MBA Apps Down 3% to 10% This Year

by John A. Byrne on

Peter von Loesecke, CEO of The MBA Tour

Despite a vastly improved job outlook, applications to full-time MBA programs at top schools are expected to take yet another tumble when B-schools report their numbers this fall.

“School with large numbers of applications are down anywhere from 3% to 10%, maybe more,” said Peter von Loesecke, chief executive of The MBA Tour. His estimate is based on recent conversations he has had with admission officials at more than two dozen schools in past three months. The MBA Tour organizes trips to both cities and countries with B-school admission staffers to provide information to potential MBA applicants.

If Loesecke is right, it would be the second consecutive year of declining applications. Last year more than half of the full-time MBA programs in the U.S. received fewer applicants than they had the previous year, according to the Graduate Management Admission Council (GMAC). In comparison, only one-third of participating U.S. programs reported a decline in 2009 over 2008.

At Harvard Business School, applications for this year’s incoming fall class fell by 4% to 9,134 from 9,524 a year earlier. Unlike most business schools, which will report their numbers in September, Harvard released preliminary figures last week. The drop is not exactly a surprise. As long ago as last October, Stanford’s director of admissions, Derrick Bolton, had predicted that applications could drop as much as 10% at the best business schools this year.

“Applications are down in particular because people are having a hard time justifying the investment,” believes Loesecke. “Part-time programs may be a better alternative for them because they can hold down their jobs and not have to through the pain of a job transition.”

Another concern, he said in an interview with Poets&Quants, is the mounting debt students are taking on to pay higher and higher tuition fees. “We’re starting to see a lot of students who get into the age range of considering an MBA still paying off their undergraduate loans,” says Loesecke. “Many of those are looking at this and asking if they need to take on this level of debt again.”

Ironically, however, a new global survey by The MBA Tour is further confirmation of a significant improvement in jobs prospects and an increase in satisfaction with the school’s efforts to find employment for their MBA graduates. In 2009, more than one quarter of the MBA graduates enrolling in U.S. programs said job prospects had worsened for them when compared to the previous graduating class of 2008. In 2010 that number dropped to 8.3% and for those graduating in 2011 it dropped to zero.

The MBA Tour survey showed that a large part of the improvement could be attributed to the growing efforts of B-school career service offices. Many schools became more pro-active in convincing new companies to recruit their students, and many more worked to cultivate networking by students with alumni. At UCLA’s Anderson School, for example, career center staffers visited 55 companies that did not have a previous relationship with the school.

Between 2009 and 2011, the number of graduates who were not satisfied with their school’s efforts to find them employment dropped by 21%.

The proportion of graduates very satisfied with their program’s efforts nearly doubled from 14% to 26% this year. Loesecke says that if you included MBAs who were “satisfied,” the percentage would jump to more than 70%.

The MBA Tour study is based on 276 respondents, 60% of which were based in the U.S.

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  • Johnnie Welker

    This is an economic problem with quite simple answers:
    1- MBA schools attract employed individuals: well, employment situation seems better and less scarier than 2 years ago now.
    Other things that can have a slight effect
    2- Population of the US has not grown much for the past 2 years.
    3- More foreign students are looking at foreign schools
    4- More students are shying away from the MBA programs since they are hearing that if they are not TOP 10 caliber they will not get a job after their 2 years. And the past 2 years admissions rate for the top 10 schools are all under 25%

  • TonyW

    With the opportunity cost spent earning an MBA, I could buy a nice house with no mortgage, paid full in cash. An MBA only makes sense if you’re trying to do something really risky like switch careers.

  • BS

    I doubt it, Tony.

  • Brani

    Why do you doubt it BS? The opportunity cost is around 150k + at least.

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