Nearly two-thirds of the full-time MBA programs in the U.S. saw declines in application volume last year, according to a study published on Sept. 17 by the Graduate Management Admission Council (GMAC).
The most severe declines occurred at business schools in the southwest, where 73% reported drops in application volume, and the Midwest, where 71% of the schools reported a downturn.
The Boom & Bust in Full-Time MBA Programs
Source: GMAC 2012 Application Trends Survey
GMAC found a significantly different picture outside the U.S. MBA programs in Asia-Pacific and Central Asia are booming. Applications to full-time MBA programs in Asia-Pacific, which includes Australia, China, Japan and Korea, were up at 79% of the schools while those in Central Asia, which includes India and Pakistan, increased 80%, largely as a result of domestic applicants in those countries.
Though many prominent business schools have reported their application numbers, GMAC’s Application Trends Survey is the first and only comprehensive look at worldwide application flow. This year’s study is based on reports from 359 business schools reporting on 744 different business master’s programs in 46 countries, 42 states, and the District of Columbia.
Full-Time MBA Programs Reporting Change In Application Volume
Source: GMAC 2012 Application Trends Survey
Globally, 51% of full-time, two-year MBA programs saw decreasing volume for the incoming class of 2012-2013 compared with last year. However, there was some good news on this front. GMAC said that 24% of programs said the decrease was slight compared with 2011 (less than 10%), and the percentage of programs seeing increasing volume (43%) rose for the first time since 2008. In the U.S., however, only 32% of the business schools said that applications to their full-time, two-year MBA programs were up.
Respondents told GMAC that economic factors around the world are making prospects think twice about giving up a job and returning to school. “The economy is picking up and students are finding full-time jobs or have received promotions and do not want to leave to go back to school for two years,” an admissions official told GMAC researchers.
The study found that full-time two-year MBA programs worldwide received a median of 267 applications, more than twice the median of full-time one-year programs (135) and three-and-a-half times the median of part-time MBA applications (75).
Specialized Master’s programs continue their robust growth
Yet, while full-time MBA applicants fell at many U.S. schools, the study found that other master’s programs, especially online and specialized master’s degrees, more than offset the decline. Some 73% of Master in Management programs reported an increase in applications for the 2012–2013 class compared with 2011, and nine% reported no change. With a combined 82% of programs reporting steady to increased volume, this was the strongest year for Master in Management programs since GMAC began tracking trends for this program type.
Master of Accounting programs also experienced robust growth in application volume. Some 74% of these programs reported increased applicants, up from 51% in 2011. “Not only did three out of four programs report increased application volume,” GMAC said, “but nearly half (49%) of programs reported growth levers that were ‘up significantly’ (21% or more).”
The majority (68%) of Master of Finance programs reported increased (57%) or stable (11%) application volumes for the incoming class of 2012–2013, but there is a decrease in application volume growth this year compared with recent years. Some 57% of Master of Finance programs reported an increase in application volume in 2012, down from 83% of programs that reported an increase in 2011. Despite slower growth, 78% of programs expect to increase their target class size for 2012
In 2012, GMAC said all MBA program formats saw an increase in the percentage of programs reporting growth compared with findings from 2011. Fueled by application gains among online/distance offerings, 46% of all MBA programs saw improved volumes in 2012, while 45% saw declines and 10% reported no change. By comparison, in 2011 just over a third of all MBA programs (36%) reported increases in application volume
Women accounting for higher percentage of applicant pool
In 2012, GMAC said, women accounted for 39% of the applicant pool for full-time two-year MBA programs, up from 35% in 2011. The largest shift was seen among applicants to executive MBA programs. In 2012, 37% of executive MBA applicants were women, in contrast to 2011, when women accounted for only 27% of executive MBA applicants. The numbers are even higher, however, when you count other master’s programs in business. GMAC said that 41% of the applicants to part-time programs were women, while 44% of the applicants to flexible programs and 43% of the applicants to online/distance programs were women.
Foreign applicants now account for a third of the pool for all MBA programs
Foreign candidates represent 33 percent of the application volume for all MBA programs in 2012. GMAC said that programs in Europe boast the greatest showing of foreign candidates (61%), largely a consequence of the relatively small domestic applicant pool in any one European nation.
The full-time one-year MBA applicant pool has the greatest proportion of foreign applicants of all program types; 61% of candidates to these programs are foreign citizens. That’s largely the result of the number of one-year MBA programs in Europe. Online/distance and part-time programs have a much lower 13% of candidates, but the lowest is part-time lock- step MBA programs at 10% of applicants.
Worldwide, Indian, Chinese, and US citizens accounted for the greatest number of foreign applicants to MBA programs for 43%, 27%, and 6% of MBA programs, respectively. Chinese citizens also accounted for the greatest increase in application volume for MBA programs globally, as reported by 31% of MBA programs, followed by Indian and Saudi Arabian citizens, reported by 16% and 8% of MBA programs, respectively.
MBA programs in the U.S. reported that citizens of India (44% of programs), China (35% of programs), and Saudi Arabia (7% of programs) accounted for the greatest number of foreign applications in 2012. They also told GMAT that the greatest increase in foreign applications volume came from China (40% of programs), India (16%), and Saudi Arabia (12%).
Most business schools are working hard to increase their applicant flow, GMAC found. The study discovered that the vast majority of all MBA programs (88%) conducted special outreach efforts in 2012 to attract more candidates (Figure 11). Working professionals were the most commonly recruited candidate type, targeted by 55 percent of MBA programs, followed by foreign candidates (43% of programs), and women (40%). Recruitment trends vary by program type. Full-time two-year MBA programs (70%) and full-time one-year programs (60%) reach out most often to foreign candidates. Women were highly recruited by more than half (54%) of full-time two-year MBA programs and 47 percent of executive MBA programs.
Percentage of MBA Programs Doing Outreach in 2012
China and India topped the lists of foreign countries where all MBA programs conducted recruiting activities in 2012 to attract more candidates. Full-time two-year MBA programs also conducted special outreach to prospective students in South Korea. The United States ranked third among the top countries where full-time one-year, part-time, and executive MBA programs targeted outreach efforts. Flexible MBA programs included Saudi Arabia among their top three countries for candidate recruitment.
Fewer than 20% of full-time MBA students will get help from employers
This year, for the first time, the Application Trends Survey asked respondents for information about anticipated levels of employer funding for incoming students. Overall, 77% of MBA programs indicated that at least some of their students enrolling in the class of 2012–2013 will receive funding (partial or in full) from their employers.
The expected level of employer funding for the incoming class varies widely by program type. About 68% of full-time two-year MBA programs reported they expect some of their students to receive employer funding, but the majority of these programs (56%) reported that fewer than 20% of their students will receive employer funding. Similarly, 81% of full-time one-year MBA programs expect that some of their incoming students will receive employer funding, however, two-thirds (65%) of the programs reported that fewer than 20% of students will receive such funding.
Students enrolled in online/distance MBA programs are more likely than incoming students in all other MBA programs to receive employer funding. The majority of online/distance MBA programs (52%) reported that between 40% and 59% of their incoming class will receive employer funding. And, not surprisingly, nearly half (49%) of executive MBA programs expect that between 40% and 100% of incoming students will receive funding through their employers.
Overall, 492 programs from 229 responding schools were in the United States; 114 programs from 62 schools were in Europe; 50 programs from 27 schools were in the Asia-Pacific region; 34 programs from 18 schools were in Canada; 24 programs from 4 schools were in Latin America, 13 programs from 11 schools were from Central Asia; and 17 programs from 10 responding schools were in the Middle East/Africa.
Geographically, the survey sample represents 46 countries worldwide and 42 states and the District of Columbia in the United States. Combined, participating programs received more than 484,385 applications during the 2012 application cycle. All application numbers and trends in the GMAC report refer to complete applications that contained all documents needed for making an admission decision, which were received on or about July 1, 2012 for the 2012–2013 incoming class.