business schools around the world face unprecedented challenges caused by the deadly coronavirus pandemic. 

They are bracing for a long-term economic hit from the risk that fewer international students, who often pay higher fees, will not be able to enroll at their institutions due to travel curbs imposed to stop the spread of the virus. 

With campuses closed across the globe, many business schools have moved teaching online. At several schools, students have signed petitions demanding steep discounts on tuition fees in line with what they claim is a devalued education. Schools are also expecting requests for financial compensation for tuition fees already paid. 

At the University of Pennsylvania’s Wharton School, more than 800 MBA students are demanding a price cut. They claim that virtual coursework “does not provide the same educational value” because practical learning, networking and extracurricular activities — important components of an MBA — have been substantially reduced online.

The petition also notes the “tremendous financial burden” to be at Wharton, which charges six-figure tuition fees, a burden that may be worsened by the economic crisis caused by Covid-19.  

However, with tuition often decided by universities rather than business schools, many insist their hands are tied. Some deans have taken voluntary pay cuts to show solidarity but have stopped short of cutting tuition at a time when their own finances are under strain. 

The worst hit schools so far have been in Australia, where the pandemic and travel curbs have exposed an overreliance on overseas tuition fee income, especially from Chinese students. The International Education Association of Australia warned that universities face a A$6bn-A$8bn hit if Chinese students could not attend the first semester. 

QS, a UK education company, recently surveyed international students who planned to study abroad. The poll found 10 percent would now stay at home instead, while 37 percent intended to study abroad. 

Schools are expecting to enroll more students from the domestic pool for the 2020-21 academic year, to make up for any loss of overseas students — a key feature in an MBA, with diversity enriching learning through group discussion.  

Some business schools are relaxing MBA application requirements

Business schools are responding by being more flexible with their application processes and relaxing entrance requirements. Many are extending deadlines or offering conditional places to people who cannot take entrance exams because test centers are closed in many countries. 

Insead Business School has said it will grant deferral requests and extend tuition fee payment plans and application deadlines. The business school with campuses in France, Singapore and Abu Dhabi is holding video interviews and has put recruitment events online. 

Schools report requests to defer applications until 2021, when students hope the pandemic will have waned and the economic picture will be clearer. Those who graduate this summer will do so amid a global recession, with unemployment rates spiraling around the world as businesses remain closed because of Covid-19. 

Graduation ceremonies have been canceled, along with academic conferences, exchange programs and study trips — often a highlight of an MBA. 

Moving online

The coronavirus crisis is quickening uptake of online learning after years of lackluster demand. Many schools have migrated their classes online — a welcome intervention for students displaced due to travel restrictions. 

“These measures have been put in place to ensure the welfare and safety of students and staff,” says Andrew Main Wilson, CEO of the Association of MBAs in London. “However, for most business schools it is business as usual, as they have been able to continue teaching remotely.” 

The Haas School of Business in California moved all lectures, seminars and assessments online. In the UC Berkeley community, there has been one confirmed case of Covid-19. Public health officials reportedly said the risk of the individual, who lives off campus, spreading the virus was low. 

“Logistically, we are doing all that we can to accommodate our students, faculty and staff,” says Kim Girard, associate director of news and media relations at Haas. “The virus has certainly increased our use of online learning and we expect to learn a great deal from the experience.” 

MIP Politecnico di Milano Graduate School of Business in Milan, which has been in lockdown for several weeks, has suspended all in-person teaching. Instead, MIP is using Flexa, an AI learning platform originally designed as a career coach, to circulate study material to students around the world. 

“This at first seemed like a hard obstacle to overcome, but instead we now see it to be an opportunity,” says Federico Frattini, dean at MIP.

This could be an inflection point in the development of digital delivery that could increase uptake and spark innovation. “Online learning is a flexible and inclusive approach to teaching, with huge potential applications beyond a situation of emergency,” says Frattini. 

The question is whether the online platforms and networks can cope with high usage. Some faculty have been resistant to digital delivery. 

Early adopters, like MIP, were prepared for the switch to virtual teaching, but there is a difference between a well-designed online course and a Zoom video conference. In the UK, a series of strikes by some university staff meant that schools had already developed online content, including pre-recorded lectures, to help students.  

In London, the King’s Business School campus is shut, with classes shifted online after several students and a member of staff tested positive for Covid-19 at its affiliated university, King’s College. 

Caroline Hoxby, professor in economics at Stanford University, recently warned that institutions that fail to transition online could face financial ruin. The challenge comes as schools face a plunge in overseas tuition fee revenue and the worst economic crisis since the Second World War. 

Some institutions have announced plans to cut spending and staff. The University of Sydney forecast a A$200m hole in its finances because of coronavirus. 

But UK based education consultant Andrew Crisp says this could be a good opportunity for schools to promote shorter online programs, for example executive education.

“With many people working from home, there may be a much larger market than usual, people who will be thinking about their careers, what skills they may need in the future and where they might learn,” he says. They may also be aware of the flexibility and lower cost of learning online relative to campus study.

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