What Fewer Applications to U.S. Business Schools Means for MBA Hopefuls

Over the past year, demand for a business school education has fallen in the U.S. A recent survey conducted by the Graduate Management Admission Council reveals that about 10,000 fewer people applied to U.S. graduate business programs starting in 2018 than in 2017, with the most significant drop coming from international students.

Among the 405 U.S. graduate business schools that participated in that survey, the total number of applications submitted to these schools was 6.6 percent less for their 2018 programs than their 2017 programs. In contrast, the number of applicants to graduate business programs outside the U.S. increased between 2017 and 2018, rising 8.8 percent at Asian programs, 7.7 percent at Canadian programs and 3.2 percent at European programs.

Of the 400 U.S. graduate business programs that reported how many domestic and international applications they received, the total number of international applications collectively was 10.5 percent lower than it had been the year before. Domestic applications to these institutions also lessened, but to a less dramatic extent: a reduction of 1.8 percent.

[Read: How to Get Into Multiple Top Business Schools.]

Bill Boulding, the dean of Duke University’s Fuqua School of Business and chairman of the board of directors at the Graduate Management Admission Council, says one noteworthy aspect of this drop in application volume is that it has not only affected mid-ranked B-schools, but also top-ranked B-schools.

“The big change in what we’re seeing this year is that applications have gone down for some schools in the past, but this time, you’re seeing applications down at Duke, Harvard, Wharton, Stanford and so on,” he says.

Why Is This Happening?

The hot U.S. job market. An improving U.S. economy has made the opportunity cost of attending business school higher for U.S. workers than it was when the economy wasn’t quite as good, suggests Graduate Management Admission Council’s media relations director, Geoffrey Basye. “From a U.S. domestic prospective, historically, U.S. business school application volume has run countercyclical to the economy,” Basye wrote in an email. “In times of higher unemployment or job loss, people often go back to school. In times of full employment or high GDP growth — like right now — opportunity costs are higher to leave a job and return to school.”

Politics. “From an international perspective, negative perceptions about the U.S. political environment continue to keep some students away,” Basye wrote. “Multiple surveys taken from the fall of 2016 through 2018 show that roughly four in ten potential students have reconsidered pursuing degrees in the U.S. as a result of the current environment.”

New business schools outside the U.S. Universities around the globe are offering an increasing number of graduate business programs, which means there are a rising number of alternatives to U.S. business schools, Basye wrote. “Graduate management education continues to develop globally, offering candidates more options in places outside the United States.”

Cost concerns. Alexander Lowry, the executive director of the master of science in financial analysis program at Gordon College, says the cost of two-year MBA programs is a barrier for many prospective business students, leading some cost-conscious students to opt for specialized business master’s degrees instead of MBAs.

[See: 10 Business Schools That Trained Fortune 500 CEOs.]

“Young people no longer want to spend that much time and money on grad schools — they now prefer the fast and more affordable one-year alternative programs,” Lowry wrote in an email. “But for those bent on getting the traditional MBA, it’s the best time in years to apply to a top school. Fewer applicants mean better odds.”

Changes to U.S. immigration rules. Boulding says the biggest reason behind the decrease in the number of applicants to U.S. graduate business schools is a shift in federal immigration policy, which has discouraged international students from applying to U.S. schools.

“The issue is, if you’re going to pay U.S. tuition, are you going to be able to stay and get U.S. salaries post-graduation?” he says.

How Will This Affect the Typical Applicant to a U.S. Business School?

MBA admissions experts say the drop in application volume at U.S. business schools means the admissions process at these schools will be less competitive than it has been in the past. However, experts warn that U.S. MBA programs that sit at the top of the U.S. News Best Business Schools rankings tend to be extraordinarily selective, so even if these institutions are slightly easier to enter than they were before, it will still be very hard to get into these programs.

“It’s still extremely important to have that mindset that these are very, very competitive schools,” says Shaifali Aggarwal, founder and CEO of boutique admissions consulting firm Ivy Groupe.

Business school admissions experts say top-ranked business schools will be less impacted by the decline in application volume than lower-ranked institutions.

“I do not think we are going to see much of a change when it comes to the top-tier programs,” Lindsay Badeaux, senior assistant director of admissions at the University of Chicago’s Booth School of Business and an MBA admissions counselor at the IvyWise admissions consulting firm, wrote in an email. “They will likely continue to attract the best talent and retain their competitive applicant pools and lower acceptance rates. The bigger impact is going to be with the second-tier B-schools and smaller MBA programs, so applicants should continue striving to curate a realistic list of Reach, Target and Likely schools based on their specific backgrounds and goals.”

Badeaux says the steep drop in the amount of international interest in U.S. business schools means these schools are eager to enroll international students. “Most U.S. schools are seeing a drop in the number of international applicants, so it’s going to be a good year to apply for those outside the U.S., as international applicants may stand out more than usual in a competitive applicant pool,” she says.

Marc Endrigat, director of MBA admissions at the University of Hawaii–Manoa’s Shidler College of Business, says B-schools are more inclined to be forgiving of applicants’ shortcomings during time periods when there is a shortage of applications.

“Most MBA programs have enrollment targets that work best for their specific program/teaching style/culture, so lack of appropriate numbers can lead to some ‘wiggle room’ when it comes to admission standards,” Endrigat wrote in an email. “An applicant who did not make it off the waitlist during a year with many applications could definitely be a more competitive applicant during a year when the same program is a little short of meeting its enrollment target.”

Endrigat adds that business schools tend to be more generous with scholarship dollars during years when they don’t receive a large number of applications. “Applicants may receive little or no scholarship during a competitive application year, but in turn could find an MBA program made much more affordable through scholarships during a year when that program is receiving fewer applications,” he wrote in an email.

[Read: What It Takes to Get Accepted at a Top MBA Program.]

In the end, he says, a business school applicant will probably fare better in the admissions process during a year when he or she has fewer people to compete against. “The bottom line is that a basic concept from business school applies to business school (applications),” he wrote. “If supply is high and demand is low, it generally works for the consumer which, in the case of an MBA program, would be the applicant.”

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