Columbia MBA Apps Plunge 19%

by John A. Byrne on

Columbia University

Applications to the MBA program at Columbia Business School plunged by 19% last year, an unusually high drop even in a year when applications were down overall. The school’s numbers were revealed yesterday (Aug. 28) when Columbia posted a profile of its incoming Class of 2014.

The school said applications for both its August and January admit clusters dropped by some 1,260 applications to 5,409 from 6,669 only a year earlier. It follows a much smaller decline in the previous year from 6,885 applicants. The 19% fall vastly exceeds the downturn at other elite business schools. At Harvard Business School, for example, applications fell 4% last year to 8,963. The University of Pennsylvania’s Wharton School was essentially flat last year, with a slight drop of less than one percent: 6,408 last year compared to 6,442 a year earlier.

When the Graduate Management Admission Council (GMAC) releases its annual application trends survey in mid-September, full-time MBA application volume is expected to fall for the fourth consecutive year. But it’s rare when a top-ranked business school reports a single year decline of nearly 20%. Most business schools report their data later in September.

Columbia’s fortunes, however, have long been linked to Wall Street and finance, a still troubled sector of the economy where employment opportunities have fallen. Potential MBA applicants from the finance industry are holding onto their jobs and delaying business school, while financial firms are hiring fewer MBAs. So the school’s dependence on the financial services industry is imposing a bigger downturn than most of its rivals have seen.

Amir Ziv, vice dean at Columbia, acknowledges the problem in a brief interview with Bloomberg BusinessWeek. “There’s merit to the argument that if the financial industry isn’t doing well, it should hit schools that are more exposed to it than others,” explains Ziv. “In the long run, if it’s not doing well, you’ll have fewer students interested in schools that are excellent in finance.”

COLUMBIA’S DEPENDENCE ON THE FINANCIAL SECTOR MOST LIKELY CAUSED THE OUTSIZED DECLINE

This year, some 34% of Columbia’s incoming class came from the financial sector, compared with 20% from consulting and 8% from marketing and media. At Harvard, only 28% of the incoming class hails from finance, with 16% from the comparatively more healthy venture capital and private equity sectors.

New York University’s Stern School, also another school closely tied to Wall Street, is reporting a double-digit fall. Applications to Stern fell by 11.5% last year to 3,907 from 4,416. according to newly released numbers on its website.

Why the difference between Columbia and Wharton, the school which U.S. News and World Report along with a number of other rankings lists as best in the world at finance? Over the years, Wharton has successfully moved far beyond its finance reputation and more into a competitive sphere with such elite general management business schools such as Harvard and Stanford.

Among B-school deans who were asked by U.S. News to name the best schools by category of study, Wharton does significantly better than Columbia in one key business discipline after another. Wharton ranks third in general management (Columbia is 10th), second in marketing (Columbia is tied for ninth with NYU), third in accounting (Columbia is 27th), fifth in entrepreneurship (Columbia is tied with Rice University for 14th), and second in international business (Columbia is fifth).

WHARTON’S GENERAL MANAGEMENT THRUST PROTECTS IT FROM A FINANCE DOWNTURN

And Wharton, unlike Columbia, has been the beneficiary of an aggressive admissions strategy that has made it the leader among the elite B-schools in female enrollment. Some 42% of this year’s incoming class at Wharton is made up of women, just three percentage points below the Wharton record of 45% a year earlier. That significantly broadens the appeal of the school because women tend to prefer jobs outside of the finance world in consulting and marketing.

The near-20% fall in applications at Columbia pushed its acceptance rate considerably higher than 16%, its rate for the Class of 2013. Though the school has yet to announced this number, the acceptance rate for the class could be 20% or more, something that could impact the school’s future rankings, particularly at U.S. News & World Report which weights student selectivity in its methodology.

Despite the significant fall in applications, Columbia managed to maintain the high quality of its incoming crop of MBA students. The school said the average GMAT score for the incoming class was 715, down just one point from the 716 average last year. The middle-80% range of Columbia’s scores was 680 to 760, exactly the same as last year. The average undergraduate grade point average remained the same: 3.5.

Incoming students brought an average five years of work experience to Columbia, with the middle 80% ranging from three to seven years. Some 99% of the class has at least one year of work experience, according to the class profile. The average age of a new student at Columbia is 28, with the age range from 25 to 31.

The school said its August entry class totalled 545 students divided into eight clusters, while its January entry class will have 196 students in three clusters. Some 38% of the class is composed of international students, while women also make up 38% of the incoming class. About 35% are minorities, according to the school.

DON’T MISS: SCHOOLS REPORT FALL IN MBA APPLICATIONS AGAIN or GPAs & GMATs: WHAT YOU NEED TO GET IN

  • GG

    Maybe the portrayal of some professors and the dean of CBS in “Inside Job” also had their effect

  • Paul Bodine

    Re: “Why the difference between Columbia and Wharton, the school which U.S. News and World Report along with a number of other rankings lists as best in the world at finance? Over the years, Wharton has successfully moved far beyond its finance reputation and more into a competitive sphere with such elite general management business schools such as Harvard and Stanford.”
    To be fair, Columbia’s ‘failure’ to diversify its image is not for want of trying. For those willing to look beyond the easy identification of CBS and Wall Street, Columbia Business School has long been famous for and aggressively touted its social enterprise and international business (Chazen Inst. etc.) strengths, among others. On some level, CBS has been less successful than Wharton in separating itself from its finance image because applicants won’t let it: they equate Columbia (and NYU) with Wall Street and see them as (only) springboards to Wall Street jobs. Being located in NYC can be a curse as well as a selling point …
    –Paul Bodine, http://www.paulsbodine.com, Great Applications for Business School

  • at

    Thats strange because Mckinsey alone hired 70 candidates from GSB last year. BCG, Bain and other consulting firms also picked up lots of candidates

  • mindbullet26

    Inside Job was released in early 2010.

  • mindbullet26

    I think the answer is pretty simple. Applications surged dramatically following the financial meltdown in 2008, and the most affected industry was the financial sector which is based primarily in NYC. Now that its calming down a bit, I think its only normal that the trend gets back to normalcy. Schools probably most affected will be Columbia and NYU given their location. In fact, last year Stern had 5222 applicants, this year its down to 3907, thats a 25.2% drop.

  • prusd

    The startup-tech scene is also expanding rapidly in NYC and across parts of the northeast. For the most part, it might also appear that people are realizing that you don’t need an MBA to start a business or be an entrepreneur. Also, most start-up employees don’t need MBA’s to be successful in their positions. Why drop $150,000 on a business degree and then be saddled with debt when you can start a business with the help of friends, family or investors?

  • bschool guy

    did the sautrday only class distrupt full-time MBA applicants as they compete for the same profile (age range)?

  • JohnAByrne

    Not sure where you are getting your data. Stern says it had 4,416 applicants to its full-time MBA program–Not 5222. That could be the number for the previous year. So the decline to 3907 is an 11.5 percent drop, as noted in the story.

  • JohnAByrne

    That film certainly didn’t help and it gained widespread acclaim and a lot more eyeballs after it won the Academy Award for best documentary in February of 2011, likely impacting yield numbers (the percent of admits who enroll) as well.

  • JohnAByrne

    Very good point, Paul. Thanks for adding that extra perspective.

  • fg

    CBS gets lots of intl’ applications from Europe, more so than other schools. and with the european debt crisis. that could have also contributed

  • amake

    “This year, some 34% of Columbia’s incoming class came from the financial sector, compared with 20% from consulting and 8% from marketing and media. At Harvard, only 28% of the incoming class hails from finance, with 16% from the comparatively more healthy venture capital and private equity sectors.”

    This quote is misleading. Columbia’s class profile reports that 29% of incoming students come from financial services and 5% come from private equity. If you’re going to separate these for Harvard, you should also do so for Columbia.

    Also, the class profile suggests a fairly broad representation of incoming students from nonprofit, military/government, tech, healthcare, energy, real estate, etc. (perhaps more than in the past). Yes, finance will always be the #1 represented background of incoming CBS students (and the #1 target industry of outgoing students), but there are many other reasons students choose Columbia, e.g. consulting, social enterprise/international development, real estate, media, entrepreneurship, etc.

    All that being said, these numbers are quite a hit for Columbia.

  • JohnAByrne

    The 28% number for Harvard does include the 16% from venture capital and private equity. Otherwise, Harvard’s financial services number is only 12%. As an interesting contrast, meantime, only five percentage points of the 34% in finance at Columbia come from PE. The school doesn’t separate out venture capital.

  • Faisal

    As an international student, i may add that Columbia’s lack of ‘no co-signer loan’ for international students puts off many non US applicants. I know a few applicants who ruled CBS out for this reason. On average, Columbia also award smaller grants to students and CBS graduates have one of highest average debt.
    I concur that CBS is piggy-backed on finance as evidenced by recruiters and target industry. Unlike Wharton, CBS has not broadened its recruiters outside finance. Finally, CBS has the least impressive facilities among its peers.

  • JohnAByrne

    Thanks very much for your contribution to the discussion here. I think the issues you raise are very pertinent to the discussion, especially the lack of a no co-signer loan for international students, the smaller scholarship grants, and the least impressive facilities. The latter part will certainly change but not for a few years.

  • DJ

    Could be, but I for one crossed CBS off the list after seeing that documentary and I plan to apply next year. While the impact of finance jobs clearly outweighs everything, reputation hits like “Inside Job” do nothing to help the school.

  • golfer

    very good point indeed. In Fact, Classroom discussions at CBS are often a very healthy mix of for profit and non profit

  • Galina

    Good point on Columbia’s absent ‘no co-signer loan’ for international students, this is a dealbreaker for most internationals who need funding. I attended a CBS presentation abroad and this was the main concern among other applicants. Currently only wealthy internationals can afford to enroll at CBS. Given the aforementioned disadvantages, internationals can opt for other excellent MBA programs such as NYU, Booth and Wharton.

  • Keen1

    I also think it has something to do with the film “Inside Job”. I really do think it damaged CBS’s reputation (I mean you can only ignore it’s linkage to the film so many times until you look into it and realize how damaging it is). I watched that film with my parents and I could not bring myself to apply to Columbia (if I went there my parents would’ve been surprised and disappointed at me since we shared so much anger at those clowns in the film). Several CBS alums told me they were embarrassed and upset at the school for not firing those professors to restore CBS’s integrity.

  • Beckie

    John,

    GMAT scores and work experience are always a pluginsky ! Schools never give accurate numbers, ditto starting salaries for grads. The MBA in general is sort of yesterday’s news now and it is hard to believe that GMAT average, not buying it. Look back at Columbia’s GMAT average over 20 years and the admit size.

  • Cutie

    Hi all,

    as a second year CBS student I would like to confirm that the school is indeed (probably) the most expensive school out there. Being an international student I had to pay everything myself and I’m pretty sure the lack of loan options hurts the application numbers.

    Given how many of my classmates come from very very wealthy families and another portion of the class made good money on Wall St or elsewhere before school, no one raises these issues at the school. I heard people saying that there are too many people who apply and have no business applying anyway, or that even after the huge drop this year it’s still one of the most selective schools so who cares.

    Before school I wanted to end up at a hedge fund and the school did a good job hooking me up with a few of them, so I got my dream job + a huge network in investment management, even from my colleagues alone. Most of my classmates also got what they wanted (not just any job), so looking back I don’t think I’ll ever regret paying so much money.

    When I got here, I thought the school looked like an upper-class club – most of the students had not looked at a ranking, nor did they care about acceptance rates or female %. The upside to that is that you get a pretty solid “1%ish” network.

    I just feel that the school could do more to get people who cannot afford to pay everything up front. The school is pretty much huge in finance but the marketing department is actually the next best area and only a few people know how good it is outside of the recruiters (I didn’t know before I got here).

    Since I wanted to go into investment management, there was simply no other school I wanted to go to, so I started saving early. Being in Manhattan also means that students can work part-time (many students do) so this reduces significantly the overall financial burden.

    I saw the inside job movie before I applied to CBS and honestly it only upped my interest in the school :), so I don’t think it played any role (+ its not fair to say that its just CBS and HBS students who go to the BB banks – every single top 20 school does the same, so it’s a stupid accusation anyway)

    I hope this helps any applicants.

  • Chris

    In NYC, the recession hit hard, not only because of job losses
    and pay cuts but also fears for the future. I had been considering going to
    B-school for a while so when the recession hit I decided to go back to school. After
    doing lots of research I realized that the two schools I was considering for my
    MBA NYU and Columbia were getting way to many applications for me to be accepted
    so I didn’t even bother applying. Due to family obligations I had to go to a
    school in NYC. I decided instead of going to B-school to do a master’s in
    finance and then a master’s in management. I know lots of people that went back
    to school during that time period. Many of my friends, where either rejected
    from their top choice(s) MBA program and went to a lower ranking MBA program or
    did a specialized master instead. I think when looking at applications rates in
    NYC it has to be looked at by how many people got masters during that time
    period. There was such a rush to school that many people who might have waited
    decided not to. Now these people already have masters so there is no need for
    them to get an MBA, which could be reducing the application pool.

  • John

    Columbia has just started to offer no-cosigner loans to current international students:

    “It is with great pleasure that we announce the ability to assist our current international students with a no-cosigner loan program! Over the last few months, we have been working with a UK-based company called Prodigy Finance to create a solution for the current first and second year students in need of a loan.”

  • mediachick

    Can you please confirm this with a link? This is huge, personally

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