MBA Applications Down

Posted by: Louis Lavelle on September 13, 2011

You wouldn’t know it from looking at MBA programs at schools such as Stanford, where selectivity is typically in the single digits, but this year may have been one of the easiest on record for getting into some business school programs.

According to new research published today by the Graduate Management Admission Council (GMAC) two-thirds of the two-year, full-time MBA programs surveyed saw a decrease in applications for 2011, while more than half of part-time and executive MBA programs reported application volume that was either up or flat.

In a press release, GMAC President and CEO Dave Wilson said economic uncertainty was the reason.

“The caution in this year’s survey for full-time MBA programs is unsurprising in the current economy as students weigh the financial and time commitments required to pursue a graduate business degree,” Wilson said.

I would tend to agree, except for two annoying little facts. First, the number of master's programs in accounting, management, and finance that reported an increase in applications was up by 51 percent, 69 percent, and 83 percent respectively. Last time I checked, all of them require a big time and financial commitment, too, yet only MBA applications are losing ground.

Second, applications to full-time MBA programs are counter-cyclical: they go up during bad times and down during good. When applications were being submitted earlier this year, the future looked anything but rosy--there was talk of a double-dip recession. By all rights, there should be an increase in MBA applications, not a decrease.

GMAC surveyed 649 programs from 331 business schools worldwide. It doesn't release the application figures for specific schools, but I would be surprised if any of the top MBA programs saw a decrease in applications. At first blush it appears that people who would normally apply to second- or third-tier programs to ride out the economic storm are opting instead for another graduate business degree. Any theories on why?

It's worth noting that GMAT registrations have surged in recent months--a leading indicator that b-school application volume is in for a surge of its own in 2012. That may be good news for GMAC, but it's probably a sign that folks who typically apply to business school don't have high hopes for a swift, painless recovery.

Reader Comments

Tom

September 13, 2011 11:46 AM

Many firms like Investment Banks are cutting MBA entry level positions and employers are looking for someone with more professional experience. The age range of a MBA grad has been trending downward for the last decade. In a down market, practical skills are more important than a MBA degree.

In addition, candidate would take GMAT of a more practical degree i.s.MS Accounting/Finance degree for the short term and get a MBA when the market has more positions for MBA graduates.

Another angel I would look at is the candidate mix, is there a significant increase in international applicants to offset some decrease in US applicants? More Chinese students can afford a fancy US MBA. I would be surprised to see more international applicants.

AndrewM

September 13, 2011 2:47 PM

The reason for a spike in GMAT registration this year might be because GMAC is changing the format of the exam next year. So many of the people who are planning to apply to a graduate program (which requires you to take the GMAT) within the next 5 years want to take the exam before the changes are made to the exam.

Skylar Worthington

September 26, 2011 2:55 PM

Anyone ever wonder if GMAT apps are down because nobody wants to spend 40 to 100K on a degree that is devalued more every year?

Here is where I learn all my MBA concepts: www.brevitext.com

Very reasonable and very humorous...not super expensive and boring like textbooks.

WorriedbutOptimistic

October 2, 2011 8:56 PM

oh boy. You guys are giving me worries...Just kidding. The economy is giving me worries. I took my gmat and am planning to apply to couple of top 10 to 15 schools. At the sametime I am unsure if I will make enough money to pay back my parents for their interest free loan...

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Read daily reports from BusinessWeek editors and reporters Louis Lavelle, Geoff Gloeckler, Alison Damast and Francesca Di Meglio and boost your chances of getting into your best-fit B-school.

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