When contemplating a college business program, students and parents alike may find the choices paralyzing. The good news is that bad choices are getting hard to make. Starting salaries for undergraduate business majors are growing faster than those for any other discipline, and the typical new business grad now earns $45,243, up 6.9% from a year ago, according to the National Association of Colleges & Employers.
Decent salaries are all well and good—if you happen to land a job at graduation. But not everyone does. At No. 1-ranked University of Pennsylvania's Wharton School, more than 90% of business students get hired before they graduate. At No. 77, Florida State University, only 38% have jobs by the time they receive their diplomas.
Meanwhile, programs are getting more selective, and students who might have made the grade a few years ago no longer do. Schools also are ratcheting up quality or starting specialized programs; for many students these programs may represent the best choice, even if it means relocating across the country. It's also worth asking which schools are best at finding students decent internships. Finally, it's not a bad idea to investigate grading practices, since grading curves might hinder the job search.
So, read on. And choose well.
COMPETITION IS FIERCE
1. Once considered a haven for less academically gifted students, undergraduate business programs are raising their standards. With more students beating a path to their doors, many B-schools are boosting their admissions criteria and getting fussier.
At schools with four-year programs, sat and act requirements have gone up. The average sat score for freshmen admitted to the Indiana University business program, where applications nearly doubled last year, is now 1340—up from 1312 in 2005-2006 and a full 343 points higher than the national average for test takers who intend to major in business. At universities with two-year business programs, especially those like the University of Iowa where more than 2,000 declared business majors are waiting to join a program designed for 1,300, gpa requirements in pre-business courses are rising, too.
For students, the higher bar requires a strategic rethink. Many already take standardized tests multiple times to maximize scores. Those with lower scores who are applying directly to four-year business programs are beefing up their applications in other ways, including taking part in extracurricular activities and fund-raisers. Savvy applicants assess the likelihood of being accepted at their first-choice schools and give more thought to less selective "safety" schools.
Those applying to a four-year school with a two-year business program are advised to contemplate what they'll do if they can't find places as juniors. Can credits accumulated in the first two years be transferred to another school? Can one stay put, declare another major, and obtain a minor in business instead?
IT'S A NATIONAL GAME
2. Undergraduate business education used to be a local or regional affair. That's changing. Today, many students attend programs far from home.
Out-of-state schools may provide a broader array of programs than those available in an applicant's home state. They include leadership, entrepreneurship, and global business. A number of schools have launched specialized programs that place students in hard-to-crack industries that are located in the school's backyard—such as sports marketing at the University of Oregon, home state of Nike (NKE) and Adidas, among others; energy commerce at Texas Tech University; life sciences at Wharton; and both cinematic arts and computer engineering at the University of Southern California.
If the academic offerings aren't enough to get the intellectual juices flowing, consider this: Out-of-state tuition at top public universities can be a bargain. Attending a top private B-school like Wharton can easily cost more than $30,000 a year, excluding room and board and other living expenses. A highly ranked public school like the No. 2 University of Virginia costs $25,945; No. 13 University of Texas at Austin is $22,580; and No. 15 University of North Carolina, $18,010.
Many of the public schools have programs that are roughly on par with private institutions—in terms of class size, faculty-student ratios, and other measures. Public schools can also be easier to get into. The average sat score at Wharton is 1430—compared with 1366 for Virginia, 1335 at unc, and 1275 for Texas-Austin.
Sometimes out-of-state schools, public or private, are better at finding grads decent jobs. If a school has established recruiting relationships with specific industries, it may be worth a look—no matter where it is. Are you an aspiring accountant? All of the Big Four firms recruit at Texas-Austin. Aiming for Wall Street? Recruiters for eight financial-services giants are among the 10 top recruiters at New York University. For a would-be "master of the universe" living in Oklahoma who is considering the University of Oklahoma—where no big investment banks recruit—the message is clear: change career goals, or start packing.
3. Internships are a valuable learning experience. Since many employers use them as extended tryouts for full-time positions, they are also an important pipeline to the most coveted jobs. So scoring one ought to be near the top of every undergrad's agenda. Yet not all programs provide the same access to internships. At No. 5 University of Michigan, 92% of undergrads who completed our survey had internships, compared with less than 25% at No. 81 University of Texas at Dallas. And not all internships are created equal. Co-op programs at the University of Cincinnati, Northeastern University, and Penn State allow students to graduate with up to two years of work experience. Elsewhere, a three-month summer internship is the norm.
Why the disparity? For one thing, location matters. To a casual observer there wouldn't appear to be much to differentiate the undergraduate B-school program at Fordham University from that of the University of Denver. Both are private, four-year programs. Tuition and enrollment are almost identical. And in last year's ranking they came in at No. 48 and No. 49, respectively. But at Denver, 57 companies recruited undergrads for internships. At New York-based Fordham: 200. Emily Sheu transferred from No. 4 Emory University to No. 34 (this year) Fordham, where she had internships at Bloomberg and Merrill Lynch & Co. (MER) For her, it was all about location. "Atlanta," she points out, "is no Manhattan."
Students at three- and four-year programs are more likely to take in-depth business courses early, making them more competitive internship candidates. That's one reason why the University of Michigan is phasing out its two-year program in favor of a three-year model. Also, watch out for summer school. When schools schedule classes in the summer before the junior year, having more than one internship before graduation becomes near-impossible.
BEWARE THE GRADING CURVE
4. Are grades really such a big deal? The answer is a resounding "yes," especially for those considering schools like Michigan, Babson College, Oregon, or Pennsylvania, where grading curves are a fact of business school life. Curves designed to counter grade inflation by limiting the number of As in any given class can make it difficult for even high performers to land interviews with some recruiters.
USC's Marshall School of Business grades students on a curve, with professors expected to hold the average gpa to 3.0 in core courses and 3.3 in electives. Most students will get a 3.0, or a B, in each of their 10 core business courses. A handful will earn a slightly higher grade, and the same number will earn a lower grade.
For recruiters trolling B-school campuses, a gpa of under 3.5 will in many cases consign a résumé to the bottom of the stack. At Marshall, most large employers take the grade structure into consideration, so students are rarely passed over for interviews. But for smaller companies not familiar with the school, students are at a disadvantage. David Freeman, a recent Marshall grad, estimates that he missed out on a dozen interviews because he didn't meet the grade requirements companies were looking for. "Without the curve, my gpa would have been high enough to qualify for these interviews," he says.
While a grading curve probably isn't a deal-breaker for students choosing among a handful of schools, it's certainly something that should be taken into consideration. It's worth asking, for example, if the policy is school-wide or if individual professors make their own rules, and whether the curve covers core courses, electives, or both.
Some students say that curves cause morale problems among students, intensifying competition and making it harder to form meaningful teams. Before enrolling in a program, prospective students should find out what, if anything, the school is doing to counter those problems.
By Louis Lavelle, with Geoff Gloeckler and Jane Porter