Applications to most of Chicago's business schools are declining, as the recession makes would-be graduate students more wary of taking on huge education debts in an uncertain job market.
Loyola University's Graduate School of Business, one of the metro area's smaller business schools, posted the biggest drop; MBA applications were down 9.5% this year, to 399 from 441 in 2010.
But Chicago's world-ranked institutions are down as well. At Northwestern University's Kellogg School of Management, 2011 applications declined 5.6%, to 4,974 from 5,270, while at the University of Chicago's Booth School of Business, applications slipped 3.0%, to 4,169 from 4,299.
Breaking from the trend, DePaul University's Kellstadt Graduate School of Business posted an increase, jumping 13%, to a record 1,895 from 1,678 in 2010. Kellstadt's application numbers now have risen for four consecutive years and are up 48.5% since 2008.
Melissa Booth, Kellstadt's director of admissions and recruiting, attributes the upsurge to chronic high unemployment. "Many students choose to come back to school for advanced business degrees once they have been laid off," she writes in an email.
DePaul is helped, too, by being less expensive than its neighbors. At $900 per credit hour, a Kellstadt MBA costs students $16,000 to $24,000 a year. Loyola charges $3,858 per course, which puts its annual pricetag at $27,000 to $35,000. Booth's annual tuition is $53,400, while Kellogg's is $54,000.
Graduate school applications tend to rise when the economy slumps, as college students defer their entry into a poor job market and laid-off workers go back to school to improve their résumés and contacts. But as the economy continues to struggle to create work—on Friday the government said the jobless rate remained at 9.1% in September—fewer people are able to afford the cost of business school or see its value.
According to research published by the Graduate Management Admission Council last month, two-thirds of two-year, full-time MBA programs received fewer applications in 2011. The council surveyed 331 business schools nationwide.
GMAC President and CEO Dave Wilson attributes the drop to economic uncertainty. “The caution in this year's survey for full-time MBA programs is unsurprising in the current economy as students weigh the financial and time commitments required to pursue a graduate business degree,” Wilson says in a statement.
Booth and Kellogg — ranked No. 1 and 4 among U.S. MBA programs in 2010, according to Bloomberg Businessweek — have plenty of company among top-tier business schools. Poets&Quants, a B-school website, reports that applications this year are down 4.7% at Harvard Business School, 5.7% at University of Pennsylvania's Wharton School and 8% at Cornell University's Johnson School of Business.
At Loyola, MBA school applications have fallen for two consecutive years, after increasing 10% in 2009. Pamela McCoy, director of Loyola's business school, says that budget-strapped employers are re-examining tuition reimbursement options, further reducing people's incentive to leave their jobs for business school.
At Kellogg, 2010's applicant pool was essentially unchanged from 2009, when applications rose 4.3%. Booth declined to provide application numbers from previous years.
Admissions personnel from Kellogg and Booth declined to comment.
Unless the economy rebounds, Eliot Ingram, co-founder of Clear Admit, a Philadelphia-based MBA admissions consultancy, predicts applications will decline moderately next year, too. "This won't be a factor for top schools, who receive enough strong applications to fill a class several times over," he says. "But it could become an issue for smaller, regional schools."
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