Sunday, November 26, 2006

Admissions to Business School

Overview Business school admissions was fiercely competitive. Last year, an enormous number of students applied to a relatively stable number of first year spots; applicants had more impressive credentials; and students migrated toward e-business concentrations.

While dot-com fever struck recent college grads over the past years, many still consider an MBA criticial to business success. MBAs join dot-coms with invaluable knowledge of the business world, giving viability to the intense creativity spawned by the Internet. Companies often require execs to hold MBAs.

Below you will find further information on the top business schools of last year, competition among applicants, business school applications, financial aid, and student take on the MBA advantage.

The Schools Wharton, Harvard, Kellogg and Stanford are traditionally known as the top business schools in the country. The popularity of other schools, however, has increased due to the addition of ecommerce courses, geographical considerations and the sheer number of people who want to attend business school. Note the rise of lesser known schools in the Business Week top 25 Business Schools (listed from 1 to 25) shown below:
University of Pennsylvania (Wharton)
Northwestern (Kellogg)
University of Chicago
University of Michigan
Duke (Fuqua)
Cornell (Johnson)
Dartmouth (Tuck)
University of Virginia (Darden)
UCLA (Anderson)
NYU (Stern)
Carnegie Mellon
MIT (Sloan)
UC Berkeley (Haas)
Washington University (Olin)
University of Texas at Austin
UNC, Chapel Hill (Kenan-Flagler)
Indiana University (Kelley)
University of Maryland (Smith)
University of Wisconsin at Madison
IPurdue (Krannert)
USC (Marshall)

Admission Stats
In last year's admissions cycle, the acceptance rates of the top schools remained very low. Stanford was in the single digits, accepting only 7% of its applicants (7,047 students applied for 364 slots).**

The Ivies remained intensely competitive, with acceptance rates of 11% for Columbia and 13% for Wharton, Dartmouth and Harvard. Last year Dartmouth received 14 to 15 applications for every first-year spot. Wharton and Harvard had the greatest number of applicants--just over 8,400 for both schools.

Wharton, Dartmouth, Stern and Michigan had the largest "yield"--the number of accepted applicants who enrolled.

Kellogg, University of Chicago and Michigan had the largest full-time enrollments. (NYU's Stern school had the most overall enrollments, but over two-thirds enrolled in Stern's part-time program.)

Michigan had the largest first-year class among the public schools in the top 25.*
A dramatic 25% increase in applicants to Washington University in St. Louis demonstrates Wash U's tremendous popularity.**

E-Commerce Programs Although the most prestigious MBA programs remain some of the most competitive, more students considered lesser-known programs last year. Reasons varied from cost to location to competition, but an important trend was the e-business program reputation. Highly qualified candidates chose schools such as Vanderbilt (, Maryland and Carnegie Mellon over Harvard and Wharton because of the excellent reputation of their ecommerce programs. For instance, Vanterbilt jumped on the ecommerce bandwagon early and last year offered 19 ecommerce courses. Carnegie Mellon launched the first-ever M.S. program in ecommerce and was deluged with applications (over 3,000 for 36 slots).**

The top schools rushed to accommodate the demand for dot-com expertise. Wharton created a new ecommerce major and Stanford plans to spend a whopping $20 million for research in e-business. Most schools altered their curricula to include e-business in traditional finance, marketing and management courses.

Last year, the demand for e-business courses reeked havoc on business school campuses. Last fall, the University of Chicago had to post monitors at the door after 225 students tried to register for an e-business strategy class that only had room for 65. UC Berkeley had to call in the fire marshals for a similar stampede. At MIT, one third of MBA students enrolled in the new ecommerce track.**

Flexible Programs Business schools are becoming more flexible, understanding that irresistible opportunity might knock in the middle of an MBA program. Wharton, Harvard and Kellogg offer up to 5 years off (so you can go join a dot-com and finish your degree later). At Wharton, 25 of the 765 members of the class of 2000 did not return to finish their last year, and at Kellogg, 8 students out of 617 dropped out of the class of 2000.**** Last year, a larger number of accepted students than in years previous deferred admission, mostly taking advantage of opportunities in high-tech ventures. 20 out of the 189 students accepted into Dartmouth, class of 2001, deferred admission. Some students also switch from full time to part time status to fulfill their desire to become budding moguls.**

The Competition Last year, applicants were highly qualified, older and fiercely competitive. Even as some business schools saw declining numbers of applicants, the qualifications and credentials of accepted students magnified. Both average GPA and average GMAT* scores of applicants increased. The average GPA for the top schools hovered around 3.5, with UCLA on the high side (3.6) and Stern on the low side (3.4). The average GPA of first year MBAs at Harvard last year was 3.5.* The average GMAT* scores among US citizens rose more than five points last year, and twenty points since 1995. (See more on GMAT scores below).
The average first year business student is older than medical and law school students. The average age of the entering class at the top business schools is 27 years old, as first-years worked an average of four to five years before attending business school.* (Note that the average is slightly misleading because it consists of many 26 year olds and significantly fewer 30-, 40- and 50-year olds who skew the average upward.)

An influx of international students in American MBA programs and the increasing popularity of an MBA among Americans combined to dramatically increase the number of business school applicants throughout the 90s, although last year,numbers fell slightly. An American MBA is one of the most respected degrees in the international business world. International students accounted for more than 40% of all GMAT test-takers last year, demonstrating the trend toward more diverse, international student bodies.

As has been typical, more men than women applied to business school, with approximately 18,000 more men than women taking the GMAT* last year.*

The Application An increasing number of schools last year offered online applications, making the process more efficient and convenient for schools and applicants. MIT required you to apply online--no paper accepted.

The GMAT* Although official numbers have yet to come in, data suggests that the number of GMAT* test-takers last year increased for the first time since the 1995-1996 admissions cycle. 98% of GMAT* test-takers last year were 22 or older, and more than half of test-takers last year were over 26.

GMAT* scores have increased steadily throughout the nineties and scores at the top business schools are up significantly from 1996. How competitive are the top schools? Although, just 2 percent of all GMAT* test-takers scored a 725 on the GMAT*, that score was the 1999 average for the incoming class at Stanford Business School!*** A sample of average GMAT* scores from top business schools*:

School GMAT* Score
Schools Score
Stanford 725
Columbia 725
MIT 700
Wharton 691
Chicago 690
Harvard 690

One important piece of advice from GMAT* takers last year: remember to figure out the admissions calendar far in advance. It is easy with the computer adaptive test to put it off until it is too late to retake the exam if you do not like the score. Plan ahead! For information on registering for the GMAT*, go to: GMAT* Online .

Paying For School Business school was extremely expensive. Tuition for the top schools hung just under $30,000 per year. The Stern tuition bill topped the others last year--the school charged $29,800 for tuition. The cost of tuition at Columbia, Duke, MIT, Wharton, Chicago and Kellogg is only a hundred dollars or so less. (Do not forget to budget for room and board and personal expenses. MIT, for instance, recommends an annual budget of approximately $50,700!*)

FINANCIAL AID Last year, two thirds of MBA students required loans. Students often took out loans averaging as much as $50,000 in total.* Aid does exist. GMAC, the company that administers the GMAT, sponsors "MBA Loans". It is also important to keep up to speed on the changing federal and state regulations that affect financial aid. New tax creditsinclude the Lifetime Learning Credit which applies to tuition and fees for undergraduate, graduate, and continuing education coursework.

As the demand for MBAs increases, employers have expanded their tuition reimbursement programs. Since most MBA candidates have had a few years of work experience, it is easier to research such corporate programs.

There are billions of dollars available to support graduate study. Last year, MBA students found an incredible amount of financial assistance in a variety of places. The challenge is to identify those opportunities. Selection criteria varies for fellowships and grants-- some based on financial need, grades, test scores and/or personal characteristics. The best way to find new and old financial aid opportunities is research, research, research!

The MBA Advantage Everyone and their brother are joining dot-coms. What is an MBA worth anyway?

First of all, SALARY. We have seen dot-com mania slow down and salaries slowly drift back to earth, leaving MBAs with the big bucks. It is a hot job market, and employers fall over themselves to hire top MBAs. At UVA, 80% of students returning for their second year already had job offers. Companies increasingly offer "exploding" bonuses that are only open for a certain time--sign with us now or lose a huge bonus.** Last year, the graduating class at Stanford had a median base salary of $87,500. When you add in bonuses, starting salaries can jump an additional 40-50%. At Wharton, median total compensation for MBAs last year totaled $159,000.* These salary figures increased significantly over the past three years. A sampling of median starting salaries at some of the top schools*:

School Salary
Harvard $90,000
Stanford $87,500
Columbia $89,000
MIT $85,000
Kellog $82,000
Wharton $80,000

Where did Harvard MBAs go last year?****
Industry Percentage
Consulting 29%
High Tech 18%
banking & management 16%
Venture Capital 12%
Other financial services 2%
Health care/biotech 4%
Consumer products 3%
Entertainment/media 2%
Nonprofit 2%
Real estate 1%
Other 11%

Advice From MBAs "When applying, applicants need to "have a story" on why they need to go to a particular school. Schools aren't looking for a well-rounded person, but rather a well-rounded class. Applicants with unique experience (i.e. starting an Internet company in Poland) are more valued than those with a traditional backgrounds (i.e. banking, consulting, marketing, etc.) In the end, the "story" needs to make sense."
Becca Columbia MBA Class of 98

"The biggest challenge facing start-up dot-coms is neither finding a good idea nor raising money to fund it. It's developing a management team that is long on skill, experience and leadership. What makes the business work on a day to day basis are all the soft skills. So among writing business plans and theorizing on the nature of eCommerce, take time to learn and practice your management and leadership."
Tim Wharton MBA Class of 97 President,

"Business school was an enormous gift that exceeded my expectations. I was able to meet people from all over the world and to build a great professional network. I feel so fortunate that I went into it with enough experience to really focus on my industry and my function and I'm a better manager and problem solver as a result. My advice to others is to make a point of enjoying your experience and of learning from your professors and your classmates. It's a once in a lifetime opporuntity."
Cathleen Harvard MBA, Class of 98 President, fashion industry start up

Sources: *Business Week **US News & World Report ***Graduate School Admissions Council ****Kaplan/Newsweek How to Use the Internet to Choose of Change Careers
Summing Up That's it for this year's B-School Admissions Report. For more guidance, remember, Kaplan also offers admissions services to help you get into the business school of your choice.
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