Stanford Graduate School of Business just got harder to get into.
Stanford, whose MBA program boasts the lowest acceptance rate in the U.S., said it received some 7,200 applications this past year. That would translate into a 7.2% increase over the previous year and an implied acceptance rate of just 6.6%–down from 7.1% last year.
Senior Associate Dean Madhav Rajan released the application number on Monday (July 22) in an interview on Fox Business. The television channel is currently running a “Masters of Business” series in which it attempts to profile a top school each day this week at 3 p.m. EST. Much of the focus of the interviews with various deans is on the MBA job market and value proposition of the degree.
MASTERS OF BUSINESS SERIES WILL ALSO INCLUDE COLUMBIA AND BERKELEY
The five-part series, anchored by Liz Claman, focused on Stanford, Tuck School of Business at Dartmouth College, and the University of Chicago’s Booth School of Business, UC-Berkeley’s Haas School of Business, and Columbia Business School.
So far, the first episodes have been riddled with errors of fact and some rather naive assertions. She mixed up the 398 students enrolled in Stanford’s MBA program last year with the 474 accepted. The same mistake was made in the Haas segment. Claman also incorrectly stated that tuition at Tuck was $100,000 a year. It is actually $58,935 a year. She also incorrectly stated that the chief executive of Pepsi is a Tuck MBA. PepsiCo CEO Indra Nooyi graduated with a master’s from the Yale School of Management. Merely because the Booth School recently announced that it would be moving an Executive MBA program from Singapore to Hong Kong, Clamon concluded “you guys are going heavy in Asia.”
After Stanford’s admission figures for last year were cited, Rajan said, “First, the numbers are slightly higher,” said Rajan. “This year I think we had 7200. So our acceptance rate is even lower than the one you mentioned.”
OFFICIAL STATS FROM STANFORD NOT AVAILABLE UNTIL SEPTEMBER
Stanford, however, declined to confirm the 7,200 number cited by Rajan. A spokesperson said the dean “made a ballpark reference. The figure is between 7100 and 7200 so making assumptions about percents could be tricky,” the spokesperson added. “The admissions office does not publish specific stats until the class is seated in late September as the admit numbers and percentages can evolve during the summer.”
In contrast to Stanford, Harvard Business School announced in mid-May that its applications were up 3.9% for admission this fall (see Harvard MBA Applications Up 3.9%). Only last week, Wharton acknowledged that its MBA applications fell by 5.8% (see Wharton’s Record GMATs For New Class). Because Stanford’s entering class is much smaller than either Harvard or Wharton, the school prefers to hold off on releasing its class profile because small differences loom larger in the smaller total.
Asked what “the number one quality every applicant must have before they get considered” for admission, Rajan said “The main thing is we look for people who are distinctive and people that we think will create change. We don’t necessarily mean people who will go on to make a lot of money. It’s about people who will be change agents. Our motto is change lives, change organizations, and change the world. We look for people who we think will have a tremendous impact in whatever they end up doing.”
MBA JOB MARKET FOR STANFORD GRADS EVEN BETTER THAN 2007
Rajan was especially upbeat about the job market for Stanford MBAs.
“The situation for jobs is probably the best it has been in a long time, close to where it was in 2007, probably even better,” said Rajan, who Claman referred to as “the man behind this MBA program.”
“The big change has been that the set of companies that come to recruit is the broadest it has ever been,” added Rajan. “In addition to the usual Wall Street firms, consulting, and corporate management, students can now take jobs in health care, real estate, private equity investing, hedge funds, asset management and also the whole startup and entrepreneurship ecosystem is doing really, really well.”
‘FROM THE THIRD YEAR, GRADUATES ARE ESSENTIALLY MAKING MONEY ON THE MBA DEGREE’
Still, Claman asked the question that many potential applicants ask themselves: “Is it (the degree) worth it because it is not cheap. All in, with housing and student textbooks, etc., it is about $90,000. Out of college, what makes being a Stanford MBA worth it?”
“The $90,000 is the list price,” explained Rajan. “We give significant amounts of financial aid and not just loans. We literally give fellowships. About 60% of the students who come in get a fellowship. The average fellowship is about $26,000 a year. So the actual price people are paying is much lower than those numbers.
“All the statistics are that within two or three years our alumni have made up all the money they spent, including the wages that they gave up by coming to Stanford. From the third year onwards, they are essentially making money on the MBA degree.”
GREAT MBA PROGRAMS ARE ‘THE KINGS OF VALUE PROPOSITION FOR HIGHER EDUCATION’
Paul Danos, dean of the Tuck School, also defended the value of the MBA degree in response to Claman’s questions. “We have to be very careful when we talk about this,” Danos said. “A school like Tuck, or the other great MBA programs, are the kings of value proposition for higher education. Something like 97% or 98% of our students this year have very high paying jobs within three months of graduation.”
Danos, who touted Tuck’s “personalized education” model, also noted the popularity and distinctiveness of the school’s Research to Practice seminars, which allow MBA students to dive deep into a faculty member’s research, including one called Deconstructing Apple. “It’s all about Apple,” explained Danos. “Most courses give you cases on many different companies. This course gives you different views of Apple from beginning to end and asks the question, ‘What is really key to their success?’ That is saturation in one company. Some of our most popular courses are these courses that take a trip with the faculty deep into a topic.”
Sunil Kumar, the dean of the Booth School, also was emphatic in defending the value of the degree. “First, you don’t measure the value of the degree by just the starting salary in the very first year after you graduate,” Kumar told Clamon. “You measure the value of the degree by the net present value in terms of increased income over the rest of your life or your career. And you also measure it by the kinds of career opportunities will open up for you. On that dimension, there is absolutely no doubt in my mind that a top program like ours will pay itself back many times over. And at Chicago, we believe in markets, of course, and the market response for us validates this. Our applications were up 10% this year.”