Harvard Business School and other top business programs have seen a significant decline in M.B.A. applications due to the strong labor market and high cost of obtaining a degree. Applications at Harvard fell by over 15%, while other prestigious programs such as Wharton, Yale, University of Chicago, and New York University experienced drops of 10% or more. The competitive labor market and interest in shorter master’s programs were cited as reasons for the decline. Those who did apply had a higher chance of acceptance due to the smaller applicant pool. The cost of attending business school, which can exceed $200,000, was a major factor in the decreased interest. The declining applications are primarily driven by U.S.-based prospective students, as interest in business degrees remains high among international candidates. The pandemic also played a role in the decline, with many students opting to stay in the workforce rather than pursue an M.B.A. Full-time, two-year business schools in the U.S. saw a decrease in domestic student interest, while interest from international students was higher at some schools. The University of North Carolina at Chapel Hill’s Kenan-Flagler Business School was one of the few top programs to see an increase in applicants, driven by interest from India, Nigeria, and Kenya. Overall, the value of an advanced degree in today’s job market is being questioned, and alternative business credentials are becoming more popular due to their affordability and flexibility.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Steep drops in M.B.A. applications | Decrease in M.B.A. applications | Increased competition for business schools | Hot labor market and high cost of degrees |
| M.B.A. applications countercyclical | M.B.A. applications decrease during good job market | More people staying in the workforce instead of pursuing M.B.A.s | Competitive labor market and interest in shorter master’s programs |
| Cost is a major factor for declining demand | Cost is a concern for potential M.B.A. candidates | Potential decrease in M.B.A. program costs or increase in financial aid/scholarships | Wary of debt and cost of M.B.A. programs |
| Proliferation of alternative business credentials | More options besides traditional M.B.A. programs | Increase in alternative business credentials and online programs | Availability and convenience of alternative options |
| Domestic student interest fell, international interest varied | Decrease in domestic M.B.A. applicants, mixed international interest | Potential increase in international M.B.A. applicants | Varying economic conditions and global factors |