When the coronavirus crisis hit earlier this year, some business schools thought that one knock-on effect of the uncertainty and lay-offs might be a rise in the numbers of applicants hoping to begin MBA courses later this year.
In late February and early March, which coincided with the peak of this year’s business school application season, it seemed likely that people who might usually have decided against studying full-time for a one- or two-year MBA, could instead choose to ride out the recession at business school.
US schools in particular had been hoping for a rise in applications for full-time MBA courses, where demand had been declining for the past five years.
However, as the length of the disruption sinks in, the reality is that on-campus MBAs may continue to be taught remotely in the autumn. And that is not likely to attract the usual number of students paying more than $150,000 for a two-year programme in a top US school. There have already been demands from current students for refunds on their tuition fees. However, the high fixed costs of attracting teaching talent from a limited pool of academics and maintaining expensive college buildings mean schools are reluctant to do this.
“There is tremendous uncertainty out there about how business education can be delivered in the next academic year,” says Tim Mescon, executive vice-president and chief officer for Europe, the Middle East, and Africa at AACSB International, a business school accreditation agency. “Normally it would be logical to do an MBA as the economy enters recession, but these are not normal times.”
In Milan, one of the first places in Europe to be locked down, Greta Maiocchi, chief customers management officer and former head of the MBA division at MIP Politecnico di Milano, says: “The only thing we can do is give people the time to make the decision that is right for them.”
She adds that the school has “received many, many inquiries and we are offering an option of the first two months study totally online, but people are asking whether they will be able to travel to the campus after that time because they want to come here. I don’t know what is going to happen come the autumn.”
Lawrence Linker, founder of MBA Link, a Singapore-based business school admissions consultancy, specialises in helping Asian applicants to secure places in US and European institutions. His clients are benefiting from schools lowering the bar on test scores in the GMAT entrance exam and offering more generous scholarships. But even if campus life resumes, there is the possibility that ongoing travel restrictions could mean students from Asia cannot get to their schools in the US and Europe.
“I’m afraid that there will be a decrease in the number of Chinese (and Asian) students on our programmes during the next school year,” Jean-François Fiorina, vice dean at Grenoble Ecole de Management, says. “In the long term, I’m afraid of the geopolitical consequences, because we really are in a geopolitical context.”
It is now very late in the cycle of applications for programmes starting in the autumn. Some schools are currently on a third round of admissions, when typically only the final 15 per cent of applications are made. “Ninety per cent of our application volume comes from the first two rounds before this stage,” says Blair Mannix, director of admissions at The Wharton School. “There will always be spaces in the third round but it is a much smaller intake.” Ms Mannix says that “if people can’t get here we will allow them to defer their arrival. That is the only humane thing to do.”
Test centres for the GMAT entrance exam are closed and online alternatives for taking the test are only just being put in place. In response, Wharton and other admissions departments extended deadlines and offered greater flexibility on entry requirements to increase the number of applicants they can accept.
Wharton extended its MBA application deadline from April 1 to April 15 and said applicants can submit without a standardised test score. The University of Chicago Booth School of Business is giving applicants until May 31, a 59-day extension.
Still, there are reasons for optimism at hard-hit business schools. Economic downturns have previously brought robust numbers of applicants for full-time courses. as taking a career break via an MBA has always been an effective bridge to a promotion or a pivot to another career. The biggest concern for the sector is not a lack of demand but a factor beyond the control of the schools: restrictions on freedom of movement in a fragile post-corona world.
Despite the uncertainties, business school is still an attractive prospect. Sarah Catallo, 27, a creative producer at Media Grind, a boutique brand consultancy in Los Angeles, has received four offers from US schools, including the University of North Carolina’s Kenan-Flagler Business School and Georgetown University’s McDonough School of Business in Washington DC.
She had planned a two-week campus research trip, flying from California to the US east coast, but travel restrictions forced her to cancel. “I have done a tonne of research but I was relying on those visits to understand what it would be like to be on the campus and to meet students,” Ms Catallo says.
“I have been offered virtual networking events, but to be totally honest these are all so similar they tell you nothing about the place you are interested in. It feels like I am going to have to the make decision about where to go, blind.”
Her first MBA classes could be in July, depending on which school she accepts, but Ms Catallo doubts the travel restrictions will be lifted by then, meaning she would have to start term with online tuition and pay the first instalments of her fees without having set foot on the campus.
“I am feeling a lot of anxiety about what is going on,” she says. “I have been preparing to go to business school for the last two years, looking at an MBA as a way to make the transition into a corporate role helping brands focused on sustainability and corporate social responsibility goals. It has been such a long journey, taking the tests and writing application essays that I feel I cannot go back now.”