As US business schools enter the 2010 admission season, Guest Writer Nunzio Quacquarelli of QS TopMBA.com speaks to Admissions Officers of four key schools – Wharton, NYU-Stern, Boston University and Duke-Fuqua on how the economic crisis affected their admissions in 2009 and the outlook for the future.
We have witnessed one of the most turbulent years in recent economic history. What has been the impact on MBA applications?
“At NYU Stern, our applications this past year were incredibly robust. To give you some context, the prior year, we experienced a nearly 20% increase in applications to our full-time MBA program, the second highest number of applications received on record. We maintained this application volume this year, says Isser Gallogly, Executive Director, MBA Admissions, NYU Stern School of Business
J.J. Cutler, Admissions Director at The Wharton School, feels the financial crisis actually hasn’t changed the quality of our applicant pool, which is still as high as ever. We’re slightly up in terms of total applications. I think many people thought that we might be up dramatically, and that didn’t happen. So that makes us think that for people who are applying to a place like Wharton, it’s a pretty well thought through decision that has been planned for quite some time.
Can you highlight some of the application trend differences by country?
Cutler observes in some countries, Wharton has seen a decline in applications. In the U.S. our applications are up double digits. Again, overall, we’re up in the low single digits, so I think the financial crisis hasn’t really impacted that so much. By contrast, NYU did not see a dramatic shift in either the domestic or international applicant pool.
Chris Storer at Boston University reports big country variations. Overall, we experienced a small decrease in applications (6%). However this was most notable from India (down 34%) and Korea which also saw a sharp fall. As expected for US applicants, we saw a significant increase in applications (up 14%) particularly from the finance sector.
What is causing the significant variation in application trends by country?
Last years worldwide financial crisis brought about severe restrictions on credit with many lenders reducing or cancelling loan programs and student loans have not been immune to the problems of the credit crisis. Fuqua began exploring other loan options for international students after we discovered the new terms for loans offered by our previous provider were less favourable than we had hoped,” says Blair Sheppard, Dean of Fuqua School of Business at Duke.
Cutler agrees, because of the crisis, on the financial aid side everyone is evaluating the timing and the decision to get an MBA much more carefully, much more surgically and precisely, than they have in the past.
Have you resolved the loan problem this year?
Sheppard has tackled this issue head on. At Duke, we are very pleased to announce a pending arrangement with a local lending institution to provide international student loans next year at the very competitive rate of prime plus 5% with no origination fee. With the current prime rate of 3.25%, the rate would be 8.25%. These loans will not require a U.S. co-signer. The agreement proposes that Duke University and the Fuqua School of Business will provide guarantee against loan losses of the lender.
Wharton has also recently announced a new loan program for international students. These are the population that is probably feeling the impacts of the global financial crisis the most. Our new loan scheme is essential to attract the best domestic and international students. Our students also receive, on average, about $12,000 in financial aid says Cutler.
Do you feel that young professionals in employment are worried about giving up secure jobs for an MBA? What advice would you offer to people in this mindset?
So far we havent actually experienced this trend. In fact, our yield rate (number of admitted students who plan to enrol) is about 5 points above our historical norm, indicating an opposite trend says Storer.
But Cutler remains optimistic. We think that this financial crisis is an opportunity too good to waste. There will be new industries and new sectors that emerge that will have a high need for people with MBAspeople who are analytical, people who can solve complex, unstructured problems. We think the skills we teach absolutely have been proven to set up success in new industries, in new economies. And so we think the value proposition is actually quite high. Whether starting salaries hold up or whether the job search will be easy, I don’t think we know yet. But now more than ever I think people need to differentiate themselves. They need to think about an investment in themselves.
Are you looking to grow international application numbers in the future?
At BU, our plan for the 2010 entering class is to maintain the international percentage between 33 and 35 percent of the incoming class, but continue to increase the diversity of nationalities represented along with depth of professional experience.
Wharton is, and has been for some time, the most international of the top-tier U.S. business schools: The class of 2010 had over 40% international students from 72 countries. In addition we have 84,000 alumni in 140 countries. Ankur Kumar graduated from Wharton in 2007 and has recently joined the MBA Admissions team. She feels strongly that having an internationally diverse student body was a key differentiator and key attraction of Wharton for me and my fellow class mates. The opportunity to live and go to school with so many interesting people from all around the world is an amazing learning opportunity both professionally and personally.
Blair Sheppard at Duke says “we intend to become the worlds first truly global business school, and the presence of an effective international student loan program is essential to this strategy. It is our strong belief that the participation of students from outside the United States is essential for both their education and the education of our domestic students. Duke will be attending over 40 cities on the QS World MBA Tour this Fall, in four continents.
What are predictions for application trends in 2010?
We dont expect a sharp cut back in applications next year says Cutler. People plan to take an MBA over several years as a key step in their career and short term economic volatility will only put off the less committed candidates. But of course you never know for sure.
Chris Storer at BU feels Its really quite early to predict for 2010, but our plan is to maintain and in some areas increase our recruitment efforts, even during this time of budget-tightening at many business schools. Setting expectations about opportunities to work in the U.S. post-MBA and educating prospective MBA students on the latest and ever-changing visa situation will be essential. That being said, companies want excellent candidates with global experience; many are and will continue to be hired by top firms.”
Nunzio Quacquarelli is the Editor of QS TopMBA.com and Director of the QS World MBA Tour. The tour visits India from November 28 December 7, 2009. Candidates can register now at topmba.com.