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Columbia MBA Apps Plunge 19%

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.

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