Applications to American M.B.A. programs dropped for a fourth straight year, with even elite universities starting to show signs of struggling to lure young professionals out of the strong job market.
For the first time in nearly a decade, waning interest in the traditional master of business administration degree hit business schools that draw the most applications, including Harvard and Stanford universities, according to a survey of 360 schools by the Graduate Management Admission Council, a nonprofit that administers the GMAT admissions exam. Those top-tier programs were until recently thought to be immune to the shakeout plaguing less-prestigious programs.
Americans are saddled with more college debt than ever, and they have grown increasingly reluctant to leave behind jobs for a year or more to pursue one of the nation’s most expensive degrees, school administrators say—particularly as the economy has improved. In response, schools in recent years have launched cheaper, more flexible or more customized master’s degrees in hot areas such as data science and supply-chain management.
The decline in M.B.A. applicants hadn’t affected top business schools until now, even as smaller programs such as those at the University of Iowa and Wake Forest University closed their flagship two-year programs citing weak demand. A handful of large, top-tier M.B.A. programs such as Harvard Business School and the University of Pennsylvania’s Wharton School last year received a little more than half of all business-school applications, according to recent GMAC data.
“People are thinking, ‘Oh my gosh, if the top is struggling to find applicants, what are the rest of us going to do?’” said George Andrews, director of admissions at Rice University’s Jones Graduate School of Business, which saw a 27% drop in full-time M.B.A. applications to 587 this year.
Sangeet Chowfla, GMAC’s president and chief executive, said it is possible business-school applications are bottoming out as the U.S. economy approaches its peak and could rise again in the next recession. But more competition from high-caliber schools in Asia and Europe, combined with the Trump administration’s heightened scrutiny of work programs for international students, could continue to squeeze American business schools, he said.
World-wide, the number of M.B.A. applications was flat from 2017, partly because of an increase in students looking to pursue their degrees in Europe and Asia, according to the GMAC survey. Applications surged 8% to schools in Canada and 9% to schools in East and South Asia.
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