Downturn Sparks Growth in MBA Program Applications
By Ian Shapira
Washington Post Staff Writer
Monday, November 3, 2008
Wall Street's collapse is creating divergent effects for business school students and applicants: MBA students are thankful to ride out the downturn in the sanctuary of academia, while those applying to master's degree programs in business administration are jittery about a surge in competition.
"We get to see the crisis as spectators -- at least we know we'll be here for the next 20 months," said Carlos Jovel Munguía, 30, a first-year MBA student at Georgetown University and former airline industry analyst. "Until then, we hope everything gets fixed."
James Elliott, 26, a recently laid-off investment banking analyst who is applying to business schools, said the competition is stiff. "There's never been a worse time with all these highly qualified people trying to get a limited number of spots," he said.
There may be good reason for business school students to feel fortuitously secure and applicants to feel unusually skittish. Rising numbers of young people are signing up for the GMAT admissions exam, according to the Graduate Management Admission Council. The number of GMAT tests taken worldwide has risen to more than 185,000 so far in 2008, up from about 148,000 during the comparable period in 2005, while the number of GMAT registrations has climbed to more than 223,000, up from about 173,300 three years ago.
In interviews, many aspiring business school students said they're applying because they have been laid off or worry about the potential to be let go. Others think the downturn is an ideal time to incubate other passions and retool.
Enrollment for test-preparation courses at Manhattan GMAT is up more than 50 percent in New York and Washington, chief executive Andrew Yang said. "It's hyper-competitive. We're running classes during the day because there's enough people out of work. It's good for us," Yang said. "We're flying in instructors from Atlanta and North Carolina."
Kaplan Test Prep and Admissions, owned by The Washington Post Co., also is reporting larger turnout for GMAT seminars and events.
Business school deans in the Washington area and elsewhere are expecting growth in applications for programs starting in the fall of 2009. They, too, are noticing increased attendance at business school fairs and more phone calls and campus visits. Applications at many schools have risen for several years. At Georgetown, the total rose to 1,942 so far this year, up from 1,314 in 2005. However, the number admitted declined to 569 so far in 2008, from 623 in 2005.
"There is an expectation that we will see an increase in applications," said Kelly Wilson, assistant dean and director of full-time MBA admissions at Georgetown's McDonough School of Business, which recently held a recruiting fair in New York. "In New York, we certainly did see people who came to our event who were in the financial arena, weighing their options. Frankly, the buzz is up, and prospective students are asking . . . how they should set themselves apart."
At the University of Virginia's Darden School of Business, associate admissions director Wendy Huber said she has noticed a desperation among potential applicants. "The conversations from some of them seem more dire. We're all getting the sense that this year is going to be different," she said. "One person from a banking background said, 'I know you're going to see a ton of us. How can I distinguish myself from the pool? Is it better to apply early?' "
Huber said those coming from the financial world would be wise to apply by the first- or second-round deadlines. "The beauty of the first round is that I can take a lot of consultants and bankers and lot of folks who have been in corporations," she said. "But as the deadline moves, I am fine-tuning my class."
The Said Business School at Oxford University in Britain, which draws many students from North America, reports that applicants are calling to find out whether they can squeeze in this year. "They ask, 'You guys are starting in a week -- can I join the class?' " said Christopher McKenna, the school's MBA director. "I tell them, 'We have a process for this, and we are oversubscribed for this year, anyway.' "
Jenny Cheng, 31, a financial analyst at Booz Allen Hamilton in Northern Virginia, recently attended a Manhattan GMAT session to consider enrolling in a preparation course, but she said she is so concerned about timing that she is holding off one year.
"I feel like, because of all the job layoffs, that 2010 will be a better time," Cheng said, adding that she might apply for a part-time program so she can continue working. "I've heard a lot of Booz Allen employees say the company doesn't like people doing full-time MBA programs, but they encourage part-time so they don't lose an employee."
One night at a Manhattan GMAT session, several students gathered at the testing company's Washington office on 14th Street NW to discuss their test anxieties with Yang. James Elliott, who said he is so concerned about the increased competition that he may hire a consultant to review his application, wanted to know whether the verbal and math sections are weighted equally.
"Yes, they are officially. But the truth is that statistical distribution . . . is not even in each area," Yang said. "About a third of the people that take this test are non-U.S. citizens, and they tend to be very good at math and kinda lousy at verbal. In reality, it's a lot harder to get a very high math percentile."
It was once regarded as standard for business school applicants to have a few years of job experience before being admitted. In a downturn that could last months or years, however, more and more young people are trying to obtain an MBA as soon as possible, experts said.
Many MBA students say they feel grateful that the timing of their enrollment enabled them to bypass the job carnage in the financial sector. Among them is Stefanie Snider, a first-year Georgetown business school student admitted from a waiting list.
Snider and Munguía, who are on a small academic team together, talked recently about an upcoming class visit -- dubbed "Wall Street Week" -- to investment banking and consulting firms.
"It's going to be interesting to see what they're like now. Some of them have actually canceled," said Snider, an aspiring green developer eager to visit the investment management firm Cohen & Steers.
She turned to Munguía and asked, "You were going to go to Wall Street Week, right?"
"I prefer to go places like FINCA or the World Bank," said Munguía, a native of El Salvador who wants to specialize in microfinance and return home to help his country's struggling lower and middle classes.
For those on the outside looking in, business school, with its cachet in the job market, is an enticing reprieve. But not just any reprieve will do, according to Elliott, who said his 401(k) investments lost 20 percent of their value since the market collapsed.
A lower-tier business school, he said, may not be worth the tuition. "You have to think about the cost-benefit ratio," he said.
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