Applications to top business school programs at top Ivy League universities saw double-digit drops this semester.
Undergrad programs are also seeing declines in enrollment, as a younger generation of high school students are rethinking the value of college, as many are beginning to question the return on investment or quality of the education.
Some have decided against a four-year degree and go directly into independent business or vocational schools.
Enrollment declines and underfunding have hit the higher education system hard, especially post-pandemic, with many smaller colleges facing financial hardship.
Meanwhile, recent cuts in state funding for higher education have pushed more of the costs onto students, leading to significant tuition increases.
The Wharton School of the University of Pennsylvania, another MBA program, recorded a more than a 13 percent plunge.
WSJ reported other top MBA programs, such as Yale University’s School of Management saw a decline of 16 percent, while the Booth business school at the University of Chicago and New York University's Stern have seen applications fall by 10 percent or more for the class of 2024.
Smaller Pool of ApplicantsThe tighter labor market and increased interest in shorter master’s programs were a motivator behind the drop, Laurel Grodman, an assistant dean for admissions at Yale told WSJ.
She admitted that the smaller pool of applicants vying for the under 350 spots in the MBA program, allowed some students to enter this year, who would have otherwise been waitlisted.
The number of business school applications historically depends on the cycle of the market.Applications were already down last year at some MBA programs as the finance and technology sector boom forced them to increase amenities to retain employees.
Employees tend to stay at work in a strong market, but applications to MBA programs tend to boom during economic downturns, as the degrees make their careers more marketable in an upswing upon graduation.MBA graduates coming from top programs tend to make more money than they borrowed within a few years of graduation.
Business school applications had last spiked at the height of the pandemic in 2020 as students attempted to wait out the economic plunge.
Enrollment Dips Among Young US Applicants
Young white-collar professionals have witnessed large pay raises this year, making the cost of going back to school less attractive, despite higher living expenditures.The average cost of attending the top American business schools is as high as $200,000 or more, over a two-year, full-time program, including living costs.
Business school recruiters are increasingly competing against other programs to attract students, as well as generous offers from companies attempting to fill major staffing shortages.The Graduate Management Admission Council, which reviews admissions numbers, told WSJ, that student applications among Americans are down for the full-time MBA programs.
The drop in enrollment was made up for by international students, but still not enough to offset the decline across the majority of business school programs.Harvard started a new scholarship program this year, that would attract more at-need applicants to the business school program, which will cover the full cost of tuition and fees for 10 percent of its student body.
About 10 percent of enrollees at Harvard said that they expected to apply for financial need-based aid to cover $76,000 a year in tuition and fees a year, according to WSJ.Many top MBA programs also offer similar need-based scholarships, while others distribute aid based on test scores, grades, and personal backgrounds.
This could lead to a surge in applications to MBA programs next year.