GMAC’s Massive New Survey Finds — You Guessed It — MBA Apps Still Declining

Applications to full-time MBA programs are down — this we know. Yet according to the latest Application Trends Survey Report by the Graduate Management Admission Council, the decline in interest in graduate management education hasn’t stopped business schools from seating classes brimming with highly qualified talent. In fact, GMAC’s survey shows that MBA and business master’s graduates express high levels of satisfaction with their experiences and outcomes and continue to be in great demand with employers.

Still, the application problem persists — and has only worsened for U.S. schools. For the last three years, shifts in student mobility — that is, interest in leaving their countries of origin to attend an international B-school, and the ability to do so — have caused yearly declines in apps to B-schools in the U.S. Last year, as Poets&Quants reported, 70% of surveyed full-time, two-year MBA programs in the U.S. saw declines; the number of affected schools this year is slightly higher, with 73% of full-time MBA programs reporting declines.

In 2018, 53% of U.S. programs overall reported declines; this year that number grew to 56%.

GMAC largely lays the blame on a strong economy, which has historically depressed interest in going back to school, but adds that political and other factors have played a big part. The result has been that a growing number of Asia-Pacific candidates — Chinese and Indians, long viewed as the lifeblood of graduate management education in the U.S. — are opting to stay either in-country or in-region, or sending their apps to Europe and Canada.

“Graduate business schools, just like any other organization, are subject to the forces of the world around them,” Sangeet Chowfla, president and CEO of GMAC, writes in a statement at the top of the new report. “Economic fluctuations, trade wars, advances in technology, and yes, political factors all have an impact on prospective students’ choices and the work we do as an industry to educate and inspire the next generation of global business leaders.”

U.S. SCHOOLS GRAPPLE WITH DECLINING INTERNATIONAL APPLICATIONS

GMAC released its annual report this month, the latest in nearly two decades of comprehensive studies on application volume trends by program type and world region, as well as applicant pool composition by gender, citizenship, and work experience and expected changes in enrollment rates, acceptance rates, and program size. The 2019 report collected data between June and August on applications received by graduate business school programs for the 2019-2020 academic year. Worldwide, 1,145 programs at 336 business schools provided responses, making this year’s sample the largest in the history of the survey. Participating programs are located in 40 countries, as well as 39 U.S. states and the District of Columbia; the total sample includes 572 MBA programs, 549 business master’s programs, seven postgraduate programs (PGP), and 17 doctoral programs.

GMAC found that weak international demand paired with a strong economy left most U.S. programs with smaller applicant pools this year, though the steepest declines came at large, highly ranked, full-time, two-year MBA programs (see page 2 for details). Still, these programs continued to attract the highest number of applications per available seat. Among professional MBA programs, online MBAs tended to see more application growth than part-time and flexible programs. Meanwhile, in the business master’s space, “applications to data analytics programs grew at most schools, but that growth is slowing as more competitors enter the market,” writes report author Matt Hazenbush, GMAC’s research communications senior manager. Bottom line: “Soft demand from abroad is fueling application declines at U.S. programs.”

GMAC found that international applications were down at nearly half of responding U.S. programs this year (48%), with 23% of programs reporting significant declines. International applications were down 13.7% at U.S. programs that responded to both this year’s and last year’s GMAC surveys. While the percentage of international business school candidates who said they planned to apply to a U.S. program declined only slightly between 2017 (63%) and the first half of 2019 (62%), the percentage that said the U.S. was their preferred study destination dropped from 44% to 37% over the same period. Among non-U.S. citizens who previously considered the U.S. but did not plan to apply, “factors they said impacted their decision include the ability to obtain a job in the United States post-GME (50% of candidates), the ability to obtain a student visa (48%), the political environment (47%), safety and security concerns (37%), and racism and discrimination concerns (34%).”

This month, Bill Boulding, dean of the Fuqua School of Business at Duke University and chair of GMAC’s board, was among 50 U.S. B-school deans to sign a letter calling for major reforms in immigration policies that they say restrict talent mobility and pose a major threat to the long-term competitiveness of the U.S. Boulding told P&Q that the effort is totally non-partisan.

“If you look at the list of schools that have signed the letter you will see the elite, private institutions, public schools, big schools, small schools, schools from red states and schools from blue states and from every region of the country,” Boulding said. “We are coming together because we believe this is in the national interest. Whether you call yourself a nationalist or a globalist, if you really care about the national interest, this is something we can agree to come together over to ensure our competitiveness over the long term.”

APPS DOWN WORLDWIDE, BUT MBA STILL THE DEGREE OF CHOICE FOR MOST

In Europe, Hazenbush writes, “the uptick in international demand resulted in most programs receiving more applications than last year, with full-time one-year MBA programs seeing the most growth. Master in Management and Master of Finance programs saw mixed results overall despite a strong showing with international applicants. In the diverse Asia-Pacific market, more candidates opting to stay close to home was a boon to full-time two-year MBA programs, which attract mostly domestic talent. In both China and India, domestic application strength drove a mostly positive admissions cycle.”

Pulled down by the decline at U.S. business schools, total applications worldwide declined slightly year-on-year, GMAC reports. A weighted average of applications to programs that responded to both this year’s and last year’s surveys shows that apps were down 3.1% year-on-year. Among the total sample of responding programs, slightly more programs report year-on-year application declines (52%) than growth (41%) or stability (7%). Applications to MBA programs were down 6.9% year-on-year.

Nevertheless, MBA applications accounted for two-thirds of total graduate management education applications this year, making up about half of programs responding to this year’s survey (52%) but accounting for 68% of applications and 64% of available seats. Overall, 4 in 5 business school candidates say they have considered or will consider an MBA program type (79%), and 2 in 3 have considered or will consider either a full-time one-year or two-year MBA (65%).

And while total applications declined slightly year-on-year, the average selectivity of programs held steady, Hazenbush writes, with most programs reporting that the quality of their applicant pool was at least as high in quality as last year. The median number of applications per seat was 2.5 this year, about the same as last year (2.4) and the year before (2.5).

“Overall,” he writes, “nearly 9 in 10 programs report that their applicant pools were equally (63%) or more (24%) qualified compared with last year.”

Business master’s programs, meanwhile, made up the other half of survey-responding programs (48%) but accounted for 32% of applications and 36% of available seats. Applications to business master’s programs were up 5.4% year-on-year, but among the total sample of responding business master’s programs slightly more programs report application declines (52%) than growth (42%) or stability (6%). Overall, 2 in 3 business school candidates say they have considered or will consider a business master’s program type (67%); the most popular are the Master of Finance (24%), Master of Data Analytics (14%), and Master in Management or Global Management (14%).

“As an association of leading graduate business schools, the Council is committed to supporting the free flow of talent and ideas across borders, providing, in the words of our Chairperson of the Board Bill Boulding, the oxygen for innovation and economic development,” Chowfla writes. “While the findings of this year’s Application Trends Survey reflect a competitive market in which these shifts in mobility are continuing to take hold, we are continuing to inform and influence these changes. At GMAC, our vision is for a world where talent matched with aspiration can benefit from the best business school education possible. Mobility is a key aspect of this vision, and together as an industry we must advocate for the best and brightest to have the ability to study and work in the country of their choosing.”

See GMAC’s full Application Trends Survey Report 2019 here. See more data from the report on page 2.