Newswise — Diversity in university business schools " and ultimately the U.S. workforce " could be another casualty of a deep and lingering economic downturn, says a longtime administrator and economist who will soon lead one of the nation's top business programs.
As tuition rises to offset economy-driven revenue declines, business schools will face a stiffer challenge to maintain enrollment among lower-income students, said Larry DeBrock, incoming dean of the University of Illinois College of Business.
"The mission of a great public university is to provide a depth of student diversity, whether based on socioeconomic or ethnic criteria," he said. "Businesses prize diversity, too, and want workforces that reflect America and its varied walks of life."
But DeBrock says enrollment among lower-income students will likely dip as universities boost tuition to make up for declining support in recession-drained state budgets.
Universities also will find it tougher to help students bridge the cost gap, as the sour economy stretches campus finances and scales back dollars available for financial aid, said DeBrock, who is to appear this week on "First Business," a nationally syndicated financial program that airs on about 150 television affiliates in the U.S. and is distributed internationally.
Census data show that minorities would the hardest hit by rising college costs, with 25.5 percent of blacks and 21.5 percent of Hispanics living in poverty, compared with 10.5 percent of whites.
But all students could feel the pinch, said DeBrock, who is to become dean later this month after a year as interim dean, pending approval by the U. of I. Board of Trustees. For example, he said, because businesses crave diversity, job recruiting could shift toward campuses that best maintain ethnic and socioeconomic balance.
"We're going to have to work harder than ever to secure financial aid for these underrepresented students," he said. "I doubt it's going to come from state funds, so we'll have to rely on the generosity of our donors, hoping they'll be willing to open doors and provide the kind of start in life that they had."
Meanwhile, DeBrock says the recession also will spark other changes in business studies and programs at the U. of I. and other universities across the country. Among others:
Business schools will re-emphasize ethics training in the wake of failed investment strategies and other alleged missteps cited as causes of the economic meltdown, DeBrock said.
Ethics training predated the recession at the U. of I. The College of Business founded a Center for Professional Responsibility in Business and Society in 2006 through a $4 million grant from the Deloitte Foundation and a $4 million judicial settlement.
The center's initiatives include a required Business 101 course for all incoming freshmen in the College of Business, with a focus on business professionals' responsibility to themselves, to their profession and to society.
Course elements include an introduction to ethical decision-making and professional standards, as well as creating a business plan that takes into account ethical, economical and environmental dimensions. The objective is to instill a sense of professional responsibility that will guide students through their careers.
"Teaching ethics and sound judgment is not something that should ebb and flow based on some magical barometer of whether the business world is ethical or unethical," DeBrock said.
"The idea that professions have responsibilities to the business that employs them and to the society they live in is important no matter what."
Curriculum will change to reflect lessons learned from the recession, such as failure of sub-prime mortgages, as well as new government regulations that will follow to stave off future downturns, DeBrock said.
"Government will no doubt enact regulatory changes, such as the way loans are issued," he said. "You're not going to see the day of no money down, no verifiable income, no disclosure mortgages anymore. And that's a good thing."
Business schools will see an economy-driven surge in applications to MBA programs, DeBrock said. Applications are up about 20 percent at the U. of I., and typically rise during economic downturns, he said.
"Getting an MBA means leaving the workforce and the promotion track for two years," he said. "But during periods of economic stagnation, people figure it won't cost them that much, so they decide to go back and get that degree they always wanted."
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