Covid-19 has caused unparalleled disruption to business school operations, shutting campuses across the world and forcing all teaching and exams to be conducted online.
Some institutions see a potential silver lining: a consequence of coronavirus might be a rise in applications for MBA programs starting in the fall. This is an especially tantalizing prospect for schools in the US, where demand has been dwindling for the past five consecutive years.
On the face of it, this is a sound theory. Business school applications are counter-cyclical. Economic slumps reduce the opportunity cost of getting an MBA, and have historically led to large increases in applicants. The degree is a proven career accelerator that often leads to a large salary increase.
However, we are in unchartered territory with Covid-19. Alex Min, chief executive of The MBA Exchange, an admissions consulting firm, expects a “great spike” in requests for tuition reductions and deferrals if students cannot come to campus in the fall. It is a real possibility that teaching will remain online.
Some MBA students are demanding refunds
Current students at several leading schools have already demanded refunds on their tuition fees. At Stanford Graduate School of Business in California, a majority of MBA students signed a petition demanding an 80 per cent fee discount for the spring semester.
The plea claims online education is a “subpar classroom experience” and the reduction reflects the cost of other online courses, which are often a fraction of the price. However, deans are reluctant to agree to the demands, citing the high fixed costs of campus buildings and staff salaries.
“The pandemic raises questions about the value of an Online MBA program and whether schools can provide the same quality of education,” says Chioma Isiadinso, founder and CEO of admissions agency Expartus. “Historically, MBA applicants have flocked to business schools to ride out a recession, but the Covid-19 situation is unprecedented.”
Brandon Kirby, director of MBA admissions at the Netherlands’ Rotterdam School of Management, says students are concerned about their ability to come to campus next year as well as the risk involved in quitting their job with a recession imminent. This could well erode the gains made in improving access to business education, including for the less well-off.
“I believe there will be a rebound in general, but will every school experience pre-Covid application levels? Probably not,” says Kirby.
Other big changes afoot
Even if campuses reopen, ongoing travel restrictions could prevent students from Asia coming to schools in the US and Europe. The education sectors in the US, the UK and Australia look exposed, due to an over-reliance on income from overseas students who typically pay higher tuition fees. Universities UK has warned of an impending £7bn drop in income for the coming academic year for the whole UK university sector.
A recent survey of 11,000 global students by education business QS suggested that around half shelved their plans to study abroad and intended to defer their applications instead. Some schools have relied on Chinese students to fill some business master’s programs, but these candidates are attracted to home-grown institutions whose quality has grown in recent years.
Schools are concerned about factors beyond their control, including restrictions on mobility after corona amid rising nationalism. The US plans to temporarily suspend immigration, an unprecedented move that could damage its reputation among overseas students.
Schools are expecting a sharp drop in numbers of international students who enrich learning with their diverse perspectives. This is due to disruption to admissions tests, delays in visa processing and the cancellation of recruitment events.
Test centers for the GMAT entrance exam are closed and an online alternative has only just gone live, but only in certain countries. Rotterdam School of Management is looking at other ways to evaluate a candidate beyond standardized tests, without lowering admissions standards. It helped the school increase applications slightly this year despite the uncertainties.
Some MBA application deadlines have been extended
Many schools are extending admissions deadlines and being more flexible in their entry requirements, to try to shore up demand. The University of Chicago Booth School of Business has given applicants a 59-day extension until May 31.
But the vast majority of people apply in earlier admissions rounds, so intakes are expected to be much smaller for the coming academic year.
Andrew Ainslie, dean of Rochester’s Simon Business School, believes it could be a buyer’s market for MBA degrees, with prospective students able to get into higher ranked schools than they perhaps originally thought. Some of them are reluctant to apply now and study online, but he says admissions may become more competitive next year if the economy worsens, as expected.
School budgets will also tighten and requests for scholarships will be scrutinized more carefully. “Prospective students are between a rock and a hard place,” says Ainslie.
Schools are relying on webinars to attract prospective students. Interviews are also being conducted online. Digitising the entire application process has helped Spain’s Esade Business School to maintain application volume so far this year, says Cristina Olabarría, recruitment and admissions director.
An MBA remains an attractive prospect for many students. HEC business school near Paris reports a current increase in applications after years of growth due to the relatively low total cost of the course and resulting high return on investment.
The more recent demand is down to the school’s ability to offer a high quality online learning experience quickly thanks to the faculty’s digital expertise.
HEC has found that learning on Zoom, a videoconferencing platform, can be even more enriching than the real thing. Teachers have greater control over group discussion, a key component of an MBA. “Given there are no longer front and back rows, we see a larger number of participants contributing, rather than having a few students monopolizing the discussion,” says associate dean Andrea Masini.
He adds: “Candidates would be much more willing to pay top dollar to institutions that have a proven record in delivering digital education.”