“May you live in interesting times.”
The famous curse has come to pass for another generation of business school applicants — and for the schools themselves. But is it actually a bad time to apply to an MBA program? Is it a better idea to wait for the next application cycle, beginning in the fall of 2020, or even later, given the uncertainty surrounding how long the coronavirus crisis will last? With the idea that they may assess the moment with greater candor, we asked experts outside the system to weigh in.
Paul Bodine is the founder and president of Admitify.com. He has more than 20 years’ experience advising applicants worldwide on how to gain admission to such elite business schools as Harvard, Stanford, Wharton, Chicago Booth, Northwestern Kellogg, MIT Sloan, Columbia, Dartmouth Tuck, and many more. He says there are many factors that make now a bad time to apply to an MBA program — but several key reasons to give it serious consideration.
On the downside, Bodine explains, the degree remains expensive — “overpriced,” he says, at both the elite and non-elite levels. Though the ROI is still there, he says, “it’s not as compelling as it used to be, and there are arguably cheaper ways to get at least some of the same benefit.” He points to one-year master’s in management programs as an example.
Politics is another problem for business schools right now, Bodine tells Poets&Quants, because of the negative impact of immigration rhetoric and the reality of Trump administration policies on international students, who remain the lifeblood of U.S. MBA programs. It’s an ongoing problem that has only been exacerbated by the coronavirus pandemic, he says.
“Unless and until the current regime changes, post-MBA job prospects in the U.S. for non-U.S. MBAs will remain weaker than normal,” he says.
AN OPPORTUNITY FOR STUDENTS; CHAOS & PAIN FOR SCHOOLS
The risks in pursuing an MBA now are clear, Bodine says. “Since we are entering a recession and people have already started to lose their jobs, the MBA may look — as it historically does during recessions — like a good place to retool and recoup while the economy recovers,” he says. “This will mean more competition among applicants, especially applicants from hard-hit sectors like restaurants, travel/hospitality, etc.”
It’s also difficult and counter-intuitive to leave a job during an economic downturn, Bodine adds. “Leaving the workforce for an expensive degree in an epochally uncertain time is a higher-risk proposition that many MBA aspirants will want to take,” he says. “There may also be people in certain segments of the economy — medical devices, pharmaceuticals, hospital management, government — for whom the near-term COVID-19 crisis represents a positive or meaningful career opportunity that they may want/need to be part of, or that they feel they cannot abandon for humanistic/patriotic reasons.”
Despite the very real risks, however, Bodine sees the present as a “net good time” to get an MBA. To begin with, as has been amply demonstrated by P&Q and elsewhere, MBAs from top programs — “while pricey” — still justify their cost over time. Moreover, even with the likely flood of applicants fleeing the faltering economy, acceptance rates have been going down — and probably will go down even further.
“Top programs have been easier to gain admission to since 2016 because of falling applicant volume,” Bodine says, “and even assuming a surge in applications from people downsized by COVID-19, I personally think the net applicant volume will stay below pre-2016 levels — meaning top programs will still be easier to get into than in the past (though still difficult). This is especially true for international applicants, whose application volume has been hit the hardest. COVID-19 is creating a circle-the-wagons, close-the-borders mentality that some non-U.S. MBA aspirants will be intimidated by, deciding not to apply; or the COVID-19 fallout will create cost or logistical obstacles that they can’t overcome. In my opinion, these applicants lost won’t be fully offset by the number of laid-off U.S. applicants fleeing the recession for an MBA. So top schools will remain ‘easier’ than normal to get admitted to.
“For international applicants who are courageous enough, this next year will probably give them the best odds of gaining admission to top U.S. schools— especially if their post-MBA career is not necessarily in the U.S.”
For B-schools, the coronavirus pandemic may create a lot of pain — but what, and who, emerges will be stronger for it, Bodine says.
“In the short term I think B-schools will be forced to be flexible about deadlines, will have to create larger waitlists to replace admitted applicants who can’t matriculate, and will have to adopt less hands-on or face-to-face marketing and enrollment strategies.,” he says. “In the medium and long term, B-schools will have to convert more quickly to some online delivery, which will become permanent sooner than they had envisioned; will have to spend more marketing time/expense convincing reluctant or daunted applicants on the benefits of a residential MBA experience; and will have to introduce more courses on risk and crisis management and global supply chains. The virus may hasten the contraction of the full-time MBA market and create more competition among the surviving schools.”
B-SCHOOL ADMISSIONS FACES NEED FOR IMMEDIATE ACTION
Betsy Massar, founder and CEO of Master Admissions, has been helping candidates with their applications to business school since she was in her second year at Harvard Business School, from which she earned her MBA in 1982. She expects the current application cycle — which ends at the beginning of April for many schools — to adjust quickly if not cleanly.
It’s a new reality that may directly benefit applicants — including some of her clients.
“Admissions officers are probably going to over-admit in Round 3 because they won’t be able to fill seats from the students they admitted in Round 1 & 2,” Massar tells Poets&Quants. “This is actually an amazing opportunity for one of my clients to just re-work his current essays for the other schools that interest him. He doesn’t really benefit from waiting to do it all over again.” She predicts that Round 1 next year will be even more competitive than previous years, “because people will be wanting to take a two-year break after the recession kicks in.”
Moreover, Massar adds, “applying in Round 1 as a rejected applicant only works when there is a material change in the profile — for example, someone who was working for McKinsey ends up working in a cool strategy job for a client, or someone in private equity ends up as acting-CFO for one of the portfolio companies.” Her client “actually in a very good spot now, since many schools (but not all) are being more open-minded than normal about admitting candidates.
“The other thing I am thinking is that admissions officers have to use game theory to determine how many to admit in Round 2, and also whether to extend Round 3. It must be fun times for them!”
She says another issue is the scholarship pool.
“Will there be a new wave of money to go around?” Massar asks. “If there’s a drop-off in yield, what about candidates who had scholarships and give them up? Lots of modeling to be done!”