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Data & Trends

Application Trends Reveal MBA Caution 

If the Great Recession drove business school applications to peak levels in 2008-2009 as a tightening job market sent people back to grad school, GMAC’s 2011 Application Trends Survey suggests that MBA students are responding to today’s economic uncertainties by proceeding with caution. And students coming directly out of undergraduate programs still see business-related specialized master’s programs as an attractive option. 

The survey of 649 graduate management programs from 331 business schools worldwide found that most full-time MBA programs reported a decline in applications, but part-time and executive MBA programs held steady. And most specialized master’s programs, which are more likely to draw younger students, saw applications rise.

“The caution in this year’s survey is unsurprising in the current economy as students weigh the financial and time commitments required to pursue an MBA,” said Dave Wilson, president and CEO of the Graduate Management Admission Council. “Still, the strength reflected in part-time MBA programs, specialized masters programs, and international applications shows the value people continue to place on graduate management degrees as investments in their career and future.”

Among full-time MBA programs surveyed, 67 percent of two-year programs and 57 percent of one-year programs reported fewer applications for the fall 2011 incoming class than 2010, with large (more than 100 students) two-year programs reporting sharper declines than smaller ones.

“In many ways, the current decline is similar to what happened in 2003-2005, as application volume adjusted downward from the 2001-2002 recessionary peak. However, this time the decline in application volume is less severe than before, but lasting longer.” said author Rebecca Estrada.  “Many full-time MBA programs noted that as the economy begins to pick up, potential applicants are reluctant to leave their jobs to attend.” 

Part-time and executive programs─which students typically attend while holding onto their jobs─fared better. Among part-time programs, 46 percent reported a decrease in applications, 41 percent reported an increase, and 13 percent were about the same as 2010. Some 42 percent of executive MBA programs reported increases, the same percentage as reported decreases.

Other key findings:

  • Specialized master’s programs. Most specialized master’s programs (83 percent of Master of Finance, 69 percent of Master in Management, 51 percent of Master of Accounting, and 70 percent of other master’s programs) reported rises in application volume. Survey respondents for these programs, located in the United States and Europe for the most part, typically draw younger applicant pools, many coming straight from undergraduate programs.
  • International applications. Among all types of graduate management programs, 46 percent report increases in applications from international students. China and India are the largest sources of foreign applicants for full-time programs worldwide, as Asia Pacific was the region with the most recruiting activity for schools globally. 
  • Increasing academic quality. Anywhere from 86 percent to 95 percent of the MBA programs and 80 percent to 100 percent of specialized master’s programs  reported that the overall applicant pool was as or more academically prepared as last year. This finding may be explained in part by the increases in the overall average GMAT Total score that has been inching up, from 539 in 2009 to 544 last year.

“Although application volume varied substantially among program types and size, the vast majority of programs of all types reported that the quality of their applicant pool was as strong or even more academically qualified than last year,” Estrada said.

Overall, the 2011 Application Trends Survey reflects the ability of schools to respond to market demands while continuing to attract the highest quality candidates, Wilson said. “Finally, it’s worth noting that the trend in registrations for GMAT testing is up sharply for the first seven months of 2011, with the potential to bring gains in applications in the year ahead.”

Schools that participate in GMAC’s Application Trends Survey receive interactive benchmarking reports that allow them to compare their results to aggregate data from peer schools. For invitations to participate in this and other GMAC surveys, go to gmac.com/surveysignup.

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