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MBA applications fall at top US business schools

Massine Bouzerar: studying in Europe

Massine Bouzerar was determined to study for an MBA, and like many ambitious young people, the Oman-born, Canadian-educated student wanted to study in the US. He even signed up for a tour of Harvard Business Schoolduring his undergraduate degree days. “I like to plan ahead,” Mr Bouzerar says.

But after a few years in the workplace, Mr Bouzerar changed his mind, discarding applications for Stanford Graduate School of Business and Whartonin favour of courses in Europe.

“I wanted to have a global career. Canada and the US were just too similar,” he says. This month, the 26-year-old started the MBA programme at Insead’s Paris campus instead.

Mr Bouzerar is not alone in his reappraisal of US business schools. Four of the most prestigious US schools contacted by the FT reported a drop in MBA application numbers for 2018 entry — including Harvard.

Most US courses reported declining numbers of applications for 2017 entry, according to the Graduate Management Admissions Council (GMAC), administrator of the GMAT entrance exam. And this year’s data, to be published by GMAC on October 2, are expected to show a fifth successive year of declining applications for MBAs at most US business schools.

Business schools blame the decline on conditions in the US market, where a combination of fast-rising tuition fees and a lack of employers willing to fund student places has pushed candidates to target only a few elite institutions. Application numbers at the most prestigious schools were still rising, in some cases to record levels.

But this year, applications to Harvard — which has topped the FT’s global MBA ranking six times in the past 20 years — are down by 4.5 per cent on the previous year to its two-year full-time MBA course.

The picture is similar at New York University’s Stern School of Business, whose MBA programme is ranked 13th in the US by the FT. Applications for its full-time MBA programme were down nearly 4 per cent for entry in 2018. Interest from prospective students outside the US — which make up about half the total application number — is down by about 10 per cent.

The decline in US demand is down to a mix of US immigration curbs, a growing number of alternatives and cyclical movements in demand for full-time study, says Bill Boulding, dean of Duke University’s Fuqua School of Business, where applications were down 6 per cent for the class starting this month.

A perception that overseas students are unwelcome in the US — fostered by the Trump administration’s curbs on immigration — is part of the problem but not the most significant factor, according to Mr Boulding.

More damaging have been the tightening of immigration restrictions over many years, a rise in the quality of business schools in Europe and Asia and the expectation that business education should be obtainable whenever and wherever students want it in an age of online delivery, Mr Boulding says.

“We have seen some very good programmes closed down,” he adds, citing the decision by schools such as Iowa’s Tippie School of Business to shut full-time MBA courses in recent years.

“The pattern will continue, but we have to be very careful about judging why. Looked at internationally, graduate business education is a growth stock. Applications to Canadian, European and Asian schools are increasing at an enormous rate.”

At Berkeley’s Haas School of Business, applications were down 7.5 per cent for the class starting in 2018, almost entirely due to falling interest from overseas, says Peter Johnson, assistant dean for the full-time MBA programme and admissions. “I am optimistic that this is a temporary drop — but then again I am an American,” he says.

But data suggest demand for places at top US schools is unlikely to fall significantly further. For example, at Harvard an admissions rate of 11 per cent was unchanged from 2017, as was the median score of 730 by successful applicants in the GMAT entrance exam.

Nevertheless, European schools are gaining an edge for students who aspire to global careers. At Insead, no one nationality is allowed more than 10 per cent of the places.

Boston-born Amanda Moritz worked for American Express in New York and Google in San Francisco. But she had never lived outside the US until this month, when she started the MBA course at HEC Paris.

“I have only been here a week and a half but I am 100 per cent convinced I have made the right decision,” the 29-year-old says, adding that the small class size and the school’s diversity — with more than 50 nationalities represented — was why she chose HEC over Stanford or Haas.

Among her goals is to learn how people outside the US do business differently. “Silicon Valley has one of the most cut-throat business environments in the US, and I think that if I went to Stanford or Berkeley that would be the paradigm I would be taught,” Ms Moritz says.

“I am now in an older, more established place with a different work ethic and honestly I am trying to see whether this is the place I would like to live.”


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