GRE or GMAT: The Test-Taker's Dilemma

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In what demographic do you fall?

The GRE traditionally attracts a younger group of test-takers than the GMAT. With a price tag about $100 less than the GMAT's and testing available in more geographic regions, the GRE is more accessible. That fact is not lost on business school leaders, who realize that by accepting the GRE they're making a graduate business degree a real possibility for a larger group of people. Many undergrads take the test fresh out of college just in case they decide to apply to a master's program or because they're unsure of what to do with the rest of their lives. The test scores are good for five years, which makes it possible to use the scores after a few years of work experience, which is when many people apply to MBA programs.

On the one hand, business schools are attracted to this demographic because it helps schools diversify their applicant pool and reach younger female applicants, many of whom opt to forgo B-school and start families in their mid to late 20s, when most people apply to business programs. On the other hand, one of the major obstacles that trips up many a B-school applicant is lack of a clear career path and an explanation for the role an MBA will play in those plans. "We are not interested in students who just want a graduate degree," says Sherry Wallace, director of MBA admissions at UNC Kenan-Flagler Business School (Kenan-Flagler Full-Time MBA Profile). "We want those students who make a rational decision about earning the MBA." Kenan-Flagler has no plans to accept the GRE in the near future.

How will you perform on each exam?

Your business school application is meant to provide proof to schools that you will succeed and make a significant contribution should you matriculate and graduate from that program. The standardized test scores are usually used in tandem with GPA and other academic records to determine whether you can handle the rigor of a particular MBA program. Having a high score on the standardized test, especially if your GPA is lackluster, is a necessity for admission to top-tier programs. Admissions consultant Linda Abraham suggests applicants take practice tests to see on which test they'll score better. Their goal, she adds, should be the 80th percentile or higher on at least one of the tests.

Indeed, Kaplan Test Prep agrees that you should work with your strengths. "If you have a liberal arts degree—and your background is in education or writing or the arts, and you're much stronger in vocabulary than in probability and statistics—there's a reasonable chance you'll do better on the GRE, which is more heavily focused on vocabulary than the GMAT," according to an e-mail from Kaplan spokesperson Carina Wong.

What are your post-MBA plans?

Recruiters from investment banks and management consulting firms continue to rely on GMAT scores when considering job applicants. If those fields are the ones you hope to enter, you should take the GMAT, say experts.

When do you plan to apply to business school?

If your answer to that question is "in the next few years," then the GRE and GMAT may be on more even footing with admissions committees by then. Kenan-Flagler's Wallace believes the GRE will continue to gain traction at graduate business schools as more schools accept it. "The future is already here," she says. "More schools are using the exams interchangeably and the marketing of both exams will be increasing, as we're already seeing."

But if your answer is "this year or next," then the GMAT is almost certainly the best choice. It is considered by many to be a rigorous, well-respected exam that provides a clear link between achievement on the test and success in business school, something the GRE can't claim, at least not yet. Graham Richmond, co-founder and CEO of Clear Admit, a Philadelphia admissions consultant, says less than 10% of his clients have taken only the GRE to apply to business school. "The GMAT is still the gold standard," adds Richmond. He has been telling clients to take the GMAT, unless they are dual-degree candidates who are applying to graduate schools that require the GRE.

Jose Ferreira, founder and CEO of Knewton test prep in New York, also weighs in on the side of the GMAT. "Schools don't really want to see GRE scores," says Ferreira, whose company offers GMAT prep only. "They'll accept your GREs just in case you're the next Steve Jobs. The problem is that you're not the next Steve Jobs, so all you've done by submitting GREs is taken an easier and less relevant exam."

Di Meglio is a reporter for BusinessWeek.com in Fort Lee, N.J.

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