he unemployment rate (currently9.7%) seems poised to moveinto double digits for the first timesince June of 1983. The InternationalMonetary Fund is predicting continuedglobal economic contraction in 2009 anda return to growth in 2010. So, shouldn’tone conclude that if the future seemsbrighter than the present, many aspiringMBAs will seize the moment to applyto Business School now, ride out theeconomic storm and be poised to graduatein a much stronger economy in 2012?Intuitively, the answer might seem to be“yes,” but historical trends and currentindicators seem to point to a more nuancedconclusion.What is happening right now in theMBA admissions world? From 2004to 2008—when the economy had fullyrecovered from the dotcom implosion andthe economic fallout of the terrorist attacksof September 11—top MBA programsconsistently experienced double-digitgrowth in their application volumes. Then,last year, during the 2008-2009 applicationcycle, the data started to become more“mixed”: MIT Sloan reported that it had arecord year with regard to the applicationsit received and Harvard Business Schoolannounced another double-digit increasein applications (specifically, a 12% rise to9,093). Peter Johnson, the admissionsdirector at Berkeley Haas, told mbaMissionthat applications to the school rose by 7%in 2008-2009. Dartmouth Tuck reported
By Jeremy Shinewald, published on Beat the GMAT
that its application volume was flat in 2008-2009, and Sara Neher, the admissionsdirector at UVA Darden, recently reportedto mbaMission that the school’s applicationvolume was likewise flat. Meanwhile, byFebruary 2009, Cornell Johnson hadannounced that its application volume haddropped by 14% from 2008 levels.Although application volumes increasedoverall at MIT Sloan and HBS last year,even these two schools were looking atsome unusual data in this area. Just likeMichigan Ross, Cornell and many othertop business schools, Sloan and HBSexperienced a drop in applications in thesecond round, as the credit crunch startedto take its toll and international studentsbegan learning that no-cosigner loanswould no longer be available at manyschools. By the time several institutionswere able to get these no-cosigner loanprograms in place, the application seasonwas over, and the schools had received asignificantly lower number of internationalapplications. Offsetting this decrease ininternational applicants, however, was anotable increase in domestic applicants,many of whom applied in the first roundwhen the economy had started to creak buthad not yet imploded entirely. So, last yearwas likely a good year to be an internationalapplicant, given that the internationalapplicant pool was smaller, and a toughyear to be a domestic applicant, becausethe domestic pool increased. Why shouldthis year be any different?The main reason 2009-2010 will bedifferent from 2008-2009 is that—judgingfrom the anecdotal evidence that has beenseeping out of every school, includingmighty HBS, lately—the job situation is“challenging” and a higher proportion ofstudents who are actively seeking work aregraduating with significant debt and no job,for the first time since the Classes of 2002and 2003 (though no hard numbers areyet available). In an economy with a 9.7%unemployment rate, many domestic MBAcandidates who have survived roundsof layoffs, particularly at banks, will bereluctant to roll the dice and give up theirpositions, concerned that they may nothave improved job opportunities availableto them when they graduate two years later.Meanwhile, international candidates arestill facing a murky situation with respectto
availability of no-cosigner loans;although several schools have announcedsuch loan programs, others still have notresolved the issue.At the Association of InternationalGraduate Admissions Consultants annualconference in June 2009, admissionsofficers from Dartmouth Tuck, the YaleSchool of Management, UVA Darden,Michigan Ross, Berkeley Haas andINSEAD were asked if they felt thatapplication volumes would rise for the2009–2010 admissions season. Of them,only INSEAD’s admissions representativefelt that the school would indeed seesuch a rise but attributed this potentialincrease to improved marketing effortsand not to macro-trends. The otheradmissions officers in attendance felt thatapplication volumes at their schools wouldbe flat or even down. In an interview withmbaMission, Chicago Booth’s admissionsdirector, Rose Martinelli, predicted thatapplication volumes at Booth woulddecrease, hearkening back to the dotcomimplosion, when application volumes fellfor two years before finally turning around.“There was just so much uncertaintyaround the quality of the investment,”stated Martinelli.Of course, where there is risk, there isalso reward. Few candidates who appliedto Business School during the uncertaineconomic times of 2002 and 2003 couldhave predicted that they would graduateinto the booming economies of 2005 and2006. Further, an MBA is not a short-terminvestment but rather steadily reveals itsvalue over the course of a graduate’scareer. So, with MBA applicationsseemingly on the wane, now just mightbe the time to seize the day and apply. Ifyou can look past the short-term economicdata, you just might find it easier to get intothe school of your dreams.
Jeremy Shinewald is the Founder andPresident of mbaMission, a full serviceadmissions consulting firm. mbaMissionoffers MBA aspirants a free consultation.Register through mbaMission’s website:www.mbamission.com