U.S. business schools are seeing a major drop in applications. According to a survey of 1,087 graduate business programs at 363 business schools by the Graduate Management Admission Council, 70 percent of two-year full-time MBA programs in the United States saw a decline in application volume this year.
Even the most prestigious institutions were not immune. According to The Wall Street Journal, Harvard Business School saw a 4.5 percent decline in applications, Stanford's Graduate School of Business saw a 4.6 percent decline, and Wharton saw a 6.7 percent decline.
At the same time, the number of applications to international business schools remained stable or increased. The GMAC survey finds that applications for business school programs are up 8.8 percent in Asia, 7.7 percent in Canada and 3.2 percent in Europe. The U.S., however, saw an overall 6.6 percent decline.
Some say that anti-immigrant policies — such as threats to reduce the number of international student visas distributed — are to blame for the apparent decline in interest in United States-based business schools. Across programs in the U.S., international applications fell by 10.5 percent, while domestic applications fell by just 1.8 percent.
"There's no doubt that immigration policy is having a negative impact on U.S. business schools," William Boulding, dean of Duke University's Fuqua School of Business, tells Poets&Quants. "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."
Applications at Fuqua fell by 6.2 percent this year.
Others credit the dip in applications to a potential decline in the value-added ratio — the bump in salary associated with earning a degree compared with the cost of tuition — of an MBA. Even though alumni from the top business schools lead some of the biggest companies in the world and earn well over six figures on average, rising tuition costs and a strong labor market may make going to business school a less-rewarding investment today than in years prior.
The idea that business school is no longer worth the cost is an opinion that business figures such as Mark Cuban and Silicon Valley angel investor Jason Calacanis have both championed.
"I am not a fan of getting MBAs at all. I am a fan of going to college, but not a fan of getting an MBA," says Cuban.
"I don't have an MBA, but I hire a lot of them and I invest in them," Calacanis tells CNBC Make It. "I do think that education has the worst value ratio." Calacanis suggests that students invest their money in starting a business instead of going back to school.
But while the cost of earning an MBA may be rising, a business degree is still linked to positive outcomes. According to The Financial Times, almost two-thirds of recent business-school graduates more than doubled their salaries in 2018 and the average salary for a recent business-school graduate is roughly $150,000.
Correction: The headline on this story has been corrected to clarify that 70 percent refers to the number of schools seeing declines in applications.
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