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Get Smart Part One: Admissions Report

Will a declining economy and the dotcom meltdown prompt a rush on the nation’s best business schools? Admissions offices nationwide are standing by, waiting to see if NASDAQ troubles will prompt a deluge of MBA applications.

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When the economy hit the skids in the late 1980s, many young professionals fled the downturn by pursuing graduate degrees. As the stock market plummeted, law and business schools saw the number of applications skyrocket.

So when sexy headline stealers like Viant, Scient Corp., and Marchfirst Inc. began slashing payrolls last December, graduate-school prep centers like Kaplan and Princeton Review weren’t surprised by an immediate increase in course registrations for the Graduate Management Admissions Test, or GMAT. Business schools, in turn, braced for a deluge of applications as candidates prepared to meet stiff competition from dotcom refugees. Today, those schools are still waiting … and wondering what happened to the MBA torrent.

“So far, our numbers are consistent with 2000 and with 1999,” says Rose Martinelli, director of MBA admissions and financial aid at the Wharton School of the University of Pennsylvania, which conducts rolling admissions that close April 10. “But last year, our overall numbers ultimately decreased. The class that enrolled in 2000 was down 11% from 1999, which was our largest applicant pool ever. It’s just too early to tell whether admissions will be terrible, terrific, or static.”

The Great Dotcom Snatch

Most business schools suffered a dramatic reduction in applications from 1998 to 2000, when stock options and management positions lured young candidates into the job market rather than the classroom. MIT’s Sloan School of Management, for example, received 10% fewer applications than usual last year, according to director of admissions Rod Garcia. On average, he says, B-schools across the United States saw interest decline 5% to 19% in 2000.

Many schools were quick to blame the hot economy for kidnapping its bright young stars. Garcia, however, resists the temptation to attribute the MBA slowdown solely to the lure of Internet-related businesses. He says that B-school applications move in cycles and that law and medical schools likely sapped the MBA talent pool more than the economy did last year.

A Dwindling Generation X

In addition, Garcia says graduate schools across the board witnessed a demographic phenomenon in 2000: There were simply fewer 25- to 35-year-olds in the talent pool than there were 10 years ago, when the tail end of the Baby Boom generation filled out classes.

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Now schools are anticipating Generation Y, the cohort born between 1979 and 1994 that totals more than 78 million people — three times larger than Gen X, according to the U.S. Census Bureau. In 2004 and 2005, the first wave of this group will begin bombarding admissions offices at the nation’s B-schools.

Early Indicators

Most B-schools are accepting applications for the class of 2003 until early spring. A final tally of applications will not be available until then, but early numbers suggest a mixed picture. Some schools are reporting flat numbers. Still others, such as MIT’s Sloan School, are seeing a slight drop in interest.

Optimistic caution holds sway over most admissions departments, which are now only one-half or two-thirds of the way through the admissions process. A handful of schools are already seeing a significant uptick. Few will divulge real numbers, and many won’t comment until the admissions cycle ends in March or April. Everyone agrees that it’s just too early to tell.

Here is a brief, informal survey of trends at several of the country’s tops schools.

MIT’s Sloan School of Management
Application numbers have fallen from last year’s.
Deadlines: December 6 and February 7

Harvard Business School
No numbers available until after the final deadline.
Deadlines: November 1, January 5, and March 2

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University of Michigan Business School
Application numbers have remained comparable to last year’s.
Deadlines: November 1, January 15, and March 1

Stanford Graduate School of Business
Application numbers have remained steady with last year’s.
Deadlines: November 1, January 4, and March 21

Darden Graduate School of Business Administration
Application numbers have increased as much as 25% since last year.
Deadlines: November 1, December 1, January 8, February 5, March 19, and April 13

The Wharton School of the University of Pennsylvania
Application numbers have remained comparable to last year’s.
Rolling admissions, final deadline: April 10

Tuck School of Business at Dartmouth
Application numbers have fallen about 10% since last year.
Deadlines: December 4, January 19, February 20, and April 16

Columbia Business School
Application numbers have increased “significantly” since last year.
Rolling admissions, final deadline: March 1 for international candidates and April 20 for domestic candidates.

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Kellogg Graduate School of Management
Application numbers have remained comparable to last year’s.
Deadlines: November 10, January 15, and March 16

Strong indicators suggest that application numbers may jump significantly — and soon. David Wilson is president of the Graduate Management Admission Council (GMAC), the organization that oversees the GMAT exam. He says that the number of test registrants and test takers is up about 8% in the past 12 months, with the greatest surge between October and December 2000. “We haven’t seen such a significant uptick in American test takers in several years,” Wilson says.

Meanwhile, Trent Anderson, vice president and publisher of Kaplan, reports a 20% increase in enrollment so far this year. And he expects that number will grow past 25% before final B-school deadlines ensue.

The Silent Stampede

The bottom line? Don’t expect a huge population shift toward B-schools in the fall of 2001. Anderson says that a significant number of Kaplan attendees are tech-sector refugees, but he insists the class of 2003 will be a diverse one.

“We’re seeing a convergence of trends,” he says. “For one, an MBA is no longer considered a specialized degree. I’ve seen divinity-school students pursue MBAs to help them manage their parishoners, football players pursue MBAs to help them make the jump to coaching, and even a woman who runs a tattoo and piercing chain attend B-school with hopes of growing her business.”

For the most part, admissions officers are not reporting a great dotcom influx. Some say, however, they do hear the distant rumble of thundering feet. Sally Jaeger, director of admissions at Dartmouth’s Tuck School of Business, expects more Silicon Valley expatriates to attend graduate school next year.

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“Going to business school is not a decision you make on a whim,” Jaeger says. “Most candidates take 12 to 18 months to make up their minds. Also, most would-be applicants are emerging from exciting startup environments that fell apart. The last thing many of them are thinking about is jumping directly into a rigorous two-year program. They need a buffer.”

Indeed, a rush for MBAs may yet come. Linda Meehan, assistant dean and executive director of admissions and financial aid at Columbia, says that recruiting events are attracting a fevered response this year. “We’ve seen significantly larger groups at our events — up anywhere from 15% to 50%, depending on the event,” she says. The percentage of women showing interest, however, has remained steady at about 25% to 30% of the applicant pool.

A Historical Perspective

“In past years, when the economy has been weak, applications have gone up,” says Ann Johnston Scott, director of graduate programs for the DuPree College of Management at Georgia Tech and vice chair of GMAC. “Right now, we’re trying to figure out whether we’re really in a recession. Candidates may be hedging their bets, pushing right up to the application deadlines.”

Kaplan’s Anderson, for one, believes the rush will come sooner rather than later. Victims of the recent firing sprees will just barely have time to take the GMAT exam, report the scores to their choice schools, and marshal recommendations and transcripts to admissions offices in time for the last round of deadlines this spring. “Given the numbers I’ve seen so far,” he says. “I wouldn’t be at all surprised to see a late flood of applicants.”

Additional reporting and writing by Linda Tischler and Anni Layne.

Part Two: Recruiting Report
Part Three: Curriculum Report