Daily Management Review

US business schools are losing students


Two-year MBA courses are the most common way to obtain a master's degree in the United States. However, in 2016, their popularity is declining, says Graduate Management Admission Council (GMAC), an organization that conducts GMAT testing for ability to study in business schools.

For the first time since 2012, less than half of all world’s full-time two-year MBA courses recorded growth in number of applicants. This trend is more pronounced in the US than in other countries. Only 40% of schools there reported an increase in number of entrants (the world average 43%), 53% of schools reported decline.

US business schools hope that this is a temporary phenomenon. Demand for MBA programs typically increases during periods of high unemployment, when people realize that there’s almost nothing to lose and decide to acquire new skills.

While US business schools are experiencing difficulties in recruiting students, their European counterparts, offering to receive the same level for 12 months, enjoy influx of students.

Shorter European course usually costs less than traditional American MBA program. The price, however, is only one side of the issue. According to GMAC, only 43% of US schools, offering an MBA in a year, marked an increase in number of entrants last year.

As a whole, the world observed 57% increase in number of applicants in the best schools (MBA program for more than 120 students, have high positions in the world rankings of business education). However, only one-third of courses designed to train at least 53 students have reported an increase in number of entrants.

The first Masters degrees in Business Administration (MBA) were offered in 1908 at Harvard University. Higher education institutions, which teach business administration, are called business schools. Now, loss of popularity of MBA students made US business schools start a real hunt for students from abroad. In order to "entice" foreigners, they offer them maintenance loans. 

This policy is popular in majority of 700-plus US business schools. While this specialty is losing popularity in the United States, foreigners continue to regard it with reverence and as the best way to succeed in life.

AACSB International President Tom Robinson believes that loss of interest in specialty is obliged to too broad profile. In the 21st century, young people prefer specific professions. They believe that it would be practical to know less, but understand that chosen specialty better.

On the other hand, he is certain that business schools will still be in demand. Yes, it’s loosing popularity, but business education will always be important.

A different view is held by Roger Martin, who has 15 years of experience at the Rotman School of Business at the University of Toronto. He is more pessimistic about the situation, and believes that the number of business schools in the US will halve in 10-15 years. In his opinion, the main reason for this is just a lack of students, which does not allow to cover too high cost of training.

source: ft.com