# UCLA MFEUCLA Anderson to raise tuition

#### Andy Nguyen

##### Member
According to this BusinessWeek article, if the plan to forgo state aid is green lighted, UCLA will raise tuition to match those at Wharton and Stanford.
Currently, the school charges $41,000 for California residents and$49,000 for non-residents
The tuition for UCLA MFE students for 2011 is \$51,500/year

Tuition Hike Likely as UCLA Anderson Rejects State Aid - BusinessWeek

#### Lyosha

##### Psychic in Training
... glad I'm not a student there!

#### DominiConnor

I think this is likely to be part of a trend for courses that are perceived to lead to well paid jobs.

Simplistic economics might suggest that a recession is a dumb time to raise prices, but that ignores utility functions and agency effects.

People who run courses want to run 'good' course, where 'good' is a mix of quality of teaching and the calibre of the students who take it.

If your course is attractive, then it's easier to raise the quality of students than to make the course better. Also better students are usually easier to teach, often more interesting to teach as well.

However there is not real correlation between the quality of students and their ability to pay. There is also a *negative* correlation with their desire to pay. This comes about because the very best students often get offered attractive scholarships, and a % of my mail is from these people who have to choose between an MFE that costs more than their parents home and being paid to study something like maths or engineering.

So if you have a course that is over-subscribed there is a trade off between smart students and rich ones.

That ratio is affected by the level of fees, and my sense is that 'branded' schools could increase their fees by 30% without any fear of not filling the places, and the optimum in terms of simply getting the most money is much higher. An auction for places at some schools might lead to a doubling.

But at the limit that would get students of highly variable ability.

Also the 'capacity' of a course is typically the desired student /staff ratio. My call is that most MFE programs could add 50% to their cohort using existing buildings, some could easily double or triple. Since the marginal cost of a student is quite small, that's very tempting.

It's very tempting in a time when budgets are being cut hard.

The internal politics are more complex than anything taught on an MFE, but the business school will find that it can become both more powerful because it's cash that can be spent any way they choose, but under attack if they choose not to maximise revenue, but at the same time support the 'brand' of the university.

Some universities have in effect multiple MFEs in different schools, some finance courses are under the business school, sometimes in economics, and for places like the LSE much of the whole college is dedicated to producing people whose earnings are greatly enhanced by their education.

So I expect inflation to be dramatic and soon.

#### Andy Nguyen

##### Member
I'm interested in finding out if some MFE programs get to set their own tuition. I think I saw a few but more verification is needed.

Typically, if the MFE is under the math dept, the tuition is the same as a master degree in math, statistics, etc. Same goes to programs under business schools.

If the tuition is higher (rarely lower) than same level degrees under the same school, I'd like to know why and even if it's illegal.

Anyone has any data points, let me know.

#### DominiConnor

I know for a fact that "it depends"....

If an institution is state funded they are often affected by the rules set by their paymasters. This typically requires that 'local' students pay less. The definition of 'local' varies a lot. For Oxford it includes Italians and Greeks, but not of course Norwegians. Due to various bits of history, my university gave vastly cheaper 'local' rates to a large % of the population of Hong Kong.

Often this means something like 'locals pay X% less".

Often the laws around charities get involved, actively attempting to make a profit means that a few thousand bucks made from charging market rates might cost them far more in lost tax benefits.

Andy asks a hard and interesting question about MFEs under maths departments, and for the life of me I can't see any reason why they can't charge different prices for different courses. Many choose not to, and when I talk with people that run maths departments they are quite snide about the business school for this reason.
Until surprisingly recently most universities in the US and UK mostly paid academics based upon their 'rank' not their market value. Obviously expenses and jollies went the way of stars but in general there was less incentive for an academic to take part in a course that made the university more money.

#### physEcon

##### Well-Known Member
I'm interested in finding out if some MFE programs get to set their own tuition. I think I saw a few but more verification is needed.

Typically, if the MFE is under the math dept, the tuition is the same as a master degree in math, statistics, etc. Same goes to programs under business schools.

If the tuition is higher (rarely lower) than same level degrees under the same school, I'd like to know why and even if it's illegal.

Anyone has any data points, let me know.

As to legality, do you mean with respect to laws or the rules a university sets in place? For public schools though the line gets very blurred.

One way departments and programs get around these policies though is that both programs charge the same price but then one of them gives (more) fellowship money.

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