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RETHINKING THE MODEL… BY COLLABORATING revenue, Jessup's first priority was to continue the growth in enrollment with new programs. He also supported an increase in the Eller College's differential tuition from US$400 to $600 per semester. A surcharge that Eller's undergraduate students pay over and above the university's tuition, differential tuition revenues flow directly to Eller College. Finally, Jessup looked for ways to strengthen the school's executive MBA program and increase revenue from sources such as donations, grants, and corporate contracts. Today, Eller College generates between $90 million and $95 million annually from tuition and other sources, while spending only about $50 million to run its programs. "We are more than self-sustaining at this point," says Jessup. Eller College pays a large subsidy from its surplus back to the university. Jessup admits that not all business schools can boost their tuition rates to such a large extent. Even so, their leaders need to consider tuition increases if state funding has dried up—especially if an increase does not hurt their ability to attract students. In Eller's case, its tuition remains nationally competitive. "We draw students heavily from states such as California, Illinois, and New York, where rates are higher," he explains. "Competitive pressures nationwide have actually helped us, because more students are voting with their feet." In the U.K., raising tuition past the £9,000 cap is not an option. For that reason, many business schools are no longer growing their domestic undergraduate recruitment efforts, says Laing. Instead, Three business schools recently announced a new approach to global undergraduate business education. The University of Southern California (USC) in Los Angeles, the Hong Kong University of Science and Technology (HKUST), and Bocconi University in Italy have launched the World Bachelor in Business (WBB) program. In the new program, undergraduate business students will live and study on three continents and earn degrees from all three universities. The first cohort of 45 students will begin the WBB program in September. WBB students will spend the first year of the program in Los Angeles, their second year in Hong Kong, and their third year in Milan. In the fourth year, they can study at the partner university of their choice. Classroom instruction will be in English on all three campuses, but students will have opportunities to learn Chinese, Italian, and another European language. The courses offered on all three campuses meet the educational requirements of all three schools. Because of the logistics of transferring credits from campus to campus, students will follow a fairly regimented core curriculum. A faculty director at each school will facilitate communication among the campuses and handle any issues that arise. In addition, each school has designed dedicated courses specifically for WBB students to introduce them to issues important to global business. For instance, students will take technology-enabled courses co-taught by faculty on all three campuses and work on teams with their counterparts on the other two campuses. Each year, students will pay the tuition rate of the school where they are studying. During the fourth year, when students choose where to study, they will pay a specially calculated tuition rate that the partners will split, based on each school's financial and regulatory situation. "We had many discussions on how to structure the tuition—some that went up to the top levels of our universities," says John Matsusaka, professor of finance and Marshall's vice dean for faculty and academic affairs. "It's complicated for us, but it will be simple for students." At the time of this article, the partner schools already had received 1,200 applications for 45 spots through Marshall and Bocconi, and they still were waiting to close the application period at HKUST. That indicates a high level of interest among students in receiving a transcontinental undergraduate business education, says Matsusaka. "We were trying to anticipate where we thought higher education was headed," he says. "As the world becomes increasingly global, students will need to do more than visit a country for just one week or semester to develop a global mindset. They need to live there." they're focusing on specialized master's and MBA programs, where there is no government regulation of fees. They also are focusing more on international recruitment at the undergraduate level, because they can charge different fees to international students. To increase revenue, says Laing, "we're shifting the mix of programs we teach and the students we recruit." Adopt RCM Recently, some deans have raised the possibility of separating their business schools from the larger university—essentially going private. But what would privatization mean for a business school? For many schools, says Jessup, the drawbacks outweigh the benefits. While privatization offers a business school financial and strategic autonomy, it also makes it BizEd July/August 2013 21