Columbia University in New York City (Photo by Rob Kim/Getty Images)
If you’re in your mid-to-late 20s and you were recently laid off or have found that the recession has greatly limited your upward mobility, you might be thinking this would be a great time to get an MBA degree. You would certainly be right.
Problem is, you should also expect to be in a long line. A very long line. Just about everyone in business school admissions expects to see a significant jump in applications for the next 2020-2021 admissions cycle which officially begins in September. The only question: How big will it be.
Some observers are predicting it could be an all-time record. A sign of what’s to come occurred earlier this week when Harvard Business School surprised many by announcing that it would enroll a class this fall of just 720 MBA candidates—well below its more typical incoming group of 940 students. That’s because HBS allowed every admitted student who wanted a deferment to get one. An estimated 30% of the slightly more than 1,000 applicants admitted to HBS decided to wait out the pandemic.
Many were international students who couldn’t get a student visa in time or are still worried that travel restrictions will remain in place. Some admits who deferred, including domestic students, didn’t want to start their MBA program with a hybrid of online and in-person classes.
Those 300 admits who passed on Harvard this month aren’t disappearing. They will show up over the next two years. At the very least, then, this year’s shortfall will lead to next year’s overflow, with at least 150 classroom seats already taken before anyone files an application by Harvard’s round one deadline of Sept. 8th.
Even though Harvard’s more liberal approach to deferments this year was not followed by most of its peers, which maintained their case-by-case assessment of such requests, other top MBA programs are also expected to have spillover into the next admissions cycle as well. “I predict the other MBA programs are going to find themselves in a similar position in the fall in terms of shortfalls in students and revenues,” says Tyler Cormney, co-founder of MBA Prep School, a leading MBA admissions consultant.
The primary reasons for an application boom, however, are historical. When the economy slumps, applications to graduate schools tend to boom. That’s largely because young professionals get laid off and partly because the opportunities for advancement disappear even if they manage to hold onto their jobs. “Some applicants I have spoken to see the MBA as a safe harbor and imagine that graduating business school three years from now will mean entering a much stronger job market than the one they will be leaving in the fall of 2021,” adds Cormney.
Besides that historical trend, however, there’s the fact that after five years of an overall decline in apps to full-time MBA Programs and three years of drop-offs for the top schools, there is pent-up demand for graduate business education. In the past two years alone, applications to the MBA programs ranked among the top 10 have fallen a combined 12.3%. The depth of the recession, as measured by the more than 40 million people who are now filed for unemployment benefits in the U.S., is another factor. Many young professionals are being shown the door at such companies as Airbnb, Uber, and Google as those firms sharply curtail or suspend operations and reduce their reliance on contractors.
And finally, the prospect of a Trump defeat (with the president behind in double-digits in several polls) will likely lead to increased interest in U.S. schools from international applicants who have been turned off by all of the anti-immigration rhetoric and uncertainly of work visas in the past three and one-half years.
The evidence of a monster year can be seen in everything from inquiries at business school admission offices to the increased business being booked by MBA admission consultants who are helping candidates prepare for the next round of deadlines.
“About two weeks into the coronavirus pandemic, when the paralysis and shock started to fade, the volumes of inquiries for round one MBA deadlines sharply increased,” says Esther Magna, a principal at Stacy Blackman Consulting, one of the largest MBA Admissions consulting firms. “By every measure since then– including numbers of inquiries, visitors on our website, clients who have signed-on for services–we see that interest in the MBA has increased for us by at least 50% relative to last year at this time. There are weeks when I think demand has doubled.”
The increase, she adds, will lead to one of the most competitive admissions seasons ever. “Our prediction is that MBA demand will increase significantly for the top MBA programs,” says Magna. “More than that, the caliber of the applicant pool with respect to diversity, leadership, industry, and career visions will skyrocket in the application season that is upon us. Both quality and quantity are about to be re-defined.”
Put it all together and it’s something of a perfect storm: Bad for applicants to the highly selective schools that routinely turn down the vast majority of their candidates but good for schools that have been waiting for an upturn in MBA interest for some time now.
