MBA Applications Surge Again

A sagging economy and a weak job market are providing a boost to B-school programs

By Alison Damast

Duke University

Applications to business schools are surging, buoyed by a shaky economy and lingering fears over job security, the organization that administers the main business-school admissions exam said Aug. 26.

The Graduate Management Admission Council (GMAC) said that 77% of business schools surveyed by the group reported an increase in application volume in 2008, up from 64% in 2007. It's the second-largest year-over-year surge in applications to full-time programs since 2002, and the highest level of increase in five years, GMAC said. And early signs are that the upcoming admissions cycle will continue to be strong.

The strong demand for business school did not surprise admissions officers, who note that applications for MBA programs typically go up when the economy slides. A similar upturn was seen following the dot-com crash earlier in this decade.

Mid-Tier Schools Benefiting

Dave Wilson, president and CEO of GMAC, said in an interview that the faltering economy only explained some of the application surge. "There are a whole lot of factors that come into play during the application process, and the economy is certainly part of it, but not the only part" Wilson said. "The whole question of the value proposition of the MBA remains strong."

While applications are up across the board, the middle-tier business schools are reporting some of the sharpest increases, ranging from 25% to nearly 40% in the number of applications in some instances. At least some of the students are heading to business schools because they have lost their jobs or are worried about the future. Admissions officers said that they expect more of those students, including those who may have waited to see how the economy fares, to apply during the coming cycle.

One of the strongest indicators of student's desire to go to business school is whether they take the GMAT, the business-school entrance exam administered by GMAC. A record number of students took the GMAT this year, with the test being administered 246,957 times during this year's testing cycle, according to GMAC. Students can take the exam more than once. It is the fourth straight year of growth for the exam, the GMAC's Wilson said.

Smeal Sees 39% Gain

Admissions officers said they were taken aback by just how intense the demand was in the last application cycle. Carrie Marcinkevage, the MBA admissions director at Penn State's Smeal College of Business, said the school saw a 39% increase in application volume for this fall's entering class, up from a 7% year-to-year increase in the 2006-07 application cycle.