Is Now The Right Time To Apply To The Top Ranked MBA Programs

Graduate School Business School - MBA
1

The economy is strong. Unemployment is low. MBA applications are down. And a recession may be near.

Typically, it takes one about 2 years of preparation for applying to an elite fulltime MBA program. Prepping for the GMAT or GRE, getting professional job related recommendations, interviewing and composing application essays all while working fulltime requires substantial time & effort.

The cost of earning an MBA from a top ranked fulltime program can run as high as $250,000 plus the loss of almost two years of income. While Stanford’s Graduate School of Business has the highest projected cost for a fulltime 2 year program, all top 10 ranked MBA programs are well over $200,000 (tuition, fees, books, room & board) for their 2 year programs.

With these astronomical costs plus the loss of almost two years of income, is it any surprise that applications to the top 25 MBA fulltime programs are down over the past 3 years in this robust economy ?

Last application cycle, one top 25 MBA program received just 741 applications (Indiana) while perennial leader Harvard received 9,228 applications down about 6.7% from the prior year and down 10.8% over the prior three application cycles. Indiana was down an astounding 31.5% from last year, and down over 40% during the last three admissions cycles.

How many applications did each top 25 fulltime MBA program receive during the last admissions cycle ?

Harvard received 9,228 applications a decrease of 6.7% from last cycle
Stanford received 7,342 apps down 5.8%

Penn-Wharton rec’d 5,905 apps down 5.4%
Columbia rec’d 5,876 apps down 2.5%
MIT- Sloan rec’d 5,200 apps down 6.5%

Chicago- Booth rec’d 4,433 apps an increase of 3.4%, but down 5.2% over 3 years

Northwestern- Kellogg rec’d 3,779 apps down 15.5%
NYU- Stern rec’d 3,518 apps down 7%
UCal-Berkeley rec’d 3,450 apps down 9.7%
Yale- SOM rec’d 3,194 apps down 15.6%
Duke- Fuqua rec’d 3,036 apps down 14.6%

Michigan- Ross rec’d 2,990 apps down 6.2%
UCLA- Anderson rec’d 2,817 down 17.7%

Virginia- Darden rec’d 2,190 apps down 3.9%
Dartmouth- Tuck rec’d 2,032 down 22.5%

USC rec’d 1,899 down 5.9%
Univ. of Texas-Austin rec’d 1,941 down 6.6%
UNC Keenan-Flagler rec’d 1,323 apps down 24.7%
Georgetown rec’d 1,358 apps down 6.9%
Emory- Goizueta rec’d 1,022 apps down 24.2%

Indiana- Kelley rec’d 741 apps down 31.5%

2

2 years of prep? that’s insane.

GMAT prep-- a few hours at a time spread out over a few months.

The rest? Done on an as-needed/when you’ve got the time basis. It took me a total of thirty seconds to ask my boss to write a recommendation- and then I had it a week later. She asked HER boss to write an additional one- I wasn’t even involved. And a quick phone call to my favorite professor from undergrad. How does that take two years? You need two years of work experience for the top schools (in most cases) but that doesn’t mean it takes two years to apply!!!

I think the strength of the economy and the ability for a kid with a BA to get a good job is driving the shift. The next recession- the apps come flying back.

3

Agree that application requirements can be completed in well less than a year. Many take a few months to prep for the GMAT or GRE before making a decision as to whether or not to apply to fulltime MBA programs which require one to sacrifice almost 2 years of income–in addition to paying substantial sums for tuition, fees, books, travel, room & board.

Many potential applicants retake the GMAT ot GRE because they only want to apply to M-7 MBA programs where GMAT scores have increased dramatically over the past several years.

Some start the process early knowing that standardized test scores are valid for 5 years, then work toward a promotion or other business accomplishment which can be reflected on their MBA application.

For some, leaving a career in progress may be easy, but for others the timing must be right.

In closing, I would like to note, as stated in my original post which started this thread, I am only referring to those applying to top ranked, fulltime MBA programs— a near 2 year committment which often costs between $360,000 to well over $400,000 when lost income (opportunity cost) is considered.

4

Thank you for the timely post. One of my relatives is applying now to top MBA programs and I forwarded your info to them (parent and kid).

5

Oops, I forgot to add that my relative sent the app in a Friday or two ago and then on the Monday following got a call from the school offering to setup an interview. Is this school desperate or what? I was told by my relative that the chances of admission are in the 60%+ range at this school when there’s an interview setup. :smiley:

6

In the business world, I’m hearing more and more that the vast majority of workers do not need an MBA to advance in their career and be successful and is likely one of the reasons they are opting out of the traditional two-year MBA program. In addition, the one’s that want an MBA but want to maintain their job will pursue an Executive MBA, many times paid for by their employer.

7

Many years ago, Executive MBAs were almost exclusively employer paid. In fact, many, maybe most, required a single lump sum payment upfront which covered all tuition, fees, program materials & foreign travel. Today, Executive MBAs are increasingly paid for by the student.

Although one can advance without an MBA, but often with a one year specialty masters degree, MBAs from the top programs enjoy very high pay and signing bonuses and often multiple job offers.

Many MBA programs suffer from low enrollment due to the soaring tuition costs combined with the sacrifice of two years of earnings in a very healthy economy. Additionally, online MBA programs have gained recognition & respect, and can be completed on a part-time basis while continuing to work fulltime & receive employer reimbursement.

8

Many MBA programs offer scholarships–Indiana-Kelley offers a lot of scholarships. Great time to apply to IU-Kelley since apps are down & scholarships are numerous.

The University of Washington MBA program does not offer scholarships, but almost all graduates receive great job offers by graduation or within a short time thereafter. UW tuition is very reasonable for residents of Washington State & reasonable for non-residents.

Some elite programs compete with scholarship money for top applicants. Get accepted by two or more & receive a scholarship offer from one, then leverage that into offers from some of the others to which that applicant has been accepted.

9

I saw the value of an MBA for a specific career pivot. The pivot would never, ever have been possible if I didn’t go for a top tier MBA. Therefore, cost benefit was very, very easy. No way, was I going to remain on my existing career path.

Economic Peak = unemployment low = pay high = MBA application demand down = Time to apply

Recession = unemployment high = pay low = MBA application demand up = Time to graduate and ride the next bull market up

I applied to M-7s during an economic peak and it worked out very well for me.

Applications are down when work is plentiful.
Applications will go up dramatically when, not if, the next recession hits.

If one graduates now pay will be high, but FIFO still applies in corporate America. A higher than normal percentage of recently minted MBA grads will be fired when the next recession hits bottom.

I graduated with my MBA during the depths of a recession. It was very difficult to pull off my pivot despite the fact I was graduating from the #1 MBA program in the country. Since jobs were few, companies were playing it very safe and only wanted to hire MBAs with experience in the industry. Companies in my old industry wanted to hire me, but I refused. I was changing come heck or high water. Fortunately, like me, some MBAs with work experience in my new industry were insisting on a pivot themselves, (a few to my old industry!), so I did land a couple of late offers.

MBA pay in my new industry had halved from the economic peak, gulp! However, what I didn’t know until I arrived at work was how the decks above me were cleared of recent grads.

The economy took off and in no time, I was making multiples of what I made pre-MBA, saving a ton, and paid off all my loans within 2 years of graduation.

If one thinks we are approaching an economic peak sometime in 2020, then it is a good time to bank another year of good pay while applying to M-7s and ride out the recession in the friendly confines of an M-7 campus while your ex-comrades are receiving diminishing paychecks and looking over their shoulder for a pink slip every day. No question it can be difficult to secure a new job at the bottom of a recession, but once in, it is a great spot to be.

10

The M-7 MBA programs (Magnificent Seven or, sometimes, the Magic Seven) are:

  1. Harvard

  2. Stanford GBS

  3. Penn-Wharton

  4. Chicago-Booth

  5. Northwestern-Kellogg

  6. Columbia Business School

  7. MIT-Sloan

Northwestern University–Kellogg interviews all applicants. The program encourages teamwork.

Chicago-Booth is best for those who are quantitatively oriented.

11

In addition to the M-7 MBA programs, these schools place well:

Yale-School of Mgmt.;
Dartmouth-Tuck;
UCal-Berkeley-Haas
Duke-Fuqua
University of Washington–Foster (places exceptionally well)

NYU-Stern also places well.

Virginia–Darden
Cornell-Johnson
Michigan–Ross
Texas at Austin–McCombs
Emory–Goizueta

12

Arizona State University–Carey offers scholarships to all accepted fulltime students. Great for Supply Chain Management.

This year the full tuition & fees scholarships to all accepted fulltime MBA applicants was reduced, but remains substantial.

If accepted without a scholarship to any MBA fulltime program, then ask if scholarship funds are available or if TA positions with tuition remission/reduction are available.

13

So I have a question and I am very ignorant when it comes to this topic but learning a lot already.

What about international MBA programs?
I saw one in Israel (not Technion) that is a one year full time MBA with a tech sector edge. It was like $25,000 with room and board. 30% are from the US…

So does this type of program have worth in the United States?

14

https://www.idc.ac.il/en/schools/business/graduate/pages/mba.aspx

They have 2 year MBA programs as well.
They claim when I emailed them that their students get placed and of course if planning on working internationally.

It seems a lot of their professors are from some of the best business program mentioned in your top 7-10 lists which I find interesting.

Classes in English.

Just wondering your guys /gals take on this?

15

https://www.idc.ac.il/en/schools/rris/graduate/pages/mba-oneyear.aspx

Not sure why the links are not working when I paste them? They work prior to pasting… Hmmm

16

I have never heard of this program. Probably not a wise investment for one who wants to work in the US.

There are a couple of excellent MBA programs in Europe, but the best employment placement is for graduates of the M-7 MBA programs–all of which are based in the US.

INSEAD, HEC Paris & London Business School all have excellent reputations in Europe & the Middle East.

17

The primary advantage of attending an M-7 or other super elite MBA program is for those seeking to change industries after working for several years.

There are hundreds of one year specialty masters degrees offered in the US which are much lower cost than an elite two year MBA program.

With so many high quality options available in the US for both one year & two year programs, there is no need to study abroad for those seeking placement in the US.

18

Thx. Their placement record in the States is high but just learning about it. Such a difference in costs. I know you get what you pay for…This program has Sam Zells name and influence all over it and why it was interesting to me. Thx.

19

The reason that I started this thread:

Applying to elite 2 year, full time MBA programs during a robust economy when applications are down:

means less competition at the highest ranked schools for admission

& less competition for merit scholarship awards

as well as more competition (increased scholarship money offers) among some elite MBA programs for the “best” applicants.

Our economy is cyclical. Many economists predict a recession in the next 2 years. If accepted, but the timing is not quite right, many MBA programs will permit an accepted applicant to defer admission for one year.

There is a hierarchy of schools even among the M-7 MBA programs with Harvard, Stanford & Penn-Wharton considered the most elite programs among the most elite at this time.

Arguably Chicago-Booth & Northwestern’s Kellogg School are next in line. While both are located in the Chicago area, they attract different types of students. Chicago’s rep is as a program for quantitatively oriented students who choose their own courses while Northwestern’s Kellogg School is well known for marketing, management and teamwork (as there are 6 or 7 required courses which students take as a cohort thereby establishing strong relationships & connections). Northwestern Kellogg interviews all applicants primarily to assess interpersonal skills. (Although I am not sure if this is true for Kellogg’s recently launched one year full time MBA program.)

This perception of the top 5 programs mirrors the US News rankings although historically Northwestern’s Kellogg has a history of being ranked higher than #5 and has frequently been ranked at #1.

Columbia & NYU-Stern (NYU is not considered an M-7 program) place well in high paying finance positions such as IB (investment banking).

MIT is among the M-7 and usually ranked at #5 or so by US News.

20

2019 acceptance rates & yields at the Top 25 MBA Programs:

  1. Harvard–12% acceptance rate 89% yield

  2. Penn-Wharton–22% & 66%

  3. Stanford–6.7% & 84.2% yield

  4. Chicago-Booth–22.5% acceptance rate & 59.5% yield

  5. Northwestern-Kellogg–26% & 48%

  6. MIT-Sloan–11.5% & 69.5%

  7. Columbia–19.1% & 67.2%

  8. UCal-Berkeley (Haas)–17.7% & 46.3%

  9. Dartmouth-Tuck–34.5% & 40.5%

  10. Michigan–Ross-31% acceptance rate & 45.6% yield

  11. Yale SOM–25.2% & 42.8%

  12. Virginia-Darden–36.3% & 42.5%

  13. Cornell–38.3% & 48% yield

  14. Duke–Fuqua–22.9% & 56.8%

  15. UCLA–26% & 49.2%

  16. NYU-Stern–26.1% & 39.1%

  17. CMU-Tepper–41.5% & 36.8%

  18. Texas-Austin–38% & 35.1% yield

  19. UNC-Keenan-Flagler–52.9% acceptance rate & 36% yield

  20. Emory–44% & 32.7%

  21. Univ. of Washington–Foster–36% & 38.9%

  22. USC–29.9% & 37.7% yield

  23. Georgetown–60.5% acceptance rate & 33.5% yield

  24. Rice-Jones–37.3% & 45.9%

  25. Indiana-Kelley–49.4% & 37.4%