2020 was a bad year for Graduate Management Admission Test score averages at the top business schools — and for the test as a measure of readiness for graduate business education overall. Scores fell at 30 of 37 leading MBA programs in the United States, including seven of the top 10 B-schools, as questions grew about the future of the test. GMATs also dropped at many of the top European schools — even by double digits at a few, including Oxford and IE.
The GMAT was reeling. The Graduate Record Exam was gaining favor as an alternative. But looked at another way, the GMAT was primed for a comeback in 2021 — and in terms of scores, at least, that’s just what happened.
According to the MBA class profiles of 26 U.S. B-schools examined by Poets&Quants, the GMAT class average grew at all but one — UC-Berkeley Haas School of Business, which dropped a single point, to 726 from 727. Fifteen B-schools reported matching or setting school records, including Stanford Graduate School of Business, which led all schools this year with a 738 average. The number of schools reporting an average of 700 points or greater increased to 18 (plus three schools with medians of 700 or more), up from 15 last year, with Washington Foster, Georgetown McDonough, and Rice Jones joining the party.
Overall at 22 of the top 26 B-schools, year-over-year GMAT growth was 8.7 points. For 23 schools for which comparisons are possible, the average score grew to 713.3, up from 705. See table on page 2 for details.
APP GROWTH NOT ALWAYS AN INDICATOR OF GMAT STRENGTH
Less important than the what is the why: Why, exactly, did GMAT scores rebound? What changed between the pandemic cycle of 2019-2020 and the still-in-a-pandemic cycle of 2020-2021? For answers, we turned to the experts: officials at schools that saw the biggest jumps, and some of the leading admissions consultants.
The Kelley School of Business at Indiana University reported the biggest one-year jump in GMAT average of any top MBA program: 27 points, to 679. Jim Holmen, director of admissions and financial aid at the Kelley School, says the biggest factor was the school’s skyrocketing applications. Indiana Kelley led all U.S. MBA programs with a 61% increase in apps last cycle.
“While there are a number of factors that play into our average GMAT, the main factor that allowed us to increase the average GMAT for this fall’s entering class was our 61% increase in applications,” Holmen tells P&Q. “The increase in applications allowed us to be a bit more selective.”
INTERNATIONAL APP GROWTH KEY FOR ONE TOP SCHOOL
Another school with a huge jump in GMAT average was the school that saw the next-biggest increase in apps last cycle. The University of Michigan Ross School of Business grew its applications by 56%, and its GMAT by 12 points, to 722. Importantly, international applications were also up this year, says Soojin Kwon, the Ross School's managing director of MBA admissions and program, helping to drive the GMAT surge.
"The welcome return of greater numbers of international candidates is a key driver behind the rise of average GMAT scores at top business schools," Kwon tells P&Q. "International candidates typically take the GMAT (versus other tests) at a higher rate than domestic candidates. And, historically, non-U.S. students have, on average, scored higher on the GMAT than U.S. candidates. This year's incoming class profiles show more international students and higher average GMAT scores, reflecting the greater number of international applicants with higher scores (on average), and easing travel restrictions."
Some schools with big GMAT increases did not have corresponding application growth. Virginia Darden and Washington Foster both grew their class score by 12 points but had only 1.4% and 0.7% app growth, respectively.
Carnegie Mellon Tepper School of Business offers a different case. Tepper's applications dropped 6.3% this year even as its GMAT climbed by 11 points. Last year when the school's apps were way up, its GMAT dropped by 7 points. But — mirroring many peer schools — Tepper's apps were actually up considerably in 2020-2021 compared to the pre-pandemic cycle of 2018-2019.
GMAT-OPTIONAL POLICIES PLAY KEY ROLE IN BOOMING SCORES
Paul Bodine, founder and president of admissions consultancy Admitify, says the GMAT explosion has many causes, including GMAC's recent score cancellation changes and B-schools' GMAT-optional policies. Only those applicants who do well on the GMAT will submit GMAT scores, he says, and the scores submitted will only be high scores.
"That said, I think the main reason for the post-Covid increase in average scores is this: COVID-induced fear of dropping enrollments caused panicked business schools to widen their standards in order to fill their classes," Bodine says. "Now that they are seeing the light at the end of the Covid tunnel and a surge in applications, they are shifting back to their historical concern to guard their ranking through increased GMAT selectivity, with the score cancellation and GMAT-optional policies giving them higher-GMAT applicants to choose from.
"And they can afford to be more selective on the GMAT side because the growing respectability of the GRE as a GMAT alternative gives them plenty of other applicants by which to meet their enrollment goals. Post-Covid there will simply be much less risk to maintaining high GMAT standards going forward."
Betsy Massar, founder of Master Admissions, succinctly adds: "People who are good at GMAT took that test, those who aren't took the GRE or Executive Assessment."
GMAT: NOT THE BEST GAUGE OF MBA CLASS QUALITY
Linda Abraham, founder of Accepted, agrees that "options" are the main cause of the growth in GMAT scores.
"People who don't do well on the GMAT are taking other tests, focusing on schools that waive the test, or applying where they can get a waiver," Abraham tells P&Q. "The result is that those who can do well on the GMAT, apply with the GMAT. and scores rise. Bad scores are cancelled and never reported. Those who don't do well on the GMAT apply with one of their other options and their GMAT score doesn't show up."
She says the shift means GMAT is no longer as strong an indicator of the academic strength of an MBA class.
"Other possible contributing factors would be improved test prep and possibly less test anxiety because people are taking the test at home," Abraham says. "However, I believe the biggest factor is options, so that the average GMAT score doesn't really represent class 'quality' or even the schools' selectivity or exclusivity."
Stacy Blackman, founder of Stacy Blackman Consulting, says the “GMAT-scores-have-risen” data point "likely reflects the bias in reporting only GMAT scores so that MBA programs can get a flashy headline. MBA admissions has become much more flexible on test options; this allows programs to cherry-pick the higher GMAT score candidates," she tells P&Q, using Georgetown McDonough as an example: Georgetown saw a one-year 14-point increase in average GMAT scores at the same time that the school has started to accept the Executive Assessment, and that its share of GRE submissions has grown to 48%.
"Many test takers who would otherwise score much lower on the GMAT have opted to take alternative tests such as the Executive Assessment or the GRE exam," Blackman says. "MBA programs who tout higher average GMAT scores for marketing value are likely just accepting far more applicants who opt to take these other exams or those who opt to submit without a test altogether."
'APPLICANTS WOULD BE WISE TO CONSIDER ALTERNATIVE TEST OPTIONS'
"Test-optional or test waiver features, another avenue through which programs can cherry-pick high GMAT score applicants, are much more common now — as a result of the pandemic — among the lower-ranked programs and even a top-7 school: MIT Sloan," Blackman continues.
"Across our client pool, we see test scores that are in line with the score ranges from the previous seasons; we don’t see that scores are higher but rather we advise our clients on alternative test options more commonly. Applicants would be wise to consider alternative test options unless they have test scores for the GMAT that are at or above average, unless their profile has true differentiating qualities.
"Of course, there could be variables contributing more directly to the increase in GMAT scores, such as applicants’ taking the test multiple times to cancel their lower scores. Also, the pandemic afforded much more discretionary time for candidates to study harder and go for the retakes."
Which returns us to the question we have been asking for years: What is the GMAT's viability going forward as B-schools waive the test or explore alternatives? The answer will have to wait for more data — and more time.
See the next page for a table of GMAT scores from the last 5 years at 26 leading U.S. business schools.