In this episode of Business Casual, the hosts discuss the latest GMAC report. The report shows a strong 12% increase in global applications to graduate business school programs from 2023 to 2024, reversing the declines seen in the previous two years after the pandemic surge. Significant increases include a 48% rise at NYU Stern and 36% at Dartmouth Tuck, with Washington University’s Olin School doubling its applications. They explore the ongoing appeal of U.S. programs despite potential political changes and examine the broader effects of these trends on the education environment of business schools.

This discussion also highlights the growing interest in online and hybrid program applications and considers the recurring shifts in MBA popularity related to economic changes.

Episode Transcript

[00:00:04.370] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co-host, Caroline Diarte Edwards and Maria Wich-Vila. Caroline, of course, is the former managing director of admissions at INSEAD and a co founder of Fortuna Admissions. Maria is the founder of Applicant Lab. Really, the big news comes out of the Graduate Management Admission Council. Every year, they do a report card on the health, at least in terms of applications of business school market. It’s generally very, very good news. They found that total applications to graduate B-School programs worldwide increased 12% from 2023 to 2024. That’s a pretty sharp reversal from two straight years of declines that followed the pandemic-fueled boom of 2020. We know because we’ve been reporting, and in fact, in this podcast, we’ve talked about some of the schools that have been up, and the big ones were up quite a bit. NYU Stern, 48% jump in apps last year. Dartmouth Tuck up 36 %. Yale up 22 %. Duke Fuqua was up nearly 16. But the more important thing is that that was an all time application record. Washington University’s Olen School actually doubled its applications to its two year MBA program.

[00:01:35.390] – John

At Michigan Ross, they’re up more than 35 %. What’s interesting about the GMAC report, however, is most of the schools that are reporting to GMAC tend to be the second and third tier schools, and they’re experiencing an increase as well. Really, so much for all the hand wringing and all the worry about the maturity of in-person MBA programs and including two-year programs. Both two-year and one-year MBA programs are up substantially, and this is really good news. Caroline, what’s your thought about this?

[00:02:10.490] – Caroline

Yeah, it is good news. And as you say, often there is talk about the demise of the MBA and concern about whether that is a sustainable model for business schools. And it’s always a cyclical market, right? We see an upturn now. There will be downturns in the future. And if you look back over history, it has always been cyclical and somewhat countercyclical to economic circumstances in the job market. So every time there’s a downturn, there’s a prophesies of doom, but it always turns around again, right? So So it’s good to see that the things have picked up, and it’s good to see that it’s picked up across the board, because I think that some of the schools that are not in the very top tier have struggled in the past few years, much more so than the top schools. So I think the top schools, even when they have seen some decline in application volume, they still have a very loyal pipeline of strong candidates coming through. And those ups and downs on the margins don’t make a big difference to them and don’t make a difference in the quality of the class. But that’s not the case for schools that are a bit further down the pecking order.

[00:03:22.730] – Caroline

And so it’s great to see that there is demand that’s up across the board, not just for the top schools, but also for a a wider range of programs.

[00:03:31.790] – John

Yeah, and this survey takes into account nearly 300 business schools across 40 countries around the world and encompasses over 1,000 graduate management programs. So it’s a pretty broad swath of the graduate management education market. The survey also found that programs with more flexibility are in high demand with 58% of online programs and 52% of hybrid programs reporting application growth. Roughly two-thirds of online and flexible MBA programs reported growth, too. Maria, does this mean that the competition to get into business school is, again, as fierce as ever?

[00:04:10.920] – Maria

I think, yeah. I think the competition will always be fierce, even in those down years. Because even in the years where the numbers do go down, the quality of candidates is usually pretty high. There are times when, and Caroline has actually pointed this out several times, I think she saw this often in Sayyad, sometimes when there would be increases in certain application volume. Sometimes those applicants were not always of the highest quality. You can’t necessarily tell a whole lot about just merely the total number of applicants, because some of them could be people who are desperate to get in and they’re just throwing in applications. Perhaps they’ve been hurt by the economy. They lost their job. Maybe they weren’t. Sometimes people lose their jobs through no fault of their own, but sometimes they lose it because they’re not strong performers, for example. Perhaps that are losing, perhaps they’re throwing in an application to business school without necessarily being the strongest candidate in the first place. I think it’s probably safe to say that no matter when you apply during a year where applications are up or applications are down, you should prepare to I faced stiff competition either way.

[00:05:17.870] – Maria

Although, statistically speaking, obviously, the more people you’re competing against, the harder it is to get in. But I would not let that dissuade you necessarily, simply based on that metric alone. Now, if the numbers of applicants go up, And also the average GMAT score for a given school also increases dramatically. Okay, now you can say to yourself, maybe my chances are not as good now as they were in a prior year. If there are other signs of the course or the program becoming more elite or stringent or difficult to get into in some other way. But the mere number of applicants alone is not necessarily an indicator of it’s harder to get in or it’s easier to get in.

[00:05:58.530] – John

True. And I suspect that Most of our listeners are aiming toward the top, let’s say, 50 programs in the world where the selectivity rates are so low that there are plenty of really well-qualified candidates who would make terrific students and who would have great business careers who can’t get into some of these schools because the acceptance rates are so low. That’s the other issue always. Whether or not apps go up or down, the best schools and the best programs draw an exceptional group of highly competitive people, smart, talented, ambitious. So on some level, the competition never really totally goes away. Some of the other interesting parts of this GMAC study showed that the US remains among the most desired study destinations, despite our looming presidential election, which is now only days away, and the prospect of a return to power of historically unpopular Donald Trump, who we know when he was President, international applicants began to abandon the US market. GMAC also found that domestic applications drove up demand for graduate business education in the US, Asia, and Europe, except for one place, the United Kingdom, which witnessed a 45% drop in domestic applications and a 12-point dip in international applications.

[00:07:29.590] – John

I I think a lot of that is due to the rhetoric that has been coming out of the United Kingdom over visa restrictions on graduate students and their inability, in some cases, to bring their families with them to United Kingdom when they are studying for a graduate degree. The other thing going on with the United Kingdom, of course, is I think some of this is the fall out of Brexit, which has affected the United Kingdom’s economy overall. Caroline, would you agree?

[00:07:59.570] – Caroline

Sadly, Yes, it’s been quite depressing to observe, although from afar. I think there is a possibility of change now that there is a new government in the UK. Those new visa restrictions were brought in by the conservative government, and now we have a labor administration. I’m sure the schools are lobbying hard for change on this front. It doesn’t make sense to make it harder for people to come to the UK to pursue graduate studies because they are typically very talented people who can then add a lot of value to the UK economy. So it was a very short-sighted measure. And I’m sure the schools are hoping that with a new government in place, perhaps things could be turned around because, yes, it’s very sad to see those statistics of the drop in people coming to the UK.

[00:08:50.620] – John

And especially when the quality of business education in the UK is among the best in the world. I mean, you have really incredible institutions doing doing a great job with fantastic faculty and a terrific global, diverse supply of students, regardless of the application decline. And it’s sad to see that happening because you can blame the government largely and how dumb it’s been for the decline in the higher education sector in the UK, which, incidentally, is really one of the bright parts of the United Kingdom economy, their higher education market, and the vast number of quality players in it. Now, we should also point out that this is a look at application flow in the past, next year, not the current year. As everyone would imagine, there’s always a lag in statistical reporting. And after all, we’re only in really the round one era for most applications We have no idea how they’re going. And, Caroline, I might actually ask you and Maria, what you’re seeing in terms of just the number of customers you have, how many people are seeking out your services to apply to business school in the first place? Because that, to me, is like the canary in the coal mine.

[00:10:20.130] – Caroline

Yeah, I think demand is strong for this year. So I think that schools may be reporting increases or at least not a decrease from last year. And last year, they saw very strong numbers. I think it’s a good market for business schools right now, and we’ll see how that evolves. Of course, it’s very early days. I do wonder to what extent these numbers also may reflect people applying to more schools than they may have in the past. Anecdotally, I feel that from our experience, people are applying to more schools than they may have two or three years ago. And so that would, of course, increase the number of applications without actually increase the number of people applying to business schools. So I don’t know if GMAC capture the test taker data, but beyond that, I don’t know if we have data on actually the number of people behind this increase in applications.

[00:11:13.200] – John

Right. Maria, your take?

[00:11:15.220] – Maria

Yeah, I think demand is strong. I do think there is some trepidation around the US election for people from other countries applying to US programs. I have anecdotally heard some people say, Well, I’m going to wait to see what happens in November. And then if things go in a way that I think will enable me to study in the US, then I will submit a round two application. So I definitely think that that is something that’s weighing on people’s minds. But some challenges in the economy are also driving up domestic interest. And it looks like that trend actually perhaps started a year ago. As you mentioned earlier, it looks like the US programs are seeing a bigger increase. And of the increase that has occurred, it seems to be a bigger increase amongst domestic applicants versus international. So I think they’re balancing out. I think some of the domestic applicants, there’s an increase given uncertainties in the economy. And I think we will see either an increase or a flat… The election, I think, will impact international applications around, too, if I had to guess.

[00:12:16.840] – John

So let me ask you this, what do you think the results of the election are going to be?

[00:12:22.540] – Maria

What do we think they’re going to be or what are we praying with every- We know what they need to be. Lighting every candle.

[00:12:32.190] – John

We need to know what they need to be. There’s no doubt about that. The whole world is very anxious about this election, not only Americans, because it will have significant consequence for everyone. It’s often said about the American economy, We catch a cold and the world catches pneumonia. There was a recent piece in The Economist that basically said, The United States is the envy of the world in terms of its economic growth and the strength of its economy. Just to give one stat in the article, the median income of a person in Mississippi exceeds the median income of a person in the United Kingdom today. The state of Texas alone has a GDP that is higher than all of Russia. You just go on and on and on. I mean, the growth in the economy is roughly three to four times what it is elsewhere in the world, which is why so many people want to come and study here. Now, if Trump gets elected, there’ll be a lot of rhetoric, anti-immigration rhetoric, and there’ll be some moves to restrict movement in and out of the country by people who are not citizens. But overall, I think that there are really severe limits to what, in fact, he is able to do or could do.

[00:13:54.640] – John

I think the long term bet is still the US, even if, in fact, he’s elected, which we all pray that he is not. I’m sure my co-host feel the same way as I do about these results. We’ve been through a number of these before, and we’re just shocked at how close this election appears to be by the poll. I use the word appears to be because I think polls, it’s been proven, are somewhat limiting. I mean, directionally, they’re correct or have been over time, but there are always surprises. And depending on how you read the tea leaves here, we know that it’s a close election in America because there are only a few swing states that will determine the election. And We could really have a winner who wins by less than 100,000 votes because of our system of having the Electoral College actually elect the President. We have our fingers crossed. We think regardless of what happens, you can’t bet against the United States. That’s how I feel. If Trump wins, it will be a very difficult, challenging time for the economy, for higher education over the next four years, but we’re resilient and we’ll survive it.

[00:15:19.650] – John

If Harris wins, I think we’re going to have a very strong outlook for near term and long term. It would be great to see a female President in the White House. Maria, I’m sure you agree with me.

[00:15:35.490] – Maria

Yeah, absolutely. From your mouth to God’s ears, as they say.

[00:15:41.220] – John

And Caroline, even though you live in the US, I’m thinking that you’re a citizen of the United Kingdom, are you not?

[00:15:51.170] – Caroline

Well, I am. I’m also now a citizen of the US.

[00:15:54.440] – John

Oh, thank God you can vote. Although you live in California, so your vote doesn’t matter, both of you.

[00:15:59.890] – Caroline

It It doesn’t make any difference, which is very frustrating.

[00:16:03.060] – John

But I do have a lot of- You don’t need to live in Pennsylvania, Michigan, Wisconsin.

[00:16:06.850] – Maria

I know, right? Oh, gosh.

[00:16:09.350] – Caroline

I do have a lot of conversations with people who don’t understand the global context that you mentioned, John, of how strong the US is compared to other economies. Unfortunately, I think historically, the US tends to have quite a myopic perspective on the global stage. Absolutely. Yeah. And so despite the fact that the US is doing so well, people don’t acknowledge them.

[00:16:34.170] – John

Yeah, they focus on the things that you wish were better, as opposed to the things that are so good and that we should be grateful for and never assume, because the rest of the world isn’t like the United States. It just isn’t. It’s beautiful, it’s wonderful, culturally rich. The history is magnificent. People are great, but oftentimes, governments don’t match up, and their economies just don’t flourish the way the United States has flourished for so long. I’ll give my two cents. The one thing that makes America stronger, immigration. Immigrants who have come to this country for a better life and are willing to roll up their sleeves, work exceptionally hard, be ambitious, not merely for themselves, but for their children, have made America great and will remain the secret to America’s success. Any effort to stop immigration, to limit it, to diminish it, will literally be an attack on our future prosperity. For all of you international applicants out there, here’s the good news. The good news is you bet on the US, regardless of what happens in this election, because long term, that’s not necessarily a sure bet, but it’s a bet where the odds are with you.

[00:17:59.780] – John

Hey, John Byrne with Poets and Quants. Thanks for listening..