The director of MBA admissions at Stanford’s Graduate School of Business conceded today (Oct. 26) that the school’s low acceptance rate is “scaring away” highly qualified applicants. Stanford suffered the biggest drop of any top ten B-school last year, an 8.1% decline in its applicant pool. It was the second consecutive year of falling applications for the school’s highly prestigious MBA program.
Even so, Stanford’s acceptance rate remained the lowest of all the top business schools in the world—just 7.0% of the 6,618 people who applied were invited to enroll in the Class of 2013. The drop in applications only slightly changed Stanford’s acceptance rate. It was 6.8% a year earlier.
Indeed, Stanford is the only top business school in the world with a single-digit acceptance rate due to the school’s stellar reputation, its location in Silicon Valley, and its smaller class sizes. The second most selective top MBA program is at Harvard Business School where the acceptance rate was 12% last year.
‘SELECTIVITY IS A DUAL-EDGED SWORD’
“Selectivity is a dual-edged sword in that it gives you the luxury of selecting a class, but it does have the unintended effect of scaring away some highly talented applicants that should be considering the program that maybe get a little daunted by the admissions rate,” Derrick Bolton, director of MBA admissions, said in an interview with The Stanford Daily, the university’s student newspaper.
He added that when applications rise, admissions rates decrease, often deterring potential candidates from applying the following year because they believe their chances of success are small. The result, according to Bolton, is that applications numbers fall the next time around, and then admission rates eventually go back up, encouraging applicants to try again.
Though not addressed in the article or the interview, another factor that may likely put off some applicants is Stanford’s extraordinarily high GMAT scores for admitted students. Despite the decline in applications, the average GMAT score of the recently enrolled class rose three points to 731, allowing Stanford to maintain its distinction as the school with the highest GMATs in the world. Harvard’s median GMAT score is 730, while Wharton’s is 720. Stanford reported the range of GMAT scores for its admitted students as of June as between 530 and 790.
Dean Garth Saloner, in an earlier interview with Poets&Quants, predicted the applications and yield–the percentage of accepted students who enroll at the school–would go up due to the business school’s newly opened and highly impressive new $345 million state-of-the-art campus.
In any event, Bolton expressed little concern over the drop, which has affected most top schools, including Harvard, Wharton, Chicago Booth, and Northwestern Kellogg. “We’re down from a kind of all-time high,” he told the campus newspaper. “The context is important.”
Over the past ten years, noted Bolton, business school applications have ridden a cycle of ups and downs. In 2002, 5,864 people applied to Stanford GSB. Three years later, the applicant pool fell to 4,582. Bolton told the paper that the most competitive years for admission were in 2009 and 2010 when applications hit 7,536 and 7,204, respectively. Despite two consecutive years of decline, Bolton pointed out that the number for the Class of 2013 was still the third most competitive year in the past ten.
LOOKING FOR ‘REALLY BRIGHT, REALLY ENERGIZED, REALLY THOUGHTFUL, REALLY COMMITTED STUDENTS,’ SAYS BOLTON
“It’s not an important metric in the grand scheme of things,” Bolton told The Stanford Daily. “So when applications are up, that’s fine. When applications are down, that’s fine. My real concern is, what’s the quality of the class? As long as we have 396 really bright, really energized, really thoughtful, really committed students, then we feel good. We don’t define success based on number of applications. We define success based on the quality of the class, and then later, the impact the students have once they go out into the world.”
In the interview, Bolton also took issue with the widely accepted reason why applications are down. “You often hear people say, ‘Oh, it’s the economy,'” Bolton said. “I don’t believe that people apply to business school when the economy is bad. Applications correlate better with census data than with economic data.”
He added that over the last few years, there have been population decreases in areas of the U.S. and slowing population growth abroad from which the school receives large number of applicants.
All told, application volume was down at 21 of BusinessWeek’s top 30 full-time MBA programs. Two-thirds of BusinessWeek’s top 30 business schools admitted a larger percentage of applicants this year, up from one-third the year before. Several top schools bucked the downward trend, including Dartmouth’s Tuck School of Business, Michigan’s Ross School, and UCLA’s Anderson School.