Student to sue Stockholm University over “false MBA”

Stockholm University is to be sued by a student who claims that the institution falsely marketed a course and is now refusing to refund his fees. But according to the university's Chief Counsel, they have done nothing wrong and will fight the case "as a matter of principle".

The one-year course was described on the School of Business web site as an International Executive Masters of Business Administration (IEMBA) and cost 170,000 crowns per student. But within weeks of joining the programme in January 2003, American Tom Smith felt that the courses being taught were not up to the standard of an internationally accepted MBA.

“Many of the classes were free tuition undergraduate classes, and were aimed at a much lower level,” he told The Local.

Smith says that when he asked for his money back he was told by the course coordinator that it wasn’t in fact a Masters degree but an MBA.

“When I asked what the “M” stood for, the dean of the School of Business just said it was an ‘executive’ MBA,” says Smith.

Smith later found out that Masters degrees are not officially awarded in Sweden.

“But when I applied, I was told that this was a Masters degree, and the web site specifically stated that it was a Master of Business Administration,” he says. “They baited me with false marketing.”

The dean of the School of Business at the time, Sikander Khan, left his post in May 2004. But Carl Norrbom, the deputy dean, says that the misunderstanding was due to the problem of translating the word ‘Master’.

“In Sweden we don’t have any master degree programme – no state university has,” he says.

He explained that the closest Swedish equivalent is a ‘magister degree programme’, which is a one year full time course after the bachelor degree.

“A master degree programme in other countries can be a two year full time programme,” says Norrbom.

“So the reason we in Sweden at state universities should not use the word master is perhaps first of all that our ‘magister’ programme is only one year, but also because it is a fact that in no original official document the word ‘master’ is used.”

Today, the IEMBA programme leads to the Swedish ‘magister’ degree. But Tom Smith says that when he joined, it did not even have this status. Instead, successful students would be awarded “an IEMBA diploma with 40 academic points”.

The alleged misrepresentation of the programme wasn’t the only problem with the course. According to Stockholm University’s own regulations, the Chancellor’s approval must be sought for course fees over 100,000 crowns. This procedure appears not to have been followed in the case of the IEMBA.

Carl Norrbom accepts that the School of Business made a mistake in not seeking approval.

“We had permission to run the IEMBA programme,” he explains. “We didn’t realise that we needed a separate agreement for each individual participant applying to the programme. Now we do it.”

In response to Smith’s request for a refund, the Head of Administration, Leif Lindfors, told him that the university “could not solve disputes like this on [its] own”. Lindfors offered to refer the matter to the Office of the Chancellor of Justice if Smith wanted to pursue it.

Smith also reported the issue to Högskoleverket, the National Agency for Higher Education.

After considering the case the Office of the Chancellor of Justice decided that since Smith’s own company, a Washington DC consultancy, had paid for the course, it was a contract law issue and would have to be pursued privately by the company.

Stockholm University told Smith in April 2004 that it considered the case closed and according to Marika Riben, the university’s Chief Counsel, nothing has changed.

“There has been an investigation into this and as far as we are concerned it is no longer a matter for the university,” she told The Local.

But in June 2004 the National Agency for Higher Education released its own findings, which seriously criticised the university’s handling of the IEMBA programme.

In terms of the marketing, the agency criticised the university “for the way in which it gave out incorrect information about the course, both on the university’s web site and in other information about the programme”.

“That this is not a question of a translation of magister degree is clear from the actions in the matter,” wrote the agency in its findings. “No magister degree was established for this programme before February 2004.”

The National Agency for Higher Education also attacked the inability of the university to provide the costs which led to the 170,000 crown fee for the course, saying that “it should not be accepted that prices are set without calculations”.

According to Swedish law only companies or other institutions may pay that fee – not private individuals. But the agency also criticised the university for “in many cases not having checked who the client was”.

This was first revealed in an article which appeared in Dagens Nyheter in November 2003, which stated that a number of Chinese students had paid for their education personally.

Carl Norrbom says that he is aware of the law and that the allegation is unfounded.

“After the DN article we – and an auditor – checked the invoices,” he says. “All were companies.”

However, an informed source close to the Chinese students told The Local that “most of the students paid the money themselves, but directed it through companies in which they were not employed”.

A number of Chinese students were also dissatisfied with the level of the course. In December 2003 the Chinese Ministry of Education posted a caution about the IEMBA programme on its web site, stating that it was not “an officially approved Masters” and that according to Swedish law no university could receive money from individuals.

The caution is still on the Ministry’s site.

Finally, the National Agency for Higher Education criticised Stockholm University “for not answering [Tom Smith’s] requests within a reasonable time”.

Smith spent the autumn in the USA but having returned to Sweden intends, through his company, to take Stockholm University to court. He considers that this is now the only avenue left open to him.

“I really would prefer not to have to sue Stockholm University,” he says. “But I just want my money back.”

Marika Riben says she is not surprised that Smith is taking this route.

“Of course, we have considered the possibility that he would sue,” she says. “But we did not come to our conclusion hastily and we have grounds for it. Tom Smith knows these grounds and he can go to court if he pleases.”

“When we take a standpoint, the Vice Chancellor and Administrative Director consider whether it is an ad hoc case or a matter of principle,” she added.

“This issue is of major principle interest.”

But Smith is equally determined, and he told The Local that he is expecting to begin an action against Stockholm University in January.

“The sad thing about the whole situation is that I really have a lot of respect for the Swedish education system,” says Smith. “But I’m not going to stop until I get my money back.”

Related links

Stockholm University School of Business

National Agency for Higher Education

National Agency for Higher Education findings (Swedish)

Chinese Ministry of Education caution (Mandarin)

Universitet anklagas för lurendrejeri (DN, 9/11/2003)

Universitet tar betalt för kurser (DN, 13/11/2003)