Master of Business Administration (MBA) programs at elite schools like Harvard University and Stanford University are seeing drops in applications as the U.S. economy improves.
Graduate Management Admission Council (GMAC), a nonprofit that gives the Graduate Management Admission Test (GMAT), conducted a survey of 360 schools where it found U.S. MBA programs saw drops in applications for the fourth year in a row, The Wall Street Journal reported Monday.
The GMAT is a computer-adaptive test that measures analytical writing data sufficiency, logic and critical reasoning, according to GMAC’s website.
“People are thinking, ‘Oh my gosh, if the top is struggling to find applicants, what are the rest of us going to do?'” George Andrews, director of admissions at Jones Graduate School of Business at Rice University, told TheWSJ.
Rice had a 27-percent drop in full-time MBA applications, TheWSJ reported.
U.S. business schools went from 150,479 applications in 2017 to 140,860 applications in 2018, a 7-percent decrease.
The Wharton School of Business at the University of Pennsylvania saw a 6.7-percent decrease in applicants while Stanford’s Graduate School of Business had a 4.6-percent decrease. Harvard Business School faced the largest drop in over 10 years, with a 4.5-percent decrease in applications, according to GMAC data, TheWSJ reported.
Interest in European and Asia/Pacific MBA schools increased. Asia/Pacific saw an increase by 8,577 applicants, while Europe saw an increase by 1,200 applications from 2017 to 2018.
Improvement in the U.S. economy, President Donald Trump’s stance on limiting work programs for international students and increased competition from Asian and European schools could be contributing to the drop in U.S. business school applications, according to GMAC President Sangeet Chowfla, TheWSJ reported.
“Several factors can help explain the lag in U.S. business school demand,” Chowfla said in a statement provided by GMAC. “A low unemployment rate means young professionals have an increased opportunity cost of leaving their jobs in pursuit of an advanced degree. Combined with a disruptive American political environment and the emergence over the past decade of tremendous educational and professional opportunities abroad, one can begin to understand in part why demand in the United States has dropped from previously record-high application volumes at some schools.”
Unemployment rates remained stable at 3.9 percent, while the American economy saw an increase of nonfarm jobs — positions outside of farm work, nonprofits or unincorporated private household employment — by 201,000 for August, according to the Bureau of Labor Statistics. (RELATED: US Economy Adds 201,000 Jobs In August, Outpaces Expectations)
Trump also announced he would shorten visas to Chinese nationals due to safety concerns over U.S. intellectual property. The change would affect Chinese graduate students studying certain STEM fields like robotics, aviation and high-tech manufacturing, where they would get one-year visas.
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