Every year, GMAC® conducts the Application Trends Survey, asking business school admissions professionals to report the change in application volume from 2003 year to the current year.

The most notable result of the 2004 Application Trends Survey is that 78% of full-time, traditional two-year programs reported a decline in application volume. Contrast that figure with the percentage of executive MBA (EMBA) programs that reported an increase in volume (53%), and one wonders what factors might be at play.

A closer look at the data reported by two-year programs reveals that only 35% of the survey respondents said that application volume was down slightly or moderately (from 1% to 20%), whereas 41% of respondents said volume was down 21% or more.

External factors that could explain the overall decline include demographics, economics, and consumer “purchase behavior.”

Population Trends Limit Applicant Pool

The U.S. Census Bureau’s population model indicates a flat to downward trend in the number of people aged 25 to 34 years (the typical age range of business school students) in the U.S. and Asia that began in 2001. The trend is expected to begin an upward climb in 2004, meaning that the now-limited pool of potential applicants from these regions will expand in the coming years. The expansion of the business school–aged population will not extend to Europe, however, where the number of 25- to 34-year olds is expected to decline through 2010.

Prospective Students Resist Leaving Workforce

On the economic front, as a sustained recovery continues to elude the U.S. economy and the job market remains tight, prospective students are showing resistance to leaving the workforce to earn an MBA, choosing instead to attend shorter, more flexible programs that are more practical for working students. This behavior may explain, in part, the positive application volume trend for executive MBA programs, and the fact that part-time programs fared better in terms of application volume than full-time programs. EMBA and part-time programs typically attract professionals who continue to work while pursuing their degree.

Fewer Students Cross Borders

On the subject of international applicants, in 2004, 74% of non-U.S. full-time programs reported a decline in the number of international applicants. That number represents a near-complete reversal of the trend in 2003, when 71% of full-time programs outside the U.S. reported an increase in the number of international applications they received.

Two countries—China and India—are playing a prominent role in the decline in international applicants. Nearly one-quarter (24%) of the programs surveyed received fewer applications from China in 2004 than in 2003, and 16% received fewer applications from citizens of India (6% of programs reported receiving fewer applications from South Korean citizens). These decreases may be the result of population trends as well as political and safety issues, including the ability of Chinese students to get visas to study abroad and the effects of the SARS scare.

Other possible causes of the decrease in the number of international applicants from China and India are the increase in the number of MBA programs in China and the enhanced educational and career opportunities in India.

There is new evidence that master's programs overall—not just business programs—are seeing a decline in the number of international applications. According to a preliminary Council of Graduate Schools survey completed in March 2004, the number of graduate school applications from international students declined 32% during 2003. The result reflects a decline across all major countries of origin and for all major fields of study at the master’s level.

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