Schools Report Fall in MBA Apps Yet Again

Full-time MBA application volume fell for the third consecutive year despite continued growth in applicants from China and India, the Graduate Management Admission Council (GMAC) said today (Sept. 13). The news comes in GMAC’s annual application trends survey and follows earlier reports of application declines at Harvard, Wharton, and the Johnson School at Cornell.

About two-thirds of two-year, full-time MBA programs reported decreases in applications this year compared to 2010, according to GMAC. Larger programs seem most affected by the decline. GMAC said that half of the MBA programs with 50 or fewer students reported increased applications, compared to only 20% of larger programs. The average number of applications received by the reporting schools fell to 666, from 695 reported in GMAC’s 2010 survey results.

GMAC said that MBA application volume historically trends counter-cyclical to economic conditions. “There appears to be a reverse cyclical effect,” one unidentified B-school respondent told GMAC researchers. “In other words, as the economy improves the number of applications goes down. We also had a very strong application year in 2010, so it may just be a balancing of our applications to a more typical number.” Many admissions officers told GMAC that as the economy gets better, potential applicants are less likely to leave their jobs to attend a full-time program.

As reported earlier by Poets&Quants, applications at Harvard Business School were down 4% in 2011 over 2010, while applications at Wharton fell by 5.7%. The Johnson School at Cornell reported an 8% drop in applications. The University of Virginia’s Darden School of Business said applications fell by roughly 10%. Most schools will publicly report their numbers later in September.

Surprisingly, however, GMAC said the quality of applicants–judged by GMAT scores, undergraduate transcripts and work experience–are the same or higher in 2011 compared with last year for 89 percent of full-time MBA programs, where 39 percent of programs reported that applicants were more qualified than the previous year and 50 percent said applicants had the same qualifications. Despite the decline in applications, acceptance rates across the GMAC sample of responding schools remained the same as 2010: 47%, just one percentage point above the rate in 2009 and 2008.

“The caution in this year’s survey for full-time MBA programs is unsurprising in the current economy as students weigh the financial and time commitments required to pursue a graduate business degree,” said GMAC President and CEO Dave Wilson in a statement. “It’s also worth noting that registration volume for GMAT testing has grown sharply over the last several months, one indication of student demand that might benefit schools as they head into the next admissions cycle.”

Interestingly, full-time MBA programs in Asia Pacific reported the largest decrease in applications. GMAC said 78% of the programs in the Asia-Pacific region had falls in application volume, compared to 68% in Europe, 64% in Canada, and 61% in the U.S.

Other key findings:

  • 83% of masters of finance programs report applications are up, along with increased applications reported by 69% of master’s in management and 51% of master’s in accounting programs.
  • The majority of part-time programs (54%) said that application volume was the same or greater than the previous year; and 58% of Executive MBA programs saw the same or increased volume.
  • The share of international applicants to two-year full-time MBA programs jumped to 45% from 39% of incoming talent in the past year. Applicants from Asia-Pacific now account for 61% of the international students applications to full-time MBA programs in the United States.
  • India continues to contribute the most foreign applicants to two-year full-time MBA programs, with 61% of programs reporting that India is their top source of foreign talent.

The application declines would have been worse if not for an influx of foreign talent in the application pool. Full-time MBA programs overall saw a significantly higher percentage of foreign applicants in 2011 than in 2010, GMAC said. Nearly three-quarters of 2011 two-year full-time MBA applicants were from outside a school’s local area–with 45% of the applicant pool coming from outside the country.

“This is a significantly larger proportion than in 2010, when only 39% of the applicants were international,” GMAC said. “Applicants from Asian-Pacific countries accounted for 57% of all iternational two-year full-time MBA applicant volume at U.S. programs. U.S. programs reported an average of 28% of their ‘international’ applicant pool consisted of foreign citizens already residing in the United States.”

A total of 649 programs from 331 business schools and faculties worldwide, representing 45 countries, 42 states and the District of Columbia, participated in the annual study, which is conducted from early June to mid-July every year.