Some of the best known M.B.A. programs in the U.S. registered precipitous drops or sluggish interest from prospective candidates this year, following a 2020 admissions cycle in which applications soared.
Northwestern’s Kellogg School of Management reported a 20% drop in applications to its M.B.A. program for the incoming fall of 2021 class. Columbia Business School reported a 6% decline, though the volume of applications was still higher than it was in 2019 when interest in many schools languished during a white-hot job market.
Other elite M.B.A. programs that had been counting on continued robust interest posted relatively flat numbers of applications this year. At the University of Pennsylvania’s Wharton School, applications ticked up 2%, after climbing 21% in the prior year. Harvard Business School reported about a 5% increase in applications, which was far below what many admissions experts had predicted.
Annual application volumes to M.B.A. programs are typically seen as a bellwether for the population’s interest in a degree that is traditionally a big moneymaker for schools. A sudden decline puts pressure on a changing higher-education industry that is already hurting because of the pandemic.
Several factors made this fall look less enticing than the fall of 2020 to prospective M.B.A.s., said deans and admissions coaches. Among them, the finance and technology sectors boomed, leading many to stay in the workforce.
"Volume is the result of many different things," said Chad Losee, Harvard’s managing director of M.B.A. admissions.
M.B.A. programs that changed their application process on a one-time basis during last year’s admissions cycle registered bigger swings in application volumes. Kellogg temporarily waived standardized test requirements early in the pandemic, which helped draw in more applications last year, a spokeswoman said. Those requirements were back in place for this year’s crop of candidates.
Columbia extended its application deadline a year ago, but this year it cut back some recruitment efforts because of staffing shortages, said Amanda Carlson, assistant dean of admissions at the school.
A handful of highly ranked schools registered greater interest this year.
New York University’s Stern School of Business and the Yale School of Management reported their applications were up about 8% and 12%, respectively. The schools attributed the rise, in part, to a return of international-student demand after Covid-19-related restrictions kept some potential M.B.A. candidates in their home countries for a year. There was also interest this year from people who put off applying last year to make sure they avoided online classes and got to come to campus to learn and network, the schools said.
Duke University’s Fuqua School of Business was also helped by more international students. The school reported a 12% increase in applications, thanks in large part to people from India applying, many of whom might have put off U.S. school until after the 2020 presidential election, said Shari Hubert, the school’s associate dean of admissions.
"We hope interest remains strong," she said. "I’m curious to see how it plays out."
This year was expected to be a banner one for applications to top-tier M.B.A. programs. In 2020, application volumes surged for the first time in five years, thanks in part to loosened standardized testing requirements and extended admissions deadlines that let students seeking to ride out a shaky job market apply for many months beyond the normal admissions time frame. Instead, this year’s results are mixed and admissions experts say the pandemic-spurred interest in the degree could further evaporate by next year.
"I assumed, like everyone else, that applications were going to go through the roof," said Jeremy Shinewald, founder of mbaMission, which coaches prospective M.B.A.s on how and where to apply. "People were calling us during the financial crisis [of 2008] saying we need somewhere to hide for two years. We didn’t quite see that this time."
The economic conditions for prospective M.B.A. students also changed rapidly this past year. White-collar sectors that traditionally feed students to M.B.A. programs, including banking and consulting, were less affected by the pandemic-induced recession than many others, such as hospitality and logistics.
"The job market has rebounded faster than many predicted," said Caroline Diarte Edwards, an admissions consultant for Fortuna Admissions. "If they are applying to business school, it may not be in a blind panic like 12 months ago."
Students typically flock to business schools and other graduate programs during economic downturns to sit out a tough labor market and bolster their credentials. But this year, M.B.A. programs looked less attractive as many Wall Street employers, including Goldman Sachs Group Inc., JPMorgan Chase & Co., Citigroup Inc. and Morgan Stanley, increased pay for early-career professionals.
"There is no reason to believe applications are going to be going up anytime soon," Mr. Shinewald of mbaMission said. "As banks roll out huge wage increases, retention bonuses, stock options and that makes a huge difference if you’re 25 or 26 years old. The professional set that applies for business school is extremely secure in their job."
A 25-year-old associate at Boston Consulting Group said he was considering applying to M.B.A. programs at Harvard and Northwestern but held off after getting a $10,000 raise, which boosted his annual salary over $100,000, plus a $30,000 year-end bonus. He also learned he was on track for promotion from associate to consultant in a matter of months, which will nearly double his salary. Leaving the firm for two years to pursue a management degree didn’t seem worth it anymore, he said.
"The opportunity cost felt extremely high," he said, adding that many of his co-workers considering the degree were reaching similar conclusions. "Everyone else I talked to had done similar calculations."