Graduate business schools in the U.S. will face declining enrollment, particularly among international students, according to Moody’s, a credit rating service.
Moody’s cited a 2018 survey of 363 business schools worldwide and 1,087 management programs by the Graduate Management Admission Council (GMAC). More than half (59%) of U.S. business schools saw a decline in applications this year, according to the survey. Applications from domestic students dropped only slightly (1.8%), while those from international students dropped by 10.5%.
“International student enrollment is an important component for most graduate programs, comprising approximately one-fifth of total graduate enrollment in the U.S., and declining international demand will place additional negative pressure on net tuition revenue growth,” said Moody’s in a press release. “The softening of international enrollment is correlated with international student concerns around the availability of visas, as well as post-employment work prospects in the U.S.”
Lower-ranked schools will likely feel the financial squeeze for their graduate business programs, according to Moody’s.
But top-ranked business schools aren’t in the clear either, says Petia Whitmore, an EAB consultant for adult learner recruitment and a former Dean of Graduate Admissions at Babson College.
“Top-ranked programs just had a really challenging year and are likely in for another one,” says Whitmore. She points to a recent analysis from Poets&Quants that found MBA applications this past year fell at 18 out of the top 20 U.S. business schools in 2017-2018. Only two of the top 20 business schools bucked the trend.
“While top business schools may not experience decline in actual enrollments, there are serious implications from the decrease in applications,” says Whitmore.
For one, the drop in applications may hurt the United States’ reputation for top-notch MBA programs, says William Boulding, dean of Duke University’s Fuqua School. “You’ve seen growth in business schools outside the U.S., but the U.S. is losing the pipeline of talent. If we are going to maintain our reputation for having the best business schools in the world, we have to be able to attract the best and brightest in the world,” says Boulding.
Campus leaders also worry about the long-term outlook for MBA programs given this year’s drop in applicants. “The class that just started has the lowest proportion of international students we have had in quite awhile” says Madhav Rajan, dean of the University of Chicago’s Booth School of Business.
“At the end of the day we still end up with the right number of students and the metrics are all great,” says Rajan. “But you do worry where does this go next year. If the international tensions keep persisting and the visa problems get bigger that is something you have to worry about” (Fain, Inside Higher Ed, 10/9; Emma, Politico, 10/10; GMAC report, accessed 10/15; Byrne, Poets&Quants, 9/29).