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Four Truths About Today's MBA
2008-11-05
Until this year, you could say with near certainty that an MBA from a well-respected business school was a ticket to a good job and a respectable salary. But with the financial crisis, a lot of those certainties are gone. Looking at the business school landscape, however, you can say at least four things with confidence. 1. You will face more competition for slots Business schools aren't increasing their class sizes to accommodate the anticipated surge in applications. This can only mean that in a year when more people are applying to business school, admissions will be more competitive and a smaller percentage of applicants will get in. The Graduate Management Admission Council (GMAC) reports a jump of more than 11% in the number of GMAT tests taken this September compared with a year earlier. And schools report an increase in interest -- both at information sessions and in online discussion forums and blogs. For those students who think they can bank on getting into a middle-tier school, think again. If getting in has become harder across the board, students will likely apply to more schools to increase their chances. With a fatter stack of applications to choose from, midtier schools could shock prospective students with rejection letters they didn't expect. One silver lining: For top students, getting into the elite business schools may not be any harder. After all, says Peter Johnson, the executive director of admissions at the full-time MBA program, "An increase in the number of applicants does not mean an increase in the quality." 2. International students are going to find loans tough International students face a new obstacle after the rigorous process of getting into a B-school has long passed. With the credit cruch, student loan programs are tightening up or disappearing entirely. For instance, this fall, Citigroup cancelled its CitiAssist loan program. That means many international students are out of luck unless they have lived in the U.S. or have a co-signer here. The cutbacks have some administrators stumped. Rosemaria Martinelli, admissions director of the , says that fixes to the problem are only short term and the school is still searching for a solution. Still, Martinelli Chicago remains committed to a diverse student body. Besides the near impossibility of getting loans, international students face difficulties after they get their degrees. In a weak market, where companies have the luxury of sifting through more applicants, international students may find it even harder to obtain scarce H1-B work visas. The end result: the continuation of a trend in which more and more students are choosing to go to business school in their home countries. 3. Quitting a job is risky People in steady, well-paying jobs have always had to weigh the benefits of quitting to attend business school. This is especially true in a down economy, when no one knows what the job market will look like in two years. Viable options now include either putting off the MBA or joining a part-time program while staying employed. According to Judith Hodara, admissions director at the , prospective students most frequently ask about opportunities for summer internships and post-graduation employment and are both "nervous" and "concerned." Traditionally, students who quit jobs at the start of a recession graduate with an MBA when the economy is in an upswing. But no one is able to predict with certainty how long this recession will last. Erin Nickelsburg, admissions director at the University of Wisconsin-Madison's School of Business, said that predictors of the "opportunity cost" of going to business school in a downturn have been skewed by the apparent end of big salaries and juicy bonuses in investment banking. Still, Nickelsburg warns that opportunities could be missed, as well. "Not making an investment in yourself can turn around and haunt you when the economy goes back up," she said. 4. The learning is still valuable While the return on investment on an MBA is still up in the air, no one is disputing that what you learn in business school will be extremely valuable as the economy recovers. Case studies have new meaning, now that executives face tougher decisions and large-scale business problems. According to Chicago's Martinelli, now is a "cool time to study this, learn from this position, and figure out how you can add value" -- meaning it's a great time to be able to learn about not just hypothetical but real issues. Still, students may need to adjust their career goals and possibly their salary expectations. "This is a good time to park yourself in an MBA program and build up your portfolio of intellectual capital," says David Wilson, GMAC's president. "Graduates will emerge in two years or so and be in a different market."
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