“It’s good to be king” is more than a wry quip from a legendary comedian. In all walks of life, including graduate business education, it’s better to be on top and in charge. These days, amid what many consider troubled waters for MBA programs, the M7 — the “Magnificent,” or “Magic,” 7 schools long considered the elite of the elite — have had mostly smooth sailing.
Mostly — but not entirely, as the data show once again this year.
Yes, the M7 — Harvard Business School, the Wharton School at the University of Pennsylvania, Columbia Business School, Northwestern University’s Kellogg School of Management, the University of Chicago’s Booth School of Business, Stanford University Graduate School of Business, and MIT’s Sloan School of Management — are ranked in the top 10 in just about every ranking that matters of U.S. schools, and in the top 20 globally. And even as forces beyond the control of the masters of the biz ed universe buffet mid- and lower-tier schools’ MBA programs, the M7 continue to be bastions of strength, in admissions as well as academics. They are talent magnets, and probably always will be.
But even kings have their problems. Looking at the bundle of 2018 school data, amid the usual mountain of superlatives is at least one glaring soft spot that the M7’s deans must puzzle over: a weakening of international interest in attending a U.S. school, which has contributed to a widespread slump in application volume that even the top schools have not escaped. It’s no longer a mystery why it’s happening; but even in the rarefied air of the best of the best, the reality of a long-term downturn in the MBA landscape can’t be ignored.
LEADERS OF THE PACK
It’s been said that Poets&Quants and others write too much about the M7, but there ‘s a simple reason: People care. Haters are gonna hate, but they also love to read about what they hate. And alumni of the M7 love to read about their alma maters.
It’s easy to love to read about the M7. In most ways, they’re what all other business schools aspire to be. Six of the seven have greater than 40% women enrollment. They have among the highest selectivity rates; they have some of the highest GMAT averages and undergraduate GPA averages; they produce the most satisfied graduates who become the happiest — and most generous — alumni. And as the sands continue to shift in the MBA world, with specialized master’s programs and online degrees growing in favor and the MBA becoming the subject of frequent forecasts of doom, the M7 are innovation leaders. Whatever may come, they are likely to be at the forefront of it. No wonder they also have the highest yield rates and consistently dominate the upper reaches of the various rankings.
No wonder, too, that they are also among the most expensive schools in the land: Of the nine U.S. schools with a total estimated cost of more than $200,000 for two years of a MBA program, all of the M7 schools are on the list (joined by NYU Stern School of Business and Dartmouth College’s Tuck School of Business). Those price tags never come down — they only go up. Then again, as expensive as they are, the M7 also have the highest ROI: In a comparison of 2018 starting salaries versus debt burden, all seven schools were in the top 10 for a positive pay-to-expense ratio.
BREAKING DOWN THE DATA
As good as the M7 schools consistently are, they seem to get better every year. Median salaries are up at each of the seven schools, led by Stanford’s $142,000; while job offers at three months are up at five of the seven schools, led by Wharton’s 98.4%, and only down marginally at MIT Sloan (97.0% from 97.1%) and Chicago Booth (96.3% from 97.1%). According to The Financial Times, six of the seven schools saw an increase from last year in the average difference in alumni salary before the MBA to now, led by Booth’s 118%. Only Columbia, at 103%, remained flat from 2017 to 2018.
Meanwhile, even as median salaries rose at most of the M7, as we mentioned above, bonuses are up at four of the seven schools, reaching a median $30,000 at Wharton, Columbia, Kellogg, and MIT.
In other metrics, the schools got a little less selective, with only Booth becoming harder to get into (23.5% acceptance rate for the Class of 2019 to 22.9% for the Class of 2020); but GMAT scores went up at six of the seven schools (and returned from the stratosphere at Stanford), and GPAs stayed flat or ticked upward at six of seven schools. Yield rates fluctuated a bit but basically stayed the same.
The fact is, the stats don’t fluctuate much when you get into the upper echelons of graduate business education — nor do the standings (see next page for a summary of those). What does fluctuate is student interest in certain industries, and therefore what each school becomes best known for. Kellogg is a marketing school? Sure, but did you know 28% of the school’s graduating Class of 2018 went into tech, a 3% increase from last year? Stanford leads the way in entrepreneurship, with 16% of grads starting their own business or going to work for startups — but MIT is close behind, with 10% of its most recent cohort of MBAs going that route. So did 9% of 2018 Harvard MBAs.
(See the next pages for more data on the M7 schools.)