Between administering the GMAT and performing annual surveys of B-schools, alumni, recruiters and applicants, it’s safe to say that GMAC is an organization with a finger on the pulse of the MBA market.
Recently, the CEO of that organization, Sangeet Chowfla sat down for an interview with Poets & Quants, giving his thoughts on current global trends in graduate business education.
One of the interview’s central topics was the decline in applications that many top US business schools reported this year.
Chowfla highlighted that the decline paradoxically comes at a time when an MBA leads to historically high salaries. “If you look at outcomes, this year we reported that starting salaries were at their highest level ever and a significant majority of recruiters say they want to recruit more MBAs,” he explained.
So why did so many US schools report a drop in applications?
Chowfla sees several converging factors: a “geography shift” where European and Asian programs have become increasingly popular internationally, and a “strong economy” domestically in which “candidates are reluctant to give up their jobs to go to a full-time format.”
Chowfla anticipated that “if you think about it from domestic applications, we will see some recovery when the economy turns” since “people tend to go back to university” and “invest in themselves” during recessions.
A potentially more serious trend, according to Chowfla, is a drop in international applications that may be linked to a rising sense of nationalism. He framed “economic nationalism and educational nationalism” as “a threat to the vibrancy of our degrees.”
This problem, he added, is “particularly relevant in business education because it is so experiential.” Ultimately, Chowfla said, it’s students who pay the cost of a less global approach because they “lose out on the opportunity to learn from each other.”
Another question going forward that Chowfla raised is where tuitions at top B-schools will go from here.
Chowfla noted that “we have seen leading schools announce price freezes for competitive reasons” and highlighted online MBA programs with lower tuition fees as an option that might put some downward pressure on full-time MBA costs.
All of these trends, Chowfla pointed out, should be understood in the context that top US business schools remain very selective.
He explained that “regardless of all these effects on application volume, the median top MBA program in the U.S. still received six applicants for every available seat. And eight of 10 of them reported that the applicant pool was of equal or better quality than the previous year.”
What’s new, then, is not the outcome associated with a top MBA education or the competitiveness of the application process. Rather, it’s how applicants weigh decisions about where to attend business school, what type of program fits their needs, and how to obtain an appropriately international experience.
We can help you think through these questions and give you feedback on what schools might be a good fit for your application. If that sounds helpful, contact us and ask for a free application assessment!