Posted by: Louis Lavelle on May 19, 2009
Harvard Business School (Harvard Full-Time MBA Profile) announced today that it will no longer require MBA applicants to submit GMAT scores. Starting with the applications for admission to the Class of 2012, HBS will allow applicants to submit either GMAT scores or GRE scores.
The news makes Harvard the latest in a series of top tier business schools to make the change. In 2006, both Stanford (Stanford Full-Time MBA Profile) and MIT’s Sloan School of Management (Sloan Full-Time MBA Profile) permitted the GRE for applicants to their MBA programs. The policy, while common among Executive MBA programs, is still the exception at top-ranked full-time MBA programs, although it’s unclear just how much longer that will be case now that Harvard has made the change.
Harvard’s acceptance of the GRE is a big win for the Educational Testing Service, which administers that test. About 18 months ago, ETS took aim at the lucrative business school market dominated by the GMAT, launching a marketing campaign suggesting that switching to the GRE would result in more applications. The GMAT, which generates about $80 million a year for the Graduate Management Admission Council, is used by more than 4,000 graduate management programs worldwide.
Deirdre Leopold, managing director of admissions and financial aid at HBS, said the GRE was allowed to make the application process easier for applicants considering graduate programs other than the MBA.
Since many HBS applicants are also considering graduate programs besides the MBA, there is now no need for them to take the GMAT if they have already taken the GRE. We believe that both the GMAT and the GRE meet our expectations of what a standardized test can tell us about a candidate's ability to thrive in our MBA program.
From the test-takers perspective, one big advantage the GRE has over the GMAT is price: the GRE costs just $150, versus $250 for the GMAT. But applicants haven't exactly been clamoring for a lower-cost alternative to the GMAT. From the schools perspective, the GMAT has a lot of research backing up its claim that it's a good predictor of success in a graduate management program, whereas the GRE is in uncharted territory.
So will more schools opt for a GMAT-optional approach? ETS is predicting the floodgates will open now that Harvard has taken the plunge. David Payne, an ETS vice president, says the Harvard news, along with a new "noncognitive evaluation" section of the GRE that will be available in July (it measures teamwork, ethics, persistence, and creativity) will convince many other business schools to accept the GRE.
Payne notes that over 220 business schools accept the GRE for MBA applications already, including 5 of the 10 top internationally ranked programs. About 25 new programs signed on in the last month alone, he said. Here's his take on the impact of the Harvard news:
I think that number  will go through the roof over the summer and into the fall. Harvard is going to help us reach that tipping point. Other schools will say, 'If it's good enough for Harvard then it's good enough for our institution.'