Three years of an economic recovery characterized by sluggish job growth are proving to be a significant deterrent for would-be MBA students.
A recent survey by the Graduate Management Admission Council found that nearly two out of three MBA schools nationwide – 62 percent – reported declines in applications for their full-time programs this year.
Charlotte schools say they’ve been bucking the trend: UNC Charlotte, Queens University and the uptown campus of Wake Forest University said they haven’t seen drops in their MBA programs. But in the Triangle, Duke University and UNC Chapel Hill reported declines in applications after seeing them spike immediately after the recession took hold.
The problem stems from the fact that most full-time MBA students have historically followed a well-worn path to their degree: Spend a few years in the working world before heading back to school to gain skills and a degree they expect will ultimately lead to a job upgrade. But many professionals are unwilling to leave good jobs today given the uncertain economy, said Avi Gordon, director of the MBA Admissions Studio, which counsels people on MBA applications.
“It used to be people were very confident if they left their job they would find another one,” Gordon said.
The challenging job market also is affecting part-time MBA programs. Since the recession hit, cost-conscious companies have been cutting back on helping out with some or all the tuition for employees who go back to school to further their career.
Another damper on applications to part-time programs is that people with jobs worry about the time commitment, said Denise Rotondo, dean of Meredith College’s business school.
“A lot of folks are telling us they are too busy at work,” Rotondo said.
N.C. State University’s part-time evening MBA program for working professionals has seen applications fall for four consecutive years. Applications this year were down 32 percent from 2008.
“This is of great concern to us,” said Ira Weiss, dean of the university’s Poole College of Management.
Sherry Wallace, director of MBA admissions for the full-time program at UNC Chapel Hill’s Kenan-Flagler School of Business, said applications for full-time programs have always been cyclical and based in large part on prospective students’ perceptions of their post-MBA job prospects.
“You might be up three or four years and then you’re down three or four years,” Wallace said.
Still, Kenan-Flagler and other MBA schools certainly aren’t happy about the latest down cycle.
“Would we like to have more applicants? Always,” Wallace said.
Admissions at UNC have fallen four consecutive years, including an 8.5 percent decline this year. At Duke University’s Fuqua School of Business, applications for the full-time MBA program fell 8 percent this year on top of a 2 percent decline in 2011.
Even with those declines Duke still received 3,191 applications for this fall’s class, which totals 432 students. And the recent declines at Duke come after the school set a school record with more than 3,500 applications in 2010, a 21 percent increase from the year before.
“There are absolutely more than enough ... qualified applicants,” said Liz Riley Hargrove, associate dean for admissions.
Ties to Charlotte business
UNC Charlotte and Wake Forest both attributed part of their success in maintaining enrollment to ties with Charlotte’s business community.
“We’re fortunate to be bucking the national trend showing declines, as we’ve maintained our current enrollment above 300 for the last several years despite the downturn in the economy,” said Jeremiah Nelson, director of graduate student services at UNCC.
Nelson said UNCC’s program saw an increase in applications this year. “The increase in applications didn’t inspire an increase in enrollment since the quality of the increase was not evenly distributed,” he said. “If the increase consisted of more competitive candidates we may have even grown our program a bit this year.”
Melenie Lankau, senior associate dean of MBA programs and diversity at Wake Forest, said the school’s decision to move its Charlotte campus uptown, out of SouthPark, helped spur an increase in applications and admissions this year.
“We actually did not have a great market visibility,” when the program was in the Morrocroft area, Lankau said. The school has 57 evening MBA students in Charlotte this year, up from 43 last year.
Queens, which offers two part-time MBA programs through its McColl School of Business geared toward working professionals, has been working hard to maintain enrollment numbers, said dean Ron Shiffler.
“I think expressions of interest are as strong as they’ve ever been,” he said. “I think it’s a little bit tougher to get people to pull the trigger, not only to apply but also to get them to come.”
He said the executive MBA program, which involves classes on Friday and Saturday, has seen a slight decline, while the evening MBA program remains stable.
“Usually flat isn’t good news, but right now, flat is pretty good,” he said.
Worth the cost?
MBA students have always faced a difficult decision in determining whether the skills they will obtain will be worth the cost and two-year commitment that a program requires. The country’s economic woes have only made that decision tougher, particularly because many students take on considerable debt to finance their degree.
MBA tuition at Duke is $52,900 a year. A year of tuition for out-of-state MBA students at UNC is $51,690; for in-state students, the cost is $30,408.
Jon Hendrickson, 28, was willing to give up a good job with a start-up investment management firm in Denver because he believes an MBA will help him achieve his dream job: investment portfolio manager.
He anticipates he’ll end up assuming about $50,000 in debt over the next two years to fund his ambition at UNC, where he enrolled in the MBA program this fall.
The good news for students now entering MBA programs is that the job market for graduates has been on the upswing.
The nadir for UNC grads, for example, was the class of 2009. Three months after graduation just 71 percent had received job offers, down from 87 percent the year before, said Amy Wittmayer, director of the school’s MBA Career Management Center. The average starting salaries also fell from $95,700 in 2008 to $94,200 in 2009.
But that turned out to be a one-year blip. Job offers three months out were extended to 84 percent of grads the next year; for this year’s graduating class, 88 percent received job offers by August. The average starting salaries for those grads was $101,900, up from $99,600 the year before.
“We are feeling good about the MBA recruiting environment,” Wittmayer said. Observer staff writer Ely Portillo contributed