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Getting accepted to a top US MBA programme has been particularly cut-throat this year as a rise in applications from international students, the economic downturn, and a marked increase in the potential student-age population have combined to make this admissions cycle the most competitive since the end of the technology boom.
Admissions directors in the US have seen a double-digit percentage increase in applications compared with last year, continuing an upward trend after several years of decline. Applications to the Johnson School at Cornell University rose 23 per cent over last year, for instance, while applications at Berkeley’s Haas School of Business were up more than 15 per cent.
“We’re having a difficult time selecting a class because the applicant pool is so strong,” says Peter Johnson, director of MBA admissions at Haas. “The overall quality is very high – applicants have solid academic experience and rich work experience.”
Many business schools have reported a big increase in the number of applications from students outside the US. The Graduate Management Admissions Council, which runs the GMAT entry test for business schools, saw a 6.2 per cent rise in registrations this year within the US and 21 per cent increase outside the US.
“International applications to US schools are increasing, particularly from countries like India and China, and Korea to some extent,” says Peter von Loesecke, chief executive of the MBA Tour, an independent company focusing on business school admissions. “We’ve also seen an increase from Brazil and Russia.”
At the Johnson School, applications from overseas students were up 30 per cent this year over last year. Applications from students in India alone are three times that of two years ago, according to Randall Sawyer, director of admissions. “We’re seeing a lot of international students who believe the best place to get an MBA is the US. The brand is incredibly strong,” says Mr Sawyer.
Soojin Koh, director of admissions at the University of Michigan’s Ross School of Business, says that “because of globalisation, there’s an increased interest in going abroad to get your degree. Foreign students want to come here, but more and more American students are wanting to go overseas.”
The looming recession is another contributing factor to the rise in applications. The volume of applications tends to run counter-cyclical with the strength of the economy: a downturn often sends students back to school. The logic goes that aspiring executives need to acquire expertise and skills to make themselves indispensable in the workplace, particularly during lean times. Says Mr von Loesecke: “You see it most often in industries where there’s a lot of trouble on the horizon, such as financial services.”
Mr von Loesecke adds that the break in the business cycle offers many young people an opportunity to take time out for education without forfeiting big bonuses and lucrative stock options. This has happened before: after the tech bubble burst and dotcom mania subsided in early 2000, the job market contracted and business schools saw an increase in applications.
“Given an opportunity, some people leave, take the package and go to business school to ride out the recession,” he says. “It’s not a bad strategy.”
A further reason for the rise in applications is demographics: the potential graduate school-age population is simply bigger today than it was even a decade ago. The so-called millennials, born between 1980 and 1994, are a larger generation, which has translated to a larger applicant pool at business schools.
“The millennials are coming in,” says Mr Sawyer. “The average age of entering students for our two-year programme is 27, but it could slip down to 26.”
These young people also tend to apply to a bigger number of schools, says Ms Koh, at the Ross School of Business. “Anecdotally, I’ve heard that students are
back to applying to more schools,” she says. “It was on average two to three schools a few years ago, now it’s about four to five.”
Finally, say admissions directors, business schools have expanded their recruitment of talented students, which has had an impact on the number of applications. They hold more events in more cities – both at home and abroad – and have stepped up efforts to woo prospective applicants.
“The value proposition of an MBA is strong,” says Mr Johnson, at Haas. “There’s a key awareness among potential MBA applicants of the value of the MBA. People clearly know it’s the path to very attractive career options.”