Business Schools

A Tough Season for Kelley


For eight years, James Holmen has run admissions and financial aid for the Kelley School of Business at Indiana University in Bloomington, Ind.

(No. 20 on BusinessWeek's 2002 ranking of full-time MBA programs). So he knows a bad year in admissions when he sees it, and 2003 has been one of Holmen's roughest: Application volume slid 30% vs. 2003, and the university reduced the size of the incoming class of full-time MBAs in an effort to maintain quality.

Holmen recently spoke with BusinessWeek Online management education reporter Mica Schneider about the application season he's bidding good riddance to, the year ahead, and his plans to encourage more people to study business in Bloomington. Here's an edited transcript of their discussion:

Q: Application volume dipped 30% at Kelley, with the international decline greater than domestic drop-off. Why aren't more international students interested in getting an MBA at Kelley, or other U.S. B-schools?

A: International students are still interested in Kelley, but we didn't receive as many applicants as we did over the past two years. International students are weighing more carefully the costs of the MBA, the job market for noncitizens, and the reduction in the number of H1-b visas, with the benefits. In the past, many international students thought about getting an MBA and then working for a few years in the U.S. before returning home. Now, that takes more work to accomplish.

Q: What will you do to entice international students to consider the Kelley School in this next admissions season?

A: Outreach, and traveling to about a dozen countries to meet students at MBA forums. We also enlist our alumni and current international students to encourage their friends in their home countries to apply. Our alumni can be our best resources in tough times.

Q: With fewer applicants, it makes one think that applicants had the upper hand in 2004. Would you agree?

A: It's hard to say. We made a decision to drop our target class size -- eliminating one of our four cohorts -- so that we can maintain the same level of quality. We'll enroll 40 fewer MBAs this fall.

Q: The Kelley MBA costs more than $50,000 for out-of-state residents. That's a bargain compared with other top-20 B-schools, but the loss of those 40 students spells a loss of as much as $2 million to the school's cash flow. How will Indiana compensate?

A: We also have an online MBA program, as well as an evening and part-time MBA program, coordinated on our Indianapolis campus. There is strength in those programs, which helps the school compensate.

Q: Should incoming MBAs worry about fewer services?

A: No, not at all. There have been no staff or resources cut.

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