Business School Gets Crowded

Yields are up at full-time MBA programs, and B-schools are enrolling larger-than-ever classes. But not everyone is sharing in the bounty

By Anne VanderMey

MBA programs were braced for the worst this fall. A damaged brand, a shortage of jobs, and questions about return on investment all threatened to send admitted students away from business school and into the relative stability of the workforce. Predicting final enrollment this year, says Beth Flye, assistant dean and director of admissions for Northwestern's Kellogg School of Management (Kellogg Full-Time MBA Profile), was "like trying to land a 747 on a Sunfish sailboat."

But to the relief of many an admissions officer, fears of mass student defection were never realized. Far from it. Flying in the face of many predictions, 2009 enrollment actually soared at top schools. Students accepted their offers of admission in unprecedented numbers, leading many programs to enroll more MBAs than ever in this year's entering classes.

The reasons for the higher-than-expected yields are unclear. The economic forces that boosted enrollments in recent years have clearly not abated, and many applicants may have decided to wait out a jobless recovery in B-school. The fact that top schools saw the biggest gains suggests that prospective students may be opting for B-schools they believe will provide the best ROI in a tough economy.

Among the top schools reaching all-time highs were Kellogg, at 526 from 485 last year; the University of Michigan's Ross School of Business (Ross Full-Time MBA Profile), at 500 from 433; Duke University's Fuqua School of Business (Fuqua Full-Time MBA Profile), at 447 from 434; INSEAD (INSEAD Full-Time MBA Profile), at 990 from 900; and the University of Pennsylvania's Wharton School (Wharton Full-Time MBA Profile), at 862 from 823. Harvard Business School (Harvard Full-Time MBA Profile) also brought in its largest class in recent memory, 937 students, up from last year's 900.

Though several schools planned the increase, the large classes can at least in part be attributed to the lack of what schools call "summer melt," the shrinkage that happens when students back out on their deposits over the summer. Schools were bracing for melt to hit hard this year, but in many cases, it never came—even for the programs that were banking on it.

"I was praying for melt all summer long," says Rosemaria Martinelli, director of admissions at the University of Chicago's Booth School of Business (Chicago Booth Full-Time MBA Profile). "But I just kept talking to my bosses, saying, 'We haven't moved, we haven't moved.'" Until eventually, they realized it wasn't going to. The standard models used to forecast enrollment didn't pan out this time. "The past isn't a perfect predictor, but it's pretty darn close," Martinelli says. "Until this year." Instead of 50 or 60 people backing out on their deposits over the summer, just 10 dropped off—an all-time low for the school. Booth ended up enrolling 15 more students than last year, 592 in all, its largest class on record.

Playing It Safe

For schools further down the totem pole, the picture was more complicated. Many programs didn't see a similar spike in interest or enrollment. At Arizona State University's Carey School of Business (Carey Full-Time MBA Profile), the number of accepted students who enrolled actually dipped slightly, with applicants often citing the financial crisis as a reason for not attending, and more students asking for deferrals.

"That was the biggest difference between this year and last year, people's personal financial situations coming into play," says John Roeder, admissions director at Vanderbilt Unviersity's Owen Graduate School of Management (Owen Full-Time MBA Profile), where melt was on the high end of normal. "We had multiple students who couldn't sell their houses." Other programs reported students who weren't able to secure the loans, didn't want to lose their job, or didn't think their spouses would be able to find work in a new location.

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