When you hear that the top business schools are reporting decreases in applicants, you might think the worst. Plenty of pundits have been blathering for the last couple of years about how the recession will affect college-bound kids. Apparently the rising costs of tuition are going to create an environment in which only the wealthy elite will have a crack at a higher education, further fragmenting the growing rift between the upper and lower classes. But if the 24-hour news cycle has taught us nothing else, we should know by now that the media operates on approximately the following ratio: 20% actual news, 30% repetition, and 50% speculation. In short, they’re jabbering to fill air time. So while you might think that a drop in applicants for MBA programs is evidence of the media hype coming to fruition, the truth is actually far more encouraging. There are simply more options for students these days, including institutions that are far more affordable than the top business schools.
According to a report issued by Bloomberg Businessweek, nearly half of the top 30 business schools have reported a smaller pool of applicants this year, with some even failing to meet their enrollment goals for MBA programs. And the statistics don’t lie. The Fuqua School of Business at Duke University listed a 7% drop in applicants, the number of students seeking admission at Yale’s School of Management dropped 9%, and the Kelley School of Business at Indiana University saw a whopping 21% reduction in MBA applicants. But this alarming trend is not a result of the recession, according to the schools themselves. They blame the growth of alternatives for their troubles.
While it is true that the recession has made it more difficult for some students to attend top-tier schools, many are simply looking at a long road of student loans ahead of them (not to mention job prospects after graduation) and opting to make wiser spending decisions by choosing schools they can afford. And with more colleges offering MBA programs and accredited online schools springing up and giving students the flexible schedules, lower tuition, and telecommuting opportunities that many find appealing, expensive business schools don’t stand a chance. But that’s not all; these schools are trying hard to poach students that might otherwise go to more highly rated universities. While more options have sprung up over the last few years, the relative number of students seeking admission to MBA programs has stayed about the same, which means competition to lure the student body has increased.
This is great news for students seeking a master’s in business administration (or those that wish to become a master in taxation, marketing, or some related field). They are now being wooed with attractive offers that could include extremely desirable incentives like bulky financial-aid packages or even scholarships from second-tier and other schools. And many rival programs are offering part-time and online options as a further draw. For top-ranked schools that provide only full-time programs, little student sponsorship, and a high level of competition for admissions, this could be a wakeup call. They may need to change their business model if they want to see a return to their previous numbers of MBA applicants.