IIM Bangalore placements 2011: ICICI, Deloitte, McKinsey largest recruiters

IIM Bangalore placements 2011: ICICI, Deloitte, McKinsey largest recruiters

The Indian Institute of Management (IIM), Bangalore completed final placements for its PGP batch of 2009-11 with 461 offers from 135 companies. ICICI Bank recruited the most with 19 offers followed by Deloitte Consulting and McKinsey & Co who made 17 and 12 offers respectively.
The PGP 2009-11 batch strength was 348, of which 16 students deferred their placements with the stated intentions of starting their own businesses.
Total number of students 348
Opt-outs 16
Students who appeared for placements 332
Number of companies that made offers 135
Total number of offers 461
Average offers per student 1.39
Final placements 230
Lateral offers 147
PPOs 84
Domestic offers 387
International offers 74
Finance and consulting companies recruited the largest number of students.

The top 5 recruiters left with almost one-fifth of the batch.
Top 5 Recruiters Offers Made Offers Accepted
ICICI Bank 19 19
Deloitte Consulting 17 14
McKinsey & Co. 12 11
Yes Bank 11 11
Infosys Consulting 12 7
Finance
Investment banking roles contributed to 20% of the offers while Private Equity, Venture Capital, Private & Wholesale Banking, Treasury, M&A and others contributed to the remaining 16% offers from Finance. Goldman Sachs made 7 offers across investment banking and securities divisions. Barclays Capital, Citi Global, Deutsche Bank, HSBC Global, BofA-Merill Lynch, Morgan Stanley made offers in the investment banking division for Mumbai, Hong Kong and Singapore locations. UBS recruited students for three desks across Asia-Pacific locations. A Europe-based Bank offered an associate position in the Netherlands. Olam International offered Commodities Derivatives Trading profile to five students for the Singapore location. Companies that had recruited by making pre-placement-offers were Barclays Capital (Hong Kong), Citi Group, Deutsche Bank (London), HSBC Global, JP Morgan, Bank of America-Merrill Lynch, Nomura, Royal Bank of Scotland, Rothschild and Standard Chartered Global across New York, London, Hong Kong and Singapore locations. Morgan Stanley (Hong Kong) offered an associate position to one student. Private Equity firm Blackstone Group recruited one student for their Real Estate Fund. Chrys Capital and o3 Capital too recruited from IIM Bangalore. A venture capital fund picked up one student.
Other recruiters from the finance sector were American Express, Anand Rathi, Allegro Advisors, Avendus Capital, Axis Bank, BNP Paribas, Capital One, Citi Bank, Edelweiss, HSBC, ICICI Prudential, India Infoline, JM Financial, Kotak Wealth, Standard Chartered and Yes Bank.
Consulting
AT Kearney (9 offers), Boston Consulting Group (7 offers), Bain & Co (7 offers) and McKinsey & Co (12 offers based out of India, Sydney and Brussels) were the largest recruiters. Arthur D Little and Oliver Wyman made offers for New York, London and Dubai locations. Some of the other consulting firms that recruited at IIMB were Accenture, Alvarez & Marsal, Booz & Co, Deloitte, Ernst & Young, EXL Services, Infosys Consulting, KPMG, PwC, and Siemens Management Consulting.
Sales & Marketing
Hindustan Unilever (5 offers) and Procter & Gamble (9 offers) were the largest sales/marketing recruiters and offered positions for marketing profiles in India and Singapore. Some of the other recruiters from this sector were Aircel, Airtel, Asian Paints, Aviva, BMGI, Britannia, Diageo, ITC, Johnson & Johnson, Marico, Nokia, Philips and Videocon. Myntra offered the role of Executive Assistant to the Founder while Comviva recruited one student for the role of Chief of Staff.
General Management & others
Around 7% of the offers came from the General Management sector while the remaining 6% of the offers came in the form of Operations & Product Management roles. Aditya Birla Group made offers to 7 students. Some of the other major recruiters in this sector were Essar, Hinduja, Mahindra & Mahindra, Lodha group, Reliance Industries and Tata Administrative Services. Ingersoll Rand offered the ‘Entrepreneurial Management Programme” to 3 students at IIM Bangalore. Narayana Hrudayalaya, a multispecialty hospital, visited campus for the second consecutive year and offered Vice President positions to four students. Global e-Procure recruited three students for supply chain consulting profile.
HCL, Intelenet, McAfee, Microsoft and NetApp offered Product Management profiles. Some of the other firms that participated in the recruitment process were Amazon, Heidrick & Struggles, DPDHL (Singapore), Google, ITW, Jindal Steel & Power Ltd, MTS, SunEdison, TVS Logistics and ZS Associates.
Overseas placements
A total of 74 international offers were made, of which 54 were accepted. The most number of international offers came for jobs based out of Singapore, Hong Kong and London, primarily from Finance companies.


Lateral placements
Those with more than 22 months of fulltime work experience were eligible to participate in lateral placement process. More than 50 companies visited IIM Bangalore as part of the lateral recruitment programme. The total number of offers made during lateral placements was 147 out of which 73 offers were eventually accepted. Management consulting was the biggest recruiter with close to 55% offers coming from this sector. Deloitte Consulting with 13 offers and Infosys Consulting with 12 offers were the biggest recruiters in this sector. Other major recruiters were Accenture Management Consulting, Ernst & Young, PwC, Heidrick & Struggles (Singapore), Cognizant, Wipro, ZS Associates, Siemens Management Consulting and DPDHL (Singapore). Around 15% of the offers were General Management profiles. Aditya Birla Group was the biggest recruiter with 7 offers. Some of the other recruiters from this sector were the Hinduja Group, Adani Group, Reliance Industries, Schneider Electric and Mphasis. Close to 10% of the offers came from the finance sector. Yes Bank made a total of 7 offers across Investment Banking, Risk Management, M&A and Treasury. Private equity fund ChrysCapital recruited 2 students for associate positions. The biggest highlight was a Europe-based bank (name undisclosed) which recruited an IIM Bangalore student for an associate position based out of Netherlands. Rest of the offers came from Sales & Marketing, Operations and Product Management sectors. Some of the firms from these sectors were Philips, Microsoft, McAfee, Google, HCL, InfoEdge, Indus Valley Partners, SunEdison, MTS, Mindtree, Unisys, Infotech, Jindal Steel, Intelenet, NetApp and Technopak.
Acceptance of offers
The ratio of offers accepted to offers made was the lowest during lateral placements. Whereas more than 87% of offers made during the final placements were accepted.


With 65% of the lateral jobs comprising Consulting and Finance offers and acceptance rates for consulting and finance PPOs being as high as 80%, it is clear that recruitment decisions for the most plum finance and consulting jobs are preordained in favour of people with work experience, strong academics or both. Those getting PPOs from these companies would have gotten a summer internship largely on the basis of their pre-MBA profiles.



Another interesting statistic shared by IIM Bangalore shows that acceptance ratios for different types of offers have been falling since the economy improved after the 2008 recession. While in 2009 students accepted whatever offers that came their way, students are now becoming pickier.
This year, IIM Bangalore students have rejected the maximum proportion of overseas offers in 5 years. The interest in PPOs too has fallen by a third since 2009 and nearly two-third of students who interned in sales and marketing, general management and operations profiles have rejected their PPOs in favour of a likely better offer during final or lateral placements.
It is likely that b-schools in the same grade too would be following similar trends.


Salary data for IIM Bangalore placements is unavailable as the institute has maintained a no-salary-disclosure policy since 2006.

Tips to help you ace IIT-JEE

Tips to help you ace IIT-JEE


The syllabus of Class 11 & 12 contributes about 45% and 55% of IIT-JEE question papers respectively. When you are preparing all the chapters of Physics, Chemistry and Mathematics, stress may be given, in particular, on the following topics.
Mathematics: Quadratic Equat-ions & Expressions, Complex Numbers, Probability, Vectors, Matrices in Algebra; Circle, Parabola, Hyperbola in Coordinate Geometry; Functions, Limits, Continuity and Differentiability, Application of Derivatives, Definite Integral in Calculus.
Physics: Mechanics, Fluids, Heat & Thermodynamics, Waves and Sound, Capacitors & Electrostatics, Magnetics, Electromagnetic Induction, Optics and Modern Physics.
Chemistry: Qualitative Analysis, Coordination Chemistry & Chemical Bonding in Inorganic Chemistry, Electrochemistry, Chemical Equilibrium in Physical Chemistry and Organic Chemistry complete as a topic.
Planning is the key The way to prepare and deal with the study pressure is proper planning and its implementation.
* Divide the time available on the three subjects.
* Further detail out the chapter-wise, topic-wise time schedule.
* Make summary notes/points to remember of all the concepts topic/chapter-wise and flag the questions with twist, intermingling of concepts requiring analytical skills. This will help in quick revision, a couple of days before or even on the eve of the examination.
The right approach
Students, who have to simultaneously prepare for XII board and IIT-JEE, should start concentrating on Class XII and corresponding IIT-JEE chapters around 21 days before board examination. However, the flame should be kept burning even for Class XI chapters by way of revision till start of board examinations. After the board examinations, focused and concentrated revision of both Class XI & XII subjects will have to be undertaken.
The right approach for those appearing first time or second (last) time is to stick to one source and not to refer to multitude of books/study material available in the market. For example it is sufficient to go through study-packages, IIT-JEE Archives, Review-packages, Work-books, Grand Masters Package/Equivalent, AITS/AIITS series etc., supplied by FIITJEE if the student is enrolled in any of its programmes. To reap benefits, the students, throughout preparation period, should remain focused with a positive attitude to study with utmost concentration. It is quality of time spent and not the quantity alone. A short break of 5 to 10 minutes every one to one-and-a-half hours of serious study is advisable. Total relaxation during the break will supposedly charge the batteries for another intensive spell of serious study.
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Pattern of papers
There will be two three-hour combined papers (Physics, Chemistry, Mathematics) to test the aptitude, comprehension and analytical ability of the students. Expected pattern in 2010 is a suitable mix of various types under 2006 to 2009 (view table below).
Importance of practice sessions
To keep focused for better results, the student should strictly follow a well-planned time schedule. During practice sessions speed in working out the questions should be developed. This is a natural byproduct if the student has attempted questions from basic principles in the initial stages. However, it is never too late to practise it. This strategy of solving questions from fundamentals will induce in the student a parallel thinking process so very necessary to increase and master analytical skills with conceptual understanding. The proof of pudding is in the eating. Progress made must be checked by solving Quizzes/Mock Test Papers on a regular basis. The student should aim at 100% hit rate i.e. all attempted questions are correct. This will ensure a competitive edge over others who will be left behind due to negative marking. Speed and accuracy will also allow finishing the papers ahead of time, leaving some time for revision.
Keep mind and body fit
Asanas, Pranayama and Meditation (in that order) every day in the morning and/or evening will help to develop inner calm and power of concentration needed for success. This will ultimately be of immense help on the D-day. Minimum 5 to 6 hours of sleep daily is necessary to keep the mind and body fit.
Smart tip: Understand application of concepts and analytical skills vis-à-vis mechanical/ blind application of formulae/theory.
Facing the exam
The strategy in the examination hall will be to keep cool, to have faith and to harness the examination temperament built during planned preparation. It is advisable to reach the examination centre at least 20 minutes early. A few deep breaths will ward off nervousness. Instructions given in the question papers should be read and followed very carefully. The student should not spend more than 45 minutes on any of the subjects in the first attempt.
He should fix priorities after a concentrated quick reading of the paper and start answering with the question he knows best and move progressively to ones in ascending order of difficulty. Questions with no negative marks must be attempted. The 45-minute cycle should be repeated for the other two subjects. Thereafter the student should come back to the three sections for attempting left out questions, conceptually with well-reasoned logic and for over all revision during the last 45 minutes. Even if some segment/section appears to be tough, one should keep cool since it is the relative performance which will count and hence the student should put-in his best.
Remain positive
IIT-JEE exam tests understanding in application of concepts and analytical skills vis-à-vis mechanical/blind application of formulae/theory. Temporary set-backs or poor performance during practice in some Quiz or Mock Test Paper should not discourage and the student should march onwards with greater and greater will and determination. The success in the IIT-JEE examination is directly proportional to the number of problems solved independently
and preferably by more than one method. To raise the bar and to develop muscles, the weight is to be lifted by the student himself.

TeamLease Services raises Rs 100 cr for expansion

TeamLease Services raises Rs 100 cr for expansion


Staffing and education firm TeamLease Services today announced that it has raised Rs 100 crore from ICICI Venture and Gaja Capital Partners to fund vocational education expansion.


TeamLease Services, focused on the organised temporary staffing market since 2003, entered vocational education by acquiring the Indian Institute of Job Training (IIJT) in 2010.

IIJT operates over 150 centres that deliver classroom and satellite training in five domains--finance and accounting, IT infrastructure, sales and marketing, retail and English and soft skills.

TeamLease Services said it has also begun work on TeamLease University that will offer associate degree programs in the same domains and will start operations later this year after regulatory and legislative approvals.

The company is also actively engaged with various State governments through Public Private Partnerships (PPP). It runs the only PPP Employment Exchange and one of largest PPP tribal training programs in the country.

"Innovating in India's people supply chain requires operating at the intersection of jobs and skills since companies are looking for trained candidates and candidates are looking for jobs. This fund raise allows us to create a corridor between certificates, diplomas, associate degrees and jobs," TeamLease Services, managing director Ashok Reddy said.

The capital raised will be deployed for the vocational education initiative--a rollout of IIJT centres, national satellite delivery capabilities, building a corporate training business, acquiring a footprint in new domains more suitable for students directly after Class 10 and the TeamLease University project.

Mr Vishakha Mulye, Managing Director and CEO of ICICI Venture, said, the education and staffing sector in India is "poised for an exciting future" as there is clear recognition within the Government as well as the private sector about the need to address gaps in the people supply chain, up-skilling of workforce and quality training.

The National Skill Mission has set a target of making 500 million people employable by 2020.

'RTE Act implementation is challenging'

'RTE Act implementation is challenging'


The challenge in RTE implementation is changing the mindsets of teachers, parents and the school managements. While during their BA and B Ed teachers are taught that every child wants to learn, once the teachers come to class, their attitude changes. Nandakumar, project officer, Sarva Shiksha Abhiyan talks to DNA regarding the RTE Act.
It’s been one year since the RTE act has been enforced, how is the state faring on its implementation?
Since we already have eight years of experience in Sarva Shiksha Abhiyan, implementing RTE in Mahararashtra, so that every child goes to school, is not very difficult. We have already identified the problem areas and are working towards their solutions. Through School mapping we have realized that we need to create 904 new schools so that all children can be educated. There is no lack of funds. And luckily, due to our SSA experience, most of the infrastructure is already in place. Also, as the census report indicates, the number of children in the country is reducing as people are planning smaller families, so enrollment of students is also not a problem.
What are the challenges faced while implementation of RTE act in the state?
The real challenge in RTE implementation is changing the mindsets of teachers, parents and the school managements. While during their BA and B Ed teachers are taught that every child wants to learn, once the teachers come to class, their attitude changes. They think that all children are not capable of learning and so some children will fail. This attitude needs to be changed.
That is what RTE is attempting to do. We need to engrain in them that every child can learn. Commiting mistakes in learning are their birthright. Schools do not have a right to stop their learning if they do these mistakes. They cannot detain children. Instead, through remedial coaching, schools need to bring these children up to speed. Unfortunately, many schools have not understood the spirit behind this policy. So it is being misused.
What kind of training is being given to the teachers so that they can teach students who have never been to school?
Responsibilities of the teachers have increased. Under RTE, teachers have to teach students who might not even know Marathi. They might be only literate in their native language. So teachers will have to take special efforts to learn ‘one more language’ so that they can reach such students. For instance, teachers in Maharashtra only understand Marathi, so they are unable to communicate with tribal children. They will not even bother to learn their language.
So we have been giving them training on two levels. Motivational training so that they develop a positive attitude and we are training them to increase their skills, creativity , so that they can introduce innovative techniques of teaching that can relate to multiple intelligences in the classrooms.

Road to IIT: Meet Anand Kumar, brain behind Super 30

Road to IIT: Meet Anand Kumar, brain behind Super 30

Educator Anand Kumar could not attend Cambridge University due to financial constraints. Today, he coaches deserving students for IIT-JEE.
HIS father, a post office clerk in Bihar, couldn't afford private schooling for his children. So, Anand Kumar studied at a Hindi medium government school where, at an early age, he fell in love with mathematics. During graduation, he submitted papers on Numbers Theory that were published in UK's Mathematical Spectrum and The Mathematical Gazette.
He was accepted by Cambridge University and was close to realising his dream of becoming a mathematician, when his father suddenly passed away. The household income dwindled and Kumar and his mother made papad, which he sold door-to-door in the evenings, while writing mathematical theories in the daytime.
Then one day, a well-wisher suggested Kumar teach maths. In 1995, at the age of 22, he rented a classroom for Rs. 500 a month and started teaching. In one year's time, the strength of his classroom went from 2 to 36. Today, his study centre Ramanujan School of Mathematics is renowned, the world over. In a frank interview with Sumita Vaid Dixit, he talks (in chaste Hindi) about Indian education, revolution and his dream.
Q. Why did you start Super 30?
A. Within three years we had nearly 500 students. Although the fee was nominal - Rs. 1,500 a year - some poor students could not pay. Once, a boy came to me and said that he wanted to study but could only pay after his father, a poor farmer, had harvested potatoes. In Bihar, we call it 'aloo ukharna'.
I didn't want to take away the boy's only hope of changing his life because he couldn't pay. That's when I decided that I will form a group of 30 bright students, all from poor families, provide them with board and lodging and prepare them for IIT. This group was called Super 30. My brother Pranav Kumar, a violinist by profession, manages the institute, while my mother cooks for the students.
In the last seven years, 182 students out of 210 have made it to different IITs of the country. And for the last two years, all thirty students of Super 30 have made it to IIT. Parents of some students are bricklayers some work as domestic help. Now many of our students are working in Europe and the US.
Q. What is it about your teaching methods that help students get through to IIT?
A. This success is a combination of three factors. My students have junoon (passion), a fire in them to achieve. Two, our teaching approach is different. I use multimedia slides to make a little story with characters to explain maths concepts. Three, we take tests every day. Well, in a nutshell, we teach our students the how and why! That's all.
Q. But how do you run the place with the little fee you charge the other students?
A. I didn't start the place to make money. There are many coaching institutes in Patna for the rich, but none for the poor. NRIs (Non-Resident Indians) come to me with offers of help, but I wanted to prove that much can be achieved with fewer resources.
Q. Have you been able to prove that?
A. I think I have. There are far too many students coming to us, more than what we can take. And this has annoyed many coaching institutes. As you would know, many of the institutes here are run by criminals. I have received death threats one of my non-teaching staff was stabbed, once they even tried to blow me away with a crude bomb, but I escaped unhurt. I move around with two security guards armed with machines guns.
Q. Does the sight of security guards scare away children or parents?
A. (laughs) Children in Bihar are familiar with the criminal activities here. It doesn't scare them.
Q. Don't you get scared your life may be at stake?
A. I am doing this for society. Yes, mobility is restricted and I get frustrated at times, but it's okay. I get my strength from these kids. But over the past few years, the crime rate has come down and the police support me. Besides, if I get scared how will the others join me in creating a revolution?
Q. What kind of revolution?
A. Making education accessible to every poor child in India. I wish the kids I have taught, come back to their hometowns and do something for their people, their village. At times, it hurts to see that some forget about giving back to the society.
But there's another kind of kranti (revolution) taking place. Earlier when a peon used to work at an IAS officer's residence, he hoped that when his own son became a peon, the officer would treat him well. Today, the peon who works at the IAS officer's house wants his son to become an IAS officer, not a peon. That's kranti! We mustn't forget the sacrifice and hardships parents go through just to make sure their children live better lives, their children go to schools.
Q. Would the HRD minister's proposals bring about a change?
A. Kapil Sibalji thinks that by changing the syllabus or introducing a grading system, education will improve. The system will not change like this. Change will come when teachers have the passion to teach. 'Jab unme junoon hoga'!For that teachers should be paid well. It's ironical that while parents want their children to have great teachers, they don't want their children to become teachers!
The policymakers' idea of education is limited to Delhi and the NCR region. They have no clue of the positions of schools in Bihar or Uttar Pradesh many schools don't have roofs here.
And suggesting 80 per cent as cut-off marks for the IIT entrance exam is ridiculous. You cannot apply this to local boards or to students in villages. There cannot to be true development until the villages of India are also a part of the development process. 'Bharat ki atman gaon mein bassi hain' (the spirit of this nation resides in the villages).
Q. Then what's the way forward?
A. We need two syllabi: one for students with an ordinary intellect and one for students with extraordinary intellect. There are those who can do very well in jobs and there are those who can excel in research, and the first six years of schooling are good enough to evaluate a student's potential. This method is followed by China and Russia.
Do you know that China has topped 15 times in the past 22 years in the International Mathematical Olympiad? In times to come the top researches and scientists will come from China.
So we have to think of novel ways of encouraging our students to get into research. Why hasn't India produced Nobel winners in a long time? The ones that have are those who left this country to pursue their research elsewhere.
Q. And, what are your future plans?
A. I want to extent my programme to students of Class 5 and 6 as many gifted children fade away before they reach class 10. Many out of school to sell vegetables or work at tea stalls. I want to catch them young.
So, now I'm thinking of setting up a chain of free schools across the country, with free board and lodging facilities, where children can study from Class 5 to up to Class 12 and where they are prepared not just for IIT but Olympiad tests in mathematics, physics and chemistry.
Q. But your dream of going to Cambridge still remains unfulfilled?
A. When those eyes full of hope look at me, the respect and pleasure I get seeing my students being placed in large organisations makes me forget about it. But I do keep travelling to the US to give lectures my papers get published in international magazines. I am happy.

Penn State students rally for reduction of state education cuts

Penn State students rally for reduction of state education cuts


Penn State Altoona sophomore Kimberly Isaac likes it here and has gotten "the hang" of her print journalism major.
But her parents in Queens, N.Y., are struggling with the responsibility to pay her $30,000 a year college costs, even as they pay off her big sister's Penn State loans. So Isaac fears the big tuition hike that must follow if the state follows through on Gov. Tom Corbett's proposed 50 percent cut in higher education funding.
Isaac was among 75 Altoona College students - 500 altogether from Penn State - at the university's annual Capitol Day rally Tuesday in Harrisburg, urging lawmakers to back off the radical cuts.
"It would be a big step" - one she'd be reluctant to take - if she had to go to a smaller school closer to home, Isaac said after the rally.
Her parents are willing to do more, "but there's only so much they can do," she said.
"Everybody fears the worst," said Paige Blawas of Latrobe, president of the Altoona Student Government Association.
Blawas worries she'll need a serious job to supplement the minimal one she now holds during the school year, and that extra effort might diminish her college experience and even her grades.
Her family is middle class, not "well-off" - as one speaker she heard Tuesday presumed to label most of the students, she said.
Her dad has a small business installing stair lifts, her mom helps him part-time and her brother is starting college in the fall.
And the family income isn't guaranteed: "It's all about sales," she said. "And if [my dad] has a bad month."
Ben Clark, SGA vice president, worries that friends may need to leave Penn State or that he'll find at reunions 20 years from now they're still paying off student loans.
He also wonders about increasing numbers of students in his classes due to faculty cuts and even the possibility of closures of outreach campuses, a possibility university officials are examining.
It would seem that Altoona should be safe, being large and close to University Park, making it an easy transition for juniors to the main campus, he said.
But that very proximity might make it easier to close, because this area of the state is already served by the main campus, and because closing a large satellite campus would lop a large part of the overall costs all at once, he conceded.
Still, the situation may not be as dire as it seems, Blawas said, after speaking to aides of state Sen. Kim Ward, R-Westmoreland.
"They said a lot that was reassuring," Blawas said. "They made it seem as though it wouldn't be as big a cut as expected."
Likewise, Clark was pleasantly surprised.
He went expecting to feel alienated, with non-receptive lawmakers.
Instead, he found them "engaging," and hoping to work out something that would "not hit [us] as hard as originally proposed."
It probably helped that his father, Dan, was a state representative for Juniata, Mifflin, Snyder and Perry counties from 1988 to 2002.
Clark talked with state Reps. Rick Geist, R-Altoona, and Bill Adolph, R-Delaware, the latter of which he'd known as a child, through his father.
Clark and the others he encountered Tuesday are "good kids," Geist said.
As for the students' hopes of a smaller cut, "the budget is far from being done," he said.
He thinks Corbett's $27.3 billion total "will hold," but that the items within that budget are "a moving target."
Mirror Staff Writer William Kibler is at 949-7038.

Pell Knell

Pell Knell
Even if Obama wins on education funding, students will lose.
In February, Republicans unveiled a plan to cut funding for Pell grants by 25 percent and slash the maximum award by $845—changes that would knock funding to below 2008 levels and, according to education experts I spoke to, devastate students who rely on the program for support. The White House responded by offering a preemptive compromise, asking for more modest cuts in an attempt to claim the political center and maintain the maximum grant at $5,500: It called for reductions of $100 billion over ten years, through the elimination of a rule that allows summer students to qualify for additional Pell grants and the elimination interest subsidies for graduate students. "Cuts like these are never easy,” said Education Secretary Arne Duncan, “but in the current fiscal climate they are the responsible thing to do, and the only way to ensure that we can make the investments we need to secure our future."
This may or may not succeed politically. As the White House plays a game of budgetary Uncle with House Republicans this week, President Obama will at best receive what he has asked for, and at worst acquiesce to drastic cuts that would render its slogan of “Winning the Future” utterly hollow. Yet the fact is that even if Obama wins and manages to preserve most Pell funding, students will lose: With cash-strapped states dramatically reducing the amount of support they provide for higher education, the total pool of funds looks to be shrinking precipitously, and anything short of a serious increase in federal support to fill the gap will curtail the dreams of thousands upon thousands of young Americans.
There is no aggregate figure available totaling all state-level reductions since the beginning of the financial crisis, but we do know that 43 states have made cuts to higher education since 2008, according to the Center on Budget and Policy Priorities. Many of these reductions are gut-wrenching: In Michigan, where state financial aid plummeted by $135 million—or over 60 percent—in the FY2011 budget. Missouri’s FY2011 budget will cut need-based aid by about 60 percent. In Iowa, spending on public universities dropped 20 percent, or $141 million, in the last two years.
In a budget bind, state legislators have long known they can hack at post-secondary education more than other services, because tuition hikes usually cover the funding gap. “It’s basically a way of raising taxes without getting dinged for it,” says Kevin Carey, a researcher Education Sector, a think tank. Sure enough, tuition at Florida’s eleven public universities has increased by 32 percent in the past two years, while the vaunted University of California has also hiked its tuition by 32 percent since the middle of the 2009–2010 school year. Many others have followed suit.
Indeed, with soaring education costs, the maximum Pell grant does less to help students afford college than it did in 1990. (It currently covers just 34 percent of tuition, fees, room, and board at public four-year colleges, according to the College Board, compared to 45 percent two decades ago.) In these conditions, there is an urgent need for more federal help for disadvantaged students—not less. The administration hopes to tie the maximum Pell grant to the Consumer Price Index between 2013 and 2017, which would amount to an estimated $425 bump, but at this point, that’s simply a wish-list item to be determined largely by future Congresses. (Paul Ryan, who will probably still chair the House Budget Committee during negotiations over spending for 2013, has just announced that he supports dramatic cuts.)
And reductions in education funding have real consequences. According to Sara Goldrick-Rab, who has seen the effects of Pell grants first-hand as Co-Director of the Wisconsin Scholars Longitudinal Study—which tracked 3,000 Pell grant recipients for the past three years—grants like these often make the difference between a college education and dropping out. “I have kids in my study who have parents taking on two or three jobs. I also have kids who are taking on two or three jobs. They are skipping breakfast,” she said. “And they’re getting a Pell, and taking away the Pell is going to make continuing in college impossible.”