The average GMAT scores of entering MBA classes at the top business schools often tell you more about the institutions than the applicants. How so? Because schools with stable or increasing GMATs are generally re-investing in their MBA programs, while schools with declining GMAT scores are more often than not milking the cow
Interestingly enough, a new study by Poets&Quants of average GMAT scores shows that the competition at the top is more severe than ever. Some 19 of the top 25 U.S. schools are reporting higher GMATs over the past five years, with just five programs reporting a decline in average scores. It’s a different picture in the second half of the Top 50 list where more schools have shown a decline than an increase: 13 out of 25 are down, while nine are up.
Call it grade inflation or just plain GMAT creep. But most of the truly elite full-time MBA programs have seen ever-increasing scores for their latest entering classes. In the last five years, for example, Harvard Business School’s average GMAT is up eight points to 727, Stanford is up six to 732, highest for any U.S. business school, and the University of Chicago’s Booth School of Business is up nine points to a record 723 for the entering class in 2013.
Vanderbilt leads all top 50 schools with highest GMAT score increases
Then, there are what you might call the more status conscious climbers. Vanderbilt University’s Owen School has increased its average GMAT score by 35 points to 688 in the past five years, the single biggest jump among the Top 50 schools. The University of Illinois at Urbana-Champagn has also posed some impressive gains: a 27-point increase to 661. Michigan State’s Broad School has upped its game with a 15-point rise to 655.
Gains like these don’t happen by accident. They occur because of a concerted effort by leadership to boost the school’s standing. Sadly, the reverse is true when GMAT scores go the other way. Double-digit declines, in particular, are a bright red sign that a school is losing the competitive fight for the best and the brightest. It’s also a sure bet that a school is not investing in its MBA program, but rather milking it for revenue to fund other parts of the university.
Top 50 schools with biggest increases in average GMAT scores
When GMAT scores go up, it’s often because the school is probably handing out increased amounts of scholarship aid to get the best students. When GMAT scores go down, it’s often because a school is falling behind its rivals, lacks leadership focus, and is in decline.
Purdue’s Krannert school has seen the biggest decline in GMAT scores in top 50
The single biggest signs of trouble–based on GMAT score declines in the past five years—show up at Purdue University’s Krannert School, which has suffered a 36-point plunge in average scores, the highest of any Top 50 business school. Wake Forest University’s Babcock School has had a 26-point drop, while UC-Irvine’s Merage School has reported a 21-point decline.
It may not be an accident that all three University of California business schools in the Top 50 experienced plunging average GMAT scores over the past five years when the state’s budget crisis has led to significant cuts in higher education. UC-Berkeley’s Haas School had a drop of four points, while UCLA’s Anderson School saw a five-point fall. Those are fairly minor declines compared to the 11-point drops at both the University of Washington’s Foster School and Ohio State University’s Fisher School.
So when you peruse the numbers, don’t look at the average scores as a hurdle for you to overcome. Turn the tables and look at the trend lines that show which schools are re-investing in their futures and which ones are merely milking the cow. You don’t want to sign up for an MBA degree at a school that isn’t investing in itself or its future.
Top 50 schools with biggest decreases in average GMAT scores
Average GMAT scores for the top 25 business schools in the U.S.
Source: Poets&Quants analysis from publicly available data from business schools