The astounding boom in undergrad business education
(Poets&Quants) — Carmel Berhanu had good reason to be anxious when she submitted her application to the University of Virginia’s McIntire School of Commerce, one of the top undergraduate business programs in the country.
With applications to the school at an all-time high, she and her classmates were scrambling to gain an edge in the competitive admissions process. Her like-minded peers excluded her from study groups, were cagey about helping out with class projects, and were tight-lipped about their applications, said Berhanu, who just completed her sophomore year at the University of Virginia.
“It was really competitive, there was like a cut-throat nature to it,” added Berhanu, 20, the daughter of working-class Ethiopian immigrants, who ultimately received and accepted a coveted seat at the business school. “A lot of people had this obsessed mindset that if I don’t make it into the business school, it is the end of the world.”
Landing a spot at an undergraduate business program has become a high-stakes game for this generation of business school hopefuls. This year’s application season stands out as one of the most competitive in recent years. Applications at the top-ranked business schools were up at nearly every institution this year, in some cases in the double digits, according to deans and directors of the schools. With interest soaring, administrators are being forced to turn away qualified students they would have taken in the past, enact stricter admissions standards, and keep a close eye on student enrollment.
“I think you are seeing an explosion,” said Dale Nees, assistant dean for undergraduate studies at the University of Notre Dame’s Mendoza College of Business. Interest in business at his school has been robust, perhaps a little too robust for the university’s liking. About 35% of today’s freshman class wants to be a business major, up from about 28% five years ago. As a result, the school is implementing an enrollment cap for the first time in its history. Starting with the class of 2018, the size of the class will be around 500 students, down from 725 today, Nees said.
“It’s not that the College of Business is saying we can’t handle students. Like anything, you can always find the resources to do that,” he said. “But the question for the university is one of balance. Do we want the university to be one-third business students?”
It’s not just the top undergraduate business programs that are reporting a boom in applications. Applications jumped 14% from 2008-09 to 2012-13, according to data from 270 U.S.-based accredited undergraduate business programs collected by the Association to Advance Collegiate Schools of Business (AACSB), a B-school accreditation organization. Nearly 56% of applicants from the same group in the AACSB survey received an offer of admission in the 2008-09 academic year, a number that fell to 53% in 2012-13.
The Wharton School at the University of Pennsylvania saw a 13% uptick in applications to its undergraduate program this year, said Lori Rosenkopf, vice dean and director of Wharton’s undergraduate division. The school has seen a nearly continuous rise in its applications over the last decade, she said.
“There really is a pretty dramatic leap,” she said. “I think it represents this understanding more generally that business translates through many spheres. You are seeing interesting stories in society about people contributing, innovating, and making changes that affect peoples’ lives across the globe … and I think students are responding to that.”
At Cornell University’s Dyson School of Applied Economics and Management, the school has seen an increase in applications every year for the last six years. For three of those six years, growth was in the double digits, said Edward McLaughlin, director of the school’s undergraduate program. This year, the school accepted less than 7% of applicants, McLaughlin said.
At some schools, such application growth is worrisome, particularly at large state universities, which are already struggling with space issues and budget constraints. At the University of Texas at Austin’s McCombs School of Business, applications have gone up by nearly 25% in the last three years, said David Platt, associate dean for undergraduate programs.
“It is a challenge for us to keep up because we can’t necessarily scale our resources to match that high a number of students,” Platt said. “We wind up at times having difficult conversations about why we can’t take more students because the resources aren’t there for us to do it properly….”
The application boom means that admissions officers at undergraduate business programs can be more selective than ever before. Emory University’s Goizueta Business School graduated about 270 students six years ago, a number that climbed to 329 this year. As a consequence, the grade point average of a sophomore today is 3.6, up from 3.3 eight years ago, and SAT scores have followed a similar curve, said Andrea Hershatter, the school’s senior associate dean and director of the undergraduate business program. To even have a shot at getting in today, a student needs to become involved in student organizations and demonstrate leadership on campus, Hershatter said.
“It used to be that academics were what we were looking for, and students didn’t have to worry about anything else because they’d earned their right to come to the business school,” Hershatter said. “We’ve changed that and now put a lot of emphasis on student involvement across campus and recommendations, the typical things that go into applications to college,” she said.
The more stringent admissions standards at schools aren’t keeping students away. The appeal of an undergraduate business degree is undeniable in today’s tight job market for college graduates. Most business students graduating from top schools can be fairly confident that they’ll leave school with one or several job offers in hand, along with an attractive starting salary. The average starting salary of a business graduate today ranges from $52,900 to $62,100, according to the National Association of Colleges and Employers’ 2014 salary survey.
The seemingly practical nature of a business degree led Rupert Kingshott, 18, a recent high school graduate from Greenwich, Conn., to set his sights on attending a top 20 undergraduate business program. He’ll be attending Georgetown University’s McDonough School of Business this fall. He knows first-hand how competitive it is to get into a good business school, he said. McDonough is ranked No. 18 in Bloomberg Businessweek’s most recent ranking of undergraduate programs, and it received 3,335 applications for 540 spots, the school said.
Kingshott’s strong SAT scores, coupled with his impressive record as a rower on his high school’s crew team, helped him get into McDonough, one of his top choices, he said.
“The chances are very much stacked against you,” Kingshott said. “It is all about the edge. Pure SATs and grades are not enough. You need something extra.”