Decline in applicants to US MBA programs
Factors like the high cost of the degree and the emerging job market reduce the number of students applying for business school.
Many prospective students are not expected to apply to business schools in 2022, causing a decline in applicants to US MBA programs. This is forecasted from the fewer GMAT tests by the prospective students in the US this year, meaning it will have fewer applications for business school. According to the monthly survey conducted by the analysts at QS Quacquarelli Symonds, more than half of the admission officers agreed that US business schools would receive declined number of applications this year. Within that bracket, two-thirds of the respondents say there will only be a minor reduction of applications. In contrast, one-third of the officers expressed that it would be significantly lower.
There was a gradual decline in students taking GMATs in North America in the last few years. It went down from 80,000 in 2017 to below 39,000 in 2021, contributing substantially to the reduction of business school entry. Even though the MBA’s benefit and power for an individual’s strength in the job market are still acknowledgeable, other factors like high costing fees and loss of opportunity and time during the degree are core reasons behind the abandonment of the MBA entrance.
Quacquarelli emphasized the more comprehensive option for prospective students seeking outside the traditional academic certificate. “There are numerous options for students to pick from outside the US. The boom in online certificates and on-campus degrees around the globe has a variety of options to fit an individual’s career goal, budget, and time.” He continued, “With the increased number of courses, a traditional MBA degree from a high prestige school stays the foundation of standard for higher management education.”
A higher ratio of online committed students can be observed in many top business schools. Imperial College Business School in London currently holds 8% of its total admitted students from the online MBA program. Similarly, University College London has over 12% of students studying their MBA program online. According to James Berry, a director of UCL online MBA, it is much cheaper for students to study in Europe than in the US, which is a significant factor for students studying online.
This trend, however, was affected by the pandemic in 2021. There was a decrease in online MBA students in Europe from the US. The percentage has dropped below 5% overall. Moreover, the online MBA experience did not meet the same standard as it would be in person. Berry highlighted the explosion of education opportunities taught online and its effectiveness. “Online educations differ by the schools with its quality and depth of the content. Some with high quality while others can be mediocre. Despite all of this, I have realized that these online educations do not create the same learning experience as students would gain from an interactive classroom experience on campus. Furthermore, I believe that is the critical value of a traditional MBA degree.”
Reasons behind the fall of MBA admission can be found in the current US job market. According to Nunzio Quacquarelli, the founder and CEO of QS Quacquarelli Symonds, “Current job market has become more attractive than before due to the increased number of job vacancies from the pandemic through mass resignation. Therefore, an MBA degree has become less of an advantage to help their career paths. The money and time required to be invested from the MBA candidates consider taking the job first.”
The reduction of US students in the MBA will change the landscape of MBA students and graduates in the future. Experts predict a decrease in the US but an increased number of MBA admissions from other continents, including Europe, Latin America, India, and Africa. Some predict these numbers to be much higher.
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