MBA Applications on the Decline? No Need to Panic!
At first glance, the headlines can seem damning.
In May, Forbes questioned, “Is the MBA Obsolete?” A few weeks ago, The Wall Street Journal stirred the pot with a headline declaring, “M.B.A.s Lose Their Luster at Some Schools”.
These articles point out some MBA Applications on the decline in numbers and explore the value of the degree.
Taking in these articles on their Google readers, even the savviest MBA hopeful might feel a twinge of anxiety.
After all, a top MBA degree can come at high monetary and opportunity costs- you certainly want to make sure it’s worth it.
Fortunately, there are several statistics proving the value of an MBA from top B-schools, many of them listed in the same Forbes article asking if the MBA was obsolete.
Despite its ominous title, that article ultimately validated the MBA as a degree rich in value and opportunity.
More on that in a bit, but first let’s talk about why we are seeing some application declines this year.
MBA Admissions Declines: What’s really going on
As mentioned, The Wall Street Journal reported admissions declines at many top business schools. Columbia headlined this report, as their applications declined by about 19%.
Top schools like Michigan’s Stephen M. Ross School of Business and NYU’s Stern School of Business also reported double digit declines.
Other schools reported less significant declines, with traditional powerhouse Harvard Business School registering a 4% drop.
Still others reported flat rates and even upticks in applications; applications at Cornell rose by 14% and UVa’s Darden School marked a 9% increase.
These numbers alone indicate that the reality of the trend is less gloomy than its headlines. However, top schools are certainly seeing some decline, and it is important to explore why.
There are several factors that could be causing application declines, mostly stemming from two broad trends:
-“It’s the economy, stupid”. The economy is dominating American discourse right now, and it is no different for MBA admissions.
In a tough economy, some applicants are hesitant to leave paying jobs and pursue a degree that costs a lot of money. Unsurprisingly, this results in fewer MBA applications.
-More variety. Recent years have seen many more options crop up in the MBA landscape. Some schools, like Wharton, are putting more focus on their one-year MBA programs, trying to capture students reluctant about the traditional two-year commitment.
Joint degree and specialized programs are also on the rise, and are drawing more students away from traditional MBA programs.
These factors explain the declines in application numbers, but they are certainly not a cause for panic. Yes, the economy is tough. And yes, an MBA can cost a lot.
But, an MBA degree from a top school can work to your advantage in a tough economy, bringing rewards that many argue far outpace initial costs.
Justifying An MBA In Tough Economy:
After asking if the MBA is obsolete, the Forbes article makes a compelling case for the relevance and value of the degree. A few favorite statistics from that article:
“Our research shows that full-time MBA graduates from Top 50 schools typically realize starting salaries 50% higher than what they were earning in the year before starting business school. Then, over the next five years, their pay nearly doubles” –Forbes
“… investment in the MBA degree—including tuition and forgone salary—is typically paid back in about 3 ½ years” –Forbes
These statistics, gathered over years of research, paint a rosy picture that can withstand the taint of scattered application drop-offs.
They indicate that, though the numbers might vary year to year, the students that do apply to and attend top MBA programs find great value in their degrees.
So, what do this year’s declines really mean for MBA hopefuls?
Not Much. And certainly not panic.
If anything, it means that today’s MBA hopefuls have far more options to choose from.
With one-year programs, international programs, and specialty programs available, students can more carefully consider their goals and chose the path that best aligns with those goals.
This menu of options also means slightly less competition at top two-year programs. In such a highly competitive atmosphere, even small drop-offs can make a difference, especially for students hovering at the edge of the admissions’ bubble.
So, there’s no need to panic over doom and gloom headlines. The MBA is not obsolete, it is not shrinking into irrelevancy, and it is not losing its luster at any alarming rate.
In fact, it’s a diversifying market striving to succeed and to help its students thrive in a tough economy- for that, we would even say that the MBA degree is gaining a little polish.
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