It is well known that most recessions work in favor of business schools. As industries struggle to retain their employees during a recession, laying off or letting them ago, many workers go back to school, mainly business schools, for an MBA.
They believe that earning an MBA from a reputed school is a good investment of time and money that will provide career dividends later.
And what better time than when their companies are closing down operations and they are facing the risk of lay-offs or job loss.
So, early this year, when COVID-19 started to spread worldwide, and lockdowns began to affect industries, b-schools felt that the worsening financial situation would revive the fortunes of their MBA programs – the demand for MBA places had been dropping and even the top business schools had seen declines in the number of applications for five years or more.
Schools predicted that the “COVID recession” would spur many to join full-time MBA programs to ride out the rough times.
But the nature and spread of the disease was not something that they had bargained for: it forced them to shut down their own campuses, suspend traditional classes, and take their classes online.
Far from giving a breather, COVID has worsened their situation further. New admissions have been drastically affected: MBA programs in swanky buildings with classes run by topnotch academics, which come with lofty price tags, have suddenly lost sheen in the eyes of MBAs-wannabe.
They see the plight of admitted students, who are marooned in their own countries because of international travel bans and cannot come to their campuses to start their programs.
Not just international students, many domestic students have also suspended their MBA plan with their families unable to take on any additional financial burden in a situation that is assuming the proportions of a recession.
The spread of the virus has restricted current students to a distance-education mode and already deprived them of a lion’s share of the “MBA experience” on campus.
Current students who are already half-way into their programs are demanding the refund of a part of the tuition fee since they feel denied of a full, on-campus MBA experience they looked forward to and had paid for.
At Stanford GSB, for example, 80 percent of MBA students reportedly signed a petition for a refund of the spring semester tuition.
But schools feel hardly able to accept this demand as they need to continue to pay their professors, offer top salaries to attract and retain teaching talent, and maintain quality infrastructure. [Read how much top business school professors get paid.]
All this is being watched keenly by MBA hopefuls.
But there are aspects of the crisis that actually are in favor of students who want to do an MBA. Do these aspects make this a good time to enroll for a program at a favorite school?
Here we look at why it just might be, highlighting a few advantages of applying to b-school in these troubled times.
MBA admissions, even in some reputed schools, now seem to have become a buyer’s market. Students who wish to go for an MBA are usually faced with a first big hurdle, called high tuition fees.
With the pandemic holding back a considerable number of potential applicants, a few top universities and colleges have made changes in their tuition fee structure.
Seven of them in the top 200 (QS World University Ranking 2020) have already made fee adjustments, including two in the US, one in the UK, one in Switzerland, and three in the Netherlands.
A number of lower-ranked universities in the US, Australia, Canada, Singapore, and the UK and other countries in Europe have also made changes.
Several schools have declared a freeze on tuition fees and a rollback of decisions to increase the fees, besides giving students more time to pay them, with deadline extensions.
Some schools are thinking of introducing a subscription program by which students can even out their payments and not have to pay their tuition upfront.
To try to cut costs, schools say they are considering freezing faculty wages and cutting travel budgets.
But, according to them, there are additional costs such as preparing a deliverable and quality online program, and a drastic fee cut may not be possible now.
Schools are also increasing scholarships, which will attract all students, especially price-sensitive ones. Read how this candidate got into NYU Stern with $60,000 scholarship in Round 3.
But, on the other hand, there will be more competition for scholarships, as the families of many more students are facing economic hardship than before.
Schools are also extending the deadline for receiving scholarship applications and waiving MBA application fees.
Finance companies are now ready to give more time to debtors to start repaying their student loans.
There may be more competition among students choosing to do an MBA program with a scholarship, but the total number of applicants itself may be less than before, according to a blog.
Many students who planned to join b-schools may hesitate to go ahead with their applications in view of the uncertainties that the pandemic has caused, and this may open up places in good schools.
Admission officers and deans have offered students possible ways to tide over the crisis.
One of them is to start or continue their programs online and work at it for some more time till the pandemic eases.
Another is to provide students value-added services, such as a richer array of guest speakers, a wider range of career services, and greater opportunities to interact with their peers online.
A few schools have their fingers crossed about the virus being defeated sooner rather than later, and are thinking of giving new students more time to start on-campus classes.
For new applicants, some schools have eased entry requirements and extended application deadlines to attract more applicants, while others provided virtual campus tours to persuade potential candidates.
Schools in the US, UK, Australia, and other countries and the economies of these countries will be deprived of their bread and butter if international students, including those from Asia, cannot join their MBA classes.
But there’s an advantage here, too, for new and also current students. As they remain in their own countries waiting for the pandemic to be brought under control, attending classes online, their living expenses will be greatly reduced.
Accommodation is a major expense anywhere, particularly for students who have chosen universities in big cities such as New York and London, and staying in their countries with their parents will help cut down their total cost by 30 percent to 35 percent, though this gain will come at the cost of a wholesome campus experience.
In addition to accommodation, students will save on healthcare, travel, and socializing.
But there’s a big disadvantage: exchange rates are down, and this will increase the cost of studying abroad.
A GMAC (Graduate Management Admission Council) survey found that the number of students responding with “costs may slightly or moderately” impact their decision to study abroad was 56 percent to 61 percent in the case of domestic students but 65 percent for international students.
However, despite the new challenges that students need to face to acquire an MBA degree, it may be a good idea to overcome them, as the degree has an enduring value, a GMAC official felt.
According to this official, students will, in the long term, realize they made a good decision for their futures.
The official pointed out that those who graduated from business schools during the last financial crisis would testify to the booster dose that their MBA degree gave their careers and their lives.
A Bloomberg survey of the graduating classes of 2010, 2011, and 2012 in over 125 schools worldwide reportedly found that despite their entering a post-recession job market after graduation, most found jobs.
The MBA experience not just toned up their skills and knowledge as the tangible benefits, but also increased their confidence, credibility among employers, and self-discipline, as the intangible benefits.
Nevertheless, the MBA decision should be made when you’re ready, mature, and can clearly analyze how it could help you. Read MBA worth it or not.
The marketing overdrives shouldn’t make you decide in a hurry whether you want to do an MBA and which school/program you should choose. You shouldn’t go for it just because someone said so!
If you had decided, before the pandemic, that an MBA was what you wanted from the point of view of your career and ROI, it’s probably still a good idea. Use the time to try to become a better qualified candidate.
The competition for seats in the top schools is probably going to become tougher in the next admission season after the pandemic is tackled and still-weak economies make doing MBA a wise decision for many.
The MBA degree helps in career growth and transformation into a better skilled professional, brings a better pack package, opens up networking opportunities, and nurtures entrepreneurial talent. Often, for well-armed MBAs, it just blows off the entry barriers to top positions. More here: 6 Benefits of getting an international MBA degree.
You could say that tough times don’t last, but skilled MBAs do.