For MBAs, Waiting Is the Hardest Part

Wait-listed applicants were hoping to be tapped for the last remaining B-school slots, but top schools now say those candidates are out of luck

By Anne VanderMey

The waiting list of an MBA program is never a fun place to be, but this year's candidates have had more reason to hope than most. With the economy in crisis and the credit markets on life support, many thought that this year's accepted MBAs would turn down their offers, choosing to cling to their jobs rather than fork over $150,000 in tuition. This prospect, that admits would stay home and make space in the classroom, represented the last best hope for wait-listed students and fourth-round applicants looking for a break from this year's unusually fierce competition. According to data released by top schools in recent weeks, however, those students could be in for a big disappointment.

Admitted students at most of the top schools appear to be accepting their offers at about the same rate as last year, or higher in some cases. Of BusinessWeek's top 10 ranked schools, seven were far enough along in the admissions process to be able to hazard predictions about this year's yield based on early May matriculation numbers. Of those, six reported that yield—the percentage of accepted applicants sending in deposits—was similar to last year's. The seventh, Duke University's Fuqua School of Business (Fuqua Full-Time MBA Profile), reported a 10 percentage-point bump—a bad sign for those on the wait list.

For the rest of the top 20, most schools that could make predictions estimated it would be the same—or, in the case of the University of Notre Dame's Mendoza College of Business (Notre Dame Full-Time MBA Profile), slightly lower. A few predicted yields that were modestly higher than last year, including the University of North Carolina at Chapel Hill's Kenan-Flagler Business School (Kenan-Flagler Full-Time MBA Profile).

Planning Left to Chance

The news is a blow to applicants on the wait lists who may have had high hopes for admission, and bodes ill for late-round applicants still awaiting a decision, who will begin getting the bad news in coming weeks. Many expected low yields, perhaps believing the applicant pool had been spooked by the collapse of the MBA job market—forcing schools to turn to their wait lists to fill out their classes. But that didn't happen, and it's unclear exactly why. One possibility: MBA applicants aren't nearly as concerned about the future return on their MBA investment as graduating MBAs seem to be.

What's bad news for some applicants, though, is great news for MBA programs, which with few exceptions now have almost exactly the number of the students they need for the class that will be arriving in the fall. Because schools can exercise only so much control over whether admitted students will accept their offers, crucial planning elements—class sizes, housing, and student services—are left up to chance and mathematical models. And models can hold up only so well in a financial crisis—it's hard to calculate the impact on student sentiment of, say, a nearly unprecedented housing bust. This year was expected to be the most unpredictable on record.

Not Over Yet

In an interview a few weeks before the results came in, J.J. Cutler, director of MBA admissions and financial aid at the University of Pennsylvania's Wharton School (Wharton Full-Time MBA Profile), speculated that the 2009 yield could go up tremendously or plummet, calling it "wildly uncertain."

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