The Sharp Rise in Applications to Business School - Everyone Wants an MBA

Five months ago, we told BSchools readers without business degrees that they needed to drop what they were doing and apply to business school without delay. Readers might recall reading that piece because it contained an impassioned plea from the dean at the University of Rochester’s Simon Business School. Dean Andrew Ainslie clearly sounded worried that Covid-19 was going to decimate the already anemic admissions profiles at most business schools, including his own.

Dean Ainslie needn’t have worried, because nobody could ever have predicted the extent to which readers would respond. In a word, applications to MBA and specialized business master’s degree programs are exploding. For the first time since the Great Recession in 2009, applications to MBA and business master’s programs are surging at almost every university in every region of the world. And this trend appears to apply irrespective of business school rankings, or whether the programs are on campus, full-time, part-time, or online.

This is the most significant change to rock graduate education in ten years. We knew it was coming, and now it’s here.

Darden’s “Crazy” 364 Percent Increase: Why?

The University of Virginia’s Darden School of Business had announced that its Round 3 applications shot up over last year’s volume by a staggering 364 percent, an unexpected result Dean Scott Beardsley called “pretty crazy.” But why did that happen?

In part, it’s because graduate management education is well-known to be counter-cyclical, in the sense that business schools offer applicants a safe harbor during economic downturns. During expansions, business school applications plummet. Throughout such economic booms, jobs and opportunities for career growth are abundant, and many potential applicants see less of a need for an MBA degree.

But typically, when the economy goes sideways and college graduates lose their jobs, many of those with several years of work experience apply to MBA programs. Those with less than two years of experience apply to specialized business master’s degree programs, which are widely viewed as technical “pre-experience” degrees. We talk about these trends at length in our August 2019 BSchools guide, “The Buyer’s Market for MBA Degrees.”

However, during previous recessions, not many business schools racked up gains in applications approaching 400 percent like Darden’s. What distinguishes Darden is that this business school introduced an innovation radically disruptive among top-25 business schools: it stopped requiring from all applicants the GMAT and the GRE.

With test centers around the world suddenly closed due to COVID, Darden’s admissions office would accept a broad spectrum of substitutions instead of GMAT and GRE scores. Those substitutions fall into three categories:

• Undergraduate entrance exams: SAT, ACT
• Other graduate entrance exams: Executive Assessment, LSAT, MCAT, etc.
• Professional certifications: CPA, CFA

What’s more, admissions director Dawna Clarke encouraged applicants to document “all alternative evidence of strong academic merit,” including but not limited to “post-baccalaureate relevant coursework.” Then the business school even offered to delay its final application deadline by more than three months, and even “nudge” writers of candidate recommendation letters.

The unexpected result was that Darden’s admissions officers witnessed applications suddenly skyrocket beyond their wildest dreams, and they weren’t alone. In mid-July, Blair Sanford, an assistant dean for full-time MBA and master’s programs at the University of Wisconsin’s business school, told the Wall Street Journal that dropping the GMAT requirement abruptly boosted enrollment by about 30 percent over last year. Moreover, sources at the George Washington University School of Business told the Journal that they were also among the MBA programs witnessing applications surges after dispensing with requirements for testing.

Darden’s change wasn’t entirely unprecedented in the history of graduate management education. After all, MBA admissions testing didn’t exist before 1953, when the Educational Testing Service created the Graduate Management Admissions Council (GMAC) out of nine business schools. And these days, many MBA programs waive their GMAT requirement in exchange for a number of years of work experience or other qualifications. We point that fact out in our FAQ guide “What is a GMAT Waiver? When is the Requirement Waived?”

But this was the first time in 23 years that a top-25 business school quit requiring the GMAT from all applicants. The only other instance in the modern era occurred when the Harvard Business School had dropped the GMAT for eleven years, from 1986 to 1997.

And Darden’s “no GMAT, no GRE” experiment might have ended quickly had allegations of poor customer service and rampant cheating in the summer of 2020 not turned the introduction of the GMAT through home computers into a debacle. We examine these factors further in our detailed guide, “How Do I Prepare for the GMAT?”

The “No GMAT” Movement Gains Traction

Nevertheless, Darden’s experiment continues. In fact, although receiving light coverage in the business press, the snowballing list of business schools that quickly copied Darden’s new policy appears to add new MBA programs every week. Besides Darden, BSchools found 23 examples of business schools that used to require the GMAT or GRE before Covid, but are now “test-optional” MBA programs for the foreseeable future:

• University of North Carolina at Chapel Hill, Kenan-Flagler Business School, where at the time of this writing in October 2020, 40 percent of newly enrolled students did not submit GMAT or GRE test scores
• Arizona State University, W.P. Carey School of Business
• University of Maryland, Robert H. Smith School of Business
• Northeastern University, D’Amore-McKim School of Business
• George Washington University, GW School of Business
• Johns Hopkins University, Carey Business School
• Ohio University College of Business
• Seton Hall University Stillman School of Business
• University of Alabama at Birmingham, Collat School of Business
• Massachusetts Institute of Technology, MIT Sloan School of Management
• Northwestern University, Kellogg School of Management
• Emory University, Goizueta Business School
• University of Texas at Austin, McCombs School of Business
• Boston University, Questrom School of Business
• University of Rochester, Simon Business School
• University of Arizona, Eller College of Management
• University of Wisconsin, Wisconsin School of Business
• University of Miami, Herbert Business School
• Georgia Tech University, Scheller College of Business
• Rutgers University, Rutgers Business School
• Southern Methodist University, Cox School of Business
• University of Iowa, Tippie College of Business
• Loyola University Chicago, Quinlan School of Business

Greatest MBA Applications Gains

Besides the huge gains at Darden and Wisconsin, here are 17 more examples of MBA programs in the U.S. and Europe that announced surging applications. Note that 11 of these business schools posted gains of 20 percent or more.

MBA Applications: Not the Whole Story

But it’s not just MBA applications that are way up. All sorts of indices measuring general interest in graduate management education are at their highest levels in at least a decade.

For example, at BSchools our website traffic is at record levels. Our traffic skyrocketed by more than 625 percent in the past eleven months, soaring 257 percent just since April 2020. Poets and Quants also reported that their site’s traffic in August had surpassed the highest level ever recorded since that site’s inauguration ten years ago.

Moreover, several MBA admissions consultants are reporting that their business has gained 50 percent or more over 2019 levels. Fortuna Admissions consultant Caroline Diarte Edwards, a former admissions director for the INSEAD business school’s MBA program near Paris, also told the Journal that her firm’s inquiries grew 75 percent over those last year.

Furthermore, MBA hiring appears to have rebounded. As reported by the Financial Times in September 2020 and according to GMAC, only about 77 percent of recruiters planned to hire MBAs in July 2020. But the most recent update to GMAC’s survey disclosed that 90 percent of recruiters now plan to hire MBAs that graduate in 2021, paying most graduates an annual salary of about $115,000.

What Happened at Michigan Ross?

Like at Darden, the extended final round applications shot up at the Ross School of Business at the University of Michigan. In the case of Ross, this increase amounted to an impressive 126 percent.

Darden’s 364 percent Round 3 boost raised that business school’s overall 12-month increase to about 25 percent. But by contrast—believe it or not—Ross closed out the year with a lower annual applications total. Oddly enough, 16 percent fewer candidates applied to Ross than applied last year, and this is the only business school we’re aware of that has announced a lower annual total for the year.

The full-time MBA program’s managing director of admissions at Ross, Soojin Kwon, credits her program’s Round 3 surge to a new STEM (science, technology, engineering, and mathematics) curriculum the business school had introduced late in the admissions cycle. Apparently, Ross was flooded with applications from foreign candidates as soon as they had learned of the school’s STEM certification from the U.S. Department of Homeland Security’s Citizenship and Immigration Services division (USCIS).

Not all business schools offer a STEM-certified MBA program, which is critical for foreign MBA graduates of U.S. universities who also seek extended work experience in the United States. Under the related Optional Practical Training (OPT) program, foreign graduates of U.S. universities can remain in the nation while they receive up to 12 months of training through work experience. But if they graduate from a STEM degree program, USCIS permits these graduates to work in the United States for an additional 24 months, raising their total work time here to almost three years.

However, besides the late STEM certification, Kwon suggests other factors were in play. She told Poets:

We expect that this is a Covid blip. Part of the reason is that we were among the handful of schools that offered international students the option to defer. Since many took us up on it, we admitted more applicants in their place.

That explanation sounds only remotely plausible, given that foreign candidates last year made up roughly half of the number that applied to Ross in 2017. And despite Kwon’s explanation, the overall 16 percent drop still seems curious. Reports of the plunge came relatively soon after two high-profile events: First, after Ross broke into the U.S. News and World Report top-10 rankings, and second, after the business school also introduced to widespread press coverage a new, big-budget blockbuster online MBA program. As we’ve discussed, the online program reportedly required as much as 300 faculty hours and $10 million to produce a typical course.

She continues:

There was also a domino effect caused by admitted students at other [business] schools choosing not to enroll, and opening up spots for applicants who may not have been admitted in previous years, or even in the same year, as some schools chose to do.

What she doesn’t mention is that although Ross continues to require admissions testing, almost 40 percent submitted the GRE instead of the GMAT. That’s more than three times the percentage that did so in 2019 and one of the largest GRE proportions of which we’ve ever heard at any business school. And therein might lie a clue.

Truth be told, one wonders if the real reason for the applications collapse is that Ross actually lost a substantial number of defectors to the other highly-ranked business schools in the list above that killed the GMAT and the GRE. Specifically, MIT Sloan, Northwestern Kellogg, UNC Kenan-Flagler, and Emory Goizueta may have siphoned off many of the applicants to Ross.

To list the most elite brand in higher education on their resumes and LinkedIn profiles, solid candidates might still put up with GMAT and GRE testing because the Harvard Business School demands it. But during a pandemic when at least 23 competitors already throttled that anachronistic requirement—including two M7 business schools—whether such candidates will put up with admissions testing for other business schools like Michigan Ross seems like the sort of question Ms. Kwon really should ponder.