A NEW GREAT RECESSION MINDSET MAY BE MAKING A GENERATION MORE CAUTIOUS & HESITANT
More than Trump, more than competition from global players, online degree options and specialized master’s programs, the biggest impact may well be a new Great Recession mindset that is making a generation of potential applicants more cautious and tentative. Having done their undergraduate studies during the most painful economic downturn since the Great Depression, they struggled to find employment after racking up often crippling loads of student debt. They witnessed parents and other family members lose their jobs.
Sociologists already have documented the impact of those staggering debt burdens: Delays in the purchase of big-ticket items such as cars and homes, a return to living in their parents’ homes, the postponement of marriage. No wonder this demographic of young people is in no hurry to quit a job, go deeper into debt, invest two non-earning years in an MBA program, and pray that another recession doesn’t occur in time for their graduation from business school.
In this sense, they are not unlike an earlier generation who lived through the Great Depression. Once scared by that experience, many chose a more conservative path through life. They remained frugal, counting pennies and taking few risks with either their money or their professional lives. “People I talk to now seem very hesitant to give up their jobs,” says Julee Conrad, senior assistant director of MBA admissions at Ohio State’s Fisher College of Business. “Talking someone into quitting their job to apply to a two-year MBA program is harder than it was.” Adds her colleague, assistant director Sarah Campbell, “These students remember the struggle they had to find that first job after they got their undergraduate degrees.”
A PREFERENCE FOR GRADUATE PROGRAMS THAT ALLOW STUDENTS TO HOLD ON TO THEIR JOBS
For many of them, the more conservative approach would be to keep their current jobs while earning an MBA part-time. When Iowa Tippie surveyed 693 undergraduate alumni who want to earn an MBA earlier this year, only 7% expressed a preference for the full-time MBA format. Some 82% were interested in online, part-time, and hybrid options.
It doesn’t help that there is a new and challeging question increasingly asked by international applicants, one that had never been asked before: “Am I going to be welcome there?” At the vast majority of business schools, including many of the most elite players, applications from overseas fell last year, resulting in declines in international enrollment. At both Ohio State and Vanderbilt, international students in the newest MBA classs dropped 11 full percentage points, to 25% from 25% at Fisher and to 18% from 29% at Owen (see table below)
Yet, Conrad believes that it could get worse because it was still early for the full impact to hit. “Most students were already planning to apply before the election results,” she says. “Now they are more fully informed about the outcomes.” With an anti-immigration candidate in the White House, a far more profound decline in international applications is possible. Given the already large number of candidates competing for few seats in the Top 25 programs, it seems likely that more of the decline will occur among second- and third-tier schools.