Stampede to Business School Eases
September 24, 2009, 11:27 am
Last October, fresh from the collapse of Lehman Brothers, there were signs that the financial crisis was driving a bull market in business school applications.
A year later, the picture is a bit different. While aspiring bankers and would-be C.E.O.s continue to apply to M.B.A. programs in large numbers, there are signs that the rush to the quad may be easing.
On Thursday, the Graduate Management Admission Council, a business school trade group, reported that applications for business schools seem to have leveled off after a record-setting 2008. Schools participating in the council’s survey reported that 2009 applications for traditional two-year, full-time M.B.A. programs were essentially flat from a year ago.
Most of these programs — 64 percent of them — reported an increase in 2009 applications from the previous year. But that was well below the 80 percent that reported a year-over-year increase in 2008. Interestingly, applications for “accelerated” one-year M.B.A. programs were up sharply this year, with a 21 percent rise in applications, the council said. (The survey was taken in late May and early July, when many schools had not yet reached their application deadlines.)
Another leading indicator seems to be moderating. The number of Graduate Management Admission Tests — a requirement for most business school applicants — that were taken in 2009 rose 7.6 percent, the council said. A year ago, the increase was 13 percent.
What’s behind the deceleration? Well, here’s a brief lesson in business school economics. Demand for spots at business schools tends to increase along with unemployment, as the opportunity cost of leaving the work force goes down.
But there’s a secondary trend: As an economic downturn drags on, the ability to pay for a business school education decreases — and that latter effect may be behind the latest numbers, the council said in a report summarizing the survey.
What’s more, the backlash after the credit boom has led to higher standards for getting some student loans, which could also be crimping applications.
Some might also argue that the recent speculation about capping bankers’ bonuses and tightening financial regulations could be quieting the buzz over going to B-school.http://dealbook.blogs.nytimes.com/2009/ ... own-a-bit/
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