As reported in The Wall Street Journal last month, even the leading U.S. MBA programs are seeing a decrease in applications to their full-time MBA programs. Harvard Business School, Stanford Graduate School of Business, and MIT Sloan all saw five percent to seven percent drops in their MBA application volume in 2018-2019. Other top programs have even posted double-digit percentage declines.
Overall, U.S. business schools received 135,096 applications last admissions season, down 9.1 percent from last year. Add this to the 7 percent drop in applications in 2016-2017, and you get a somewhat dramatic decline in applications over the past two admissions seasons.
These numbers have been cause for alarm (and news coverage) in many corners, but we’ve seen drop offs–and subsequent rebounds–in full-time MBA application volume before. Clear Admit Co-founder, Graham Richmond offered the following take: “It’s important to remember that MBA application volume always dips during a hot economy–as the opportunity cost to leave the workforce is high. Volume then picks up during sluggish economic periods when jobs become scarce and young professionals seek shelter and insurance by pursuing an MBA.” Richmond also reminds us that “the recent declines in application volume come on the heels of a period of multi-year growth, so it’s not as though we’re anywhere near all-time lows in application volume.”
Big Picture Factors at Play
A 13.7 percent decline in international candidates to U.S. institutions accounts for some of the decreasing application volume. Sangeet Chowfla, chief executive of the Graduate Management Admission Council, tells The Wall Street Journal that “It’s not happening in a vacuum: It’s happening at a time when these global alternatives in other parts of the world are also emerging.” Indeed, and increasing number of Chinese and Indian institutions are offering MBAs, and business schools in Europe and Canada have seen increased application volume over the past several years, all of which suggests reluctance about studying in the U.S. is at play rather than disinterest in the MBA.
A booming domestic job market has also impacted the level of interest in a two-year commitment to the degree. Millennials especially are reluctant to go back to school when they could be earning a salary (to pay off their undergraduate debt) in a full-time position. The growing tech industry may also be a factor, as many jobs in this expansive industry don’t require an advanced degree.
For better or worse, U.S. immigration policy and the strength of the domestic job market are always subject to change, which could well lead to a resurgence of interest in American MBA programs. Business schools are also diversifying their offerings to serve a wider range of students, including specialized Master’s degrees and accelerated MBA programs for candidates with relevant Bachelor or Master’s degrees.
Opportunity for R2
In the short-term, meanwhile, lower application volume might translate to opportunity for MBA applicants. As we shared in a recent analysis of MBA DecisionWire data, the relative scarcity of applicants may be resulting in more schools making admission offers to competitive candidates.
So, candidates who’ve been thinking about pursuing an MBA at a U.S. school may want to consider aiming for Round 2 deadlines this year. And because we haven’t seen any changes in the stats of admitted applicants at the leading programs via MBA LiveWire, prospective students can be assured that the caliber of their classmates will be uncompromised.