Across the nation, enrollment in Master of Business Association (MBA) programs continues to decline, highlighting a growing concern at even the very best business schools. Some believe it's a result of growing student debt while others say it's due to the robust job market.
Regardless of the macroeconomic factors, universities are struggling to incentivize students to apply to graduate programs. To attract more applicants to their MBA programs, some schools are pivoting, offering more degree options and areas of study that reflect unique student interests.
The Cost of Higher Education
In 2018, there was a 5.9 percent decrease in enrollment to the top 10 business schools. This reflects a change of approximately 3,400 fewer MBA applicants. This year’s outlook isn’t shaping up to be any better as applications have once again taken a deep dive.
So what’s going on?
The skyrocketing cost of higher education is a growing deterrent. Nearly 50 percent of students at leading business schools borrow $100,000 or more to finance their MBAs. That large of a financial investment could be enough to persuade young professionals stay in the boardroom and forego the classroom.
With the national unemployment rate at 3.6 percent as of October 2019, employment across most major industries continues on a healthy upward trend. For many students who may have otherwise pursued an MBA, the ease of obtaining a job with a good salary may exceed the need for more education.
Customizing the Classroom
Schools throughout the nation are searching for the formula to attract more students. Broadening course selections, reducing costs or adding specialty areas can be competitive differentiators in the MBA market.
To help with enrollment, Boston University’s Questrom School of Business has taken a similar route. The school is adding to its existing alternative MBA programs (which include a health sector and digital technology specialty) with the launch of an alternative online MBA in 2020. It will be designed to meet the needs of the “global online learner.” This MBA degree will be priced around $24,000, a stark difference to the current cost of most MBA programs.
Colorado State University College of Business is battling the enrollment decline another way. It offers students the opportunity to customize their learning based on their educational and social interests. For example, the Impact MBA focuses on global sustainability and social responsibility, two major concerns of Millennials and Generation Z.
Kellogg School of Management at Northwestern University includes technology-focused classwork in trending topics like artificial intelligence and machine learning. Other schools, like Fuqua School of Business at Duke University are offering students the chance to take data-focused courses to earn a specialty in science, technology, engineering and math (STEM). The school believes this is a way for students to break into other career areas.
The Prestige of the MBA
Obtaining an MBA degree is still a way to boost credibility and credentials. Some experts say that alone may justify the cost. Others look at the financial return of investment based on salary and lifetime earnings.
While the pursuit of an MBA is a personal choice, there’s no denying that programs should work on their evolution to remain attractive to prospective applicants. If not, schools risk losing potential graduates to a hot labor market and rising education costs.