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Applications to MBA programs at the University of Chicago, Northwestern University and other elite schools are down for the first time in years, thanks to a booming economy and waning interest from international students.

The 9-year-old bull market - a potential disincentive to pursue graduate business studies - paired with tightening immigration policies under the Trump administration contributed to a nearly 7 percent decline in applications to U.S. Master of Business Administration programs in 2018, according to a recent study by the Graduate Management Admission Council.

"What we are seeing is a continuation of a long-term trend, which is declining interest from students across the world to study at business schools in the U.S.," said Sangeet Chowfla, the admission council's president and chief executive.

The annual study, published this month, includes full-time two-year MBA programs, as well as part-time and executive programs. Most reported a decline in the number of applications, a trend that has now extended to even top-rated schools.

Chicago and Northwestern saw applications decline by 8.2 percent and 2.7 percent, respectively, according to data supplied by the schools. Harvard reported a 4.5 percent decline, while Stanford was down 4.6 percent.

Part of the decline is simply a sign of a robust economy. A low unemployment rate means young professionals are less likely to leave their jobs to pursue an advanced degree.

"In recent years, the biggest reason people don't show up when we give them an offer is because they stayed at their job," said Stacey Kole, deputy dean for MBA programs at the University of Chicago's Booth School of Business. "It's not like we lost them to another school."

A similar pattern emerged during the years surrounding the recession a decade ago, Chowfla said, with MBA applications declining as the economy soared and interest recovering as it faltered.

But things may be different this time. The survey found a 10.5 percent decline in the number of international applicants across all U.S. schools, which has raised concerns that the downward trend may be more than cyclical.

"We've recently seen an acceleration of this trend, partially because of the political climate in the United States, the anti-immigration rhetoric that we've been seeing and the concern that the U.S. is no longer a welcoming location," Chowfla said.

Concerns about getting student visas or post-study employment visas have encouraged a growing number of international students to attend increasingly competitive business schools outside the U.S., Chowfla said.

While 70 percent of full-time two-year U.S. MBA programs reported application declines, 75 percent of similar programs in the Asia-Pacific region reported application volume growth, according to the study.

The decline in international applications hit home at Chicago's Booth School, which was tied for first place with Harvard in the most recent U.S. News & World Report rankings, published in March.

"There's no question that the pool of applicants fell more in the international space than the domestic space," Kole said. "It's pretty clear that candidates are thinking twice before coming to the U.S."

Booth had 4,289 total applicants for the 2018 class, down from 4,673 the previous year. Kole declined to give the number of international applicants but said international students account for 30 percent of this year's incoming class, down from 35 percent in 2017.

Part of the year-over-year decline is attributable to an "unusual surge" in applications from India in 2017, corresponding to finance professor Raghuram Rajan's return to Booth after three years of serving as the governor of the Reserve Bank of India, Kole said.

International applications for next year's class have already stabilized, Kole said.

"We're not seeing continued deterioration in our international applications," she said.

Northwestern's Kellogg School of Management saw total applications decline from 4,595 in 2017 to 4,471 this year. It is the lowest application total since 2015, according to data supplied by the school.

International students comprise 34 percent of the incoming class for the full-time two-year program, "consistent with our class composition over the past five years," according to Kate Smith, assistant dean of admissions and financial aid at Kellogg. Kellogg does not report how many applications it receives from abroad.

While MBA programs have folded in recent years at schools such as Wake Forest, Virginia Tech and the University of Iowa, elite programs like Booth still have "many, many people" to fill each seat, Kole said.

Shifting to a more domestic student body, however, diminishes diversity and could prove costly to the U.S. economy over the longer term, Kole said.

"If entrepreneurial, talented future business leaders are discouraged from coming to study in the U.S., they will take their ideas and potential businesses elsewhere," Kole said. "They're not creating jobs. It's going to be a big loss for our country."

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