Business schools are hoping the old adage that it’s darkest before the dawn holds true in the case of applications to full-time MBA programs — because right now, it’s pitch black out there. According to Poets&Quants’ study of preliminary Class of 2021 profile data, for the second consecutive year even the highest-ranked business schools in the U.S. are seeing significant declines in full-time MBA applications, with many MBA programs experiencing double-digit drops.
Last year, the top 10 business schools combined saw a drop of about 3,400 MBA applicants, a 5.9% falloff to 53,907 candidates for the 2017-2018 admissions cycle versus 57,311 a year earlier. The University of Michigan Ross School of Business experienced the worst drop, an 8.5% decline from 3,485 to 3,188 apps. Harvard Business School fell 4.5%, UC-Berkeley’s Haas School of Business 7.5%, The Wharton School at the University of Pennsylvania 6.7%, Stanford Graduate School of Business 4.6%, and the University of Chicago Booth School of Business 8.2%.
This year, data from more than half of the schools in P&Q‘s top 25 (see table on following page) shows year-over-year declines in all but two schools, and declines across the board going back three cycles, to 2016-2017.
“For the second consecutive year, the top ten schools all saw significant declines in applications,” William Boulding, dean of Duke University’s Fuqua School of Business, tells P&Q. “I have been hearing that some schools in the top ten are in double-digit territory, so I think it is going to be worse than last year when all is said and done.”
DARTMOUTH TUCK LOST NEARLY 600 CANDIDATES, A 22.5% DROP IN APPLICATIONS
In the top 25, the drop-off was steepest at Indiana University’s Kelley School of Business, which lost more than 30% of its application volume in one year and has shed 40% in the last three cycles. UNC’s Kenan-Flagler Business School and Emory University’s Goizueta Business School each lost nearly one quarter since last year; the latter school had been one of the success stories of 2018, bucking the already-clear national trend. Yale University’s School of Management saw a substantial 15.6% plunge to 3,194 from 3,785 last year. Two years ago, applications at Yale SOM peaked at 4,098.
In hard numbers, Yale’s actual one-year app decline was the biggest of the schools examined by P&Q, at nearly 591. That’s just two apps more than the drop-off at Dartmouth College’s Tuck School of Business, which lost 589 applications in 2018-2019 from its 2017-2018 total. But the impact was felt more at Tuck, the smaller program. In percentage terms, the 22.5% drop in year-over-year apps at Tuck was the largest for any school with a top ten MBA program. The decline sent Tuck’s MBA acceptance rate soaring by more than 11 percentage points to 34.5%, from 23.3% only a year earlier. Even yield — the percentage of admits who enroll at a school — suffered, falling to 40.5% from 46.9%. In other words, nearly six of every ten candidates admitted to Tuck failed to take the school up on its offer.
“We at Tuck are not immune to the market forces decreasing applications to full-time, two-year MBA programs in the U.S.,” says Luke Anthony Peña, executive director for admissions and financial aid at Dartmouth Tuck. “I do believe, though, that our simplified and streamlined admissions criteria has clarified what makes a strong Tuck applicant, and so even as the overall number of applications decreased, we saw more candidates in our pool who were a strong match for Tuck. Our class profile numbers bear this out.”
GETTING GRANULAR WITH A TRIO OF SCHOOLS
While Harvard Business School and Stanford Graduate School of Business have yet to report their 2018-2019 numbers, their declines are not expected to be as severe. For one thing, an increasing number of MBA applicants are only applying to those two top business schools. “We have definitely seen an ‘HBS, Stanford or Bust’ mentality emerge in the last decade and really accelerate as the economy has gone into overdrive in the last few years,” says Jeremy Shinewald, founder and CEO of mbaMission, a leading MBA admissions consulting firm. “The opportunity cost of leaving a high-paying job for an increasingly expensive education means that the MBA decision has to be weighed carefully. For high earners with a lot of job security, staying where you are can make sense.”
At another top-10 school that provided application data ahead of the release of its Class of 2021 profile, the University of Michigan, apps totaled 2,990 this cycle, down nearly 200 from last year and more than 14% from 2016-2017. Michigan Ross admitted 925 of those, an acceptance rate of about 31%, up 4 percentage points from last year. However, applications to Ross from U.S. citizens increased, applications from candidates who identify as underrepresented minorities were up 10% to a 15-year high for the program, and the average GMAT increased by 3 points, to 719.
“We are proud of the quality and diversity of the applicants to the Michigan Ross Full-Time MBA program, and the impressive Class we welcomed this fall,” says Soojin Kwon, managing director of Full-time MBA admissions and program at Michigan Ross. That message was echoed again and again at schools suffering declines. At Fuqua, Dean Boulding also maintains that the school’s incoming class is “one of the strongest ever.” With an acceptance rate of 22%, Duke is welcoming a new MBA cohort that is 43% female and 37% international. Yield was up by six percentage points in the past two years, rising to 57% from 51% in 2017.