As MBA programs have gained ascendancy the past few decades, the conventional wisdom has dictated that young professionals take refuge in business programs during economic downturns, adding a credential to boost their prospects in two years when hiring is back on the upswing.
In a recession that has defied conventions, however, some applicants appear to be questioning that wisdom.
As of September, U.S. registrations for the Graduate Management Admissions Test were up just 5 percent through the first nine months of the year, compared to an 8 percent increase for the comparable periods between 2006 and 2007 when the economy was still operating on all cylinders.
While top-echelon programs have yet to reveal any drop off in interest, there is mixed testimony from lower-tier schools that place students in local companies rather than elite consulting and financial firms.
In four years, the University of Bridgeport in Connecticut has built one of the fastest-growing MBA programs in the nation and roughly doubled its enrollment to 500 students, about four in five in the full-time program.
While the school had an increase in applications during the brief high-tech recession of 2001, prospective candidates have proved leery about abandoning jobs to take on student loans in the current crisis, with the future so uncertain.
“People are more spooked this time,” said Ward Thrasher, assistant dean of the University of Bridgeport MBA program.
On the flip side, however, Pace University reported an 18 percent rise in application requests this fall for its business programs, which it runs from campuses in New York City and White Plains.
With both programs accepting a sizeable contingent of students for the spring semester, the schools are ideal Petrie dishes for the current state of the MBA market ”“ and the market for student loans needed by most students to enroll.
Even elite schools clearly were spooked by the turmoil in the student loan market this year ”“ in late October, Harvard Business School issued a press release reiterating that students who need loans would have access to them, and international students would not be required to have a U.S. citizen co-sign their loans, as in past practice.
The timing of the collapse was most inconvenient ”“ as pink slips mount on Wall Street, many top applicants will have to wait for nearly a year before fall matriculation, though some top business schools have expanded January admission as they seek to maximize “revenue” opportunities.
MBA programs have expanded rapidly this decade with a range of enrollment options for traditional and nontraditional students alike, including executive certificate programs that are essentially cash cows for schools, generating much of their income from corporate sponsorship.
Accordingly, MBA applications have increased this decade as the economy gained steam ”“ perhaps counterintuitive given the handsome compensation for young professionals who risk leaving the promotion ladder where they have built sweat equity. Nationwide in 2007, 80 percent of full-time, traditional MBA programs enjoyed an increase in applications, compared to just 64 percent of programs surveyed according to the Graduate Management Admissions Council (GMAC). What”™s more, the applicant pool appeared to improve, with 71 percent of programs reporting better candidates this year than last, and only 4 percent reporting a decline in the merits of their candidate pool.
Some say the sheer volume of layoffs under way or expected will make competition far more ferocious for the current admission cycle.
In the meantime, next spring”™s graduates face an uncertain recruitment cycle.
“I am telling them to have 500 business cards printed up,” Thrasher said. “Get out there and start shaking hands.”
