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At Southern Methodist University's Cox School of Business, a growing number of successful MBA applicants are seeking deferrals, citing financial hardship. SMU is not alone.
After graduating from the University of Kentucky in 2009 with a bachelor’s degree in mechanical engineering, Nick Such accomplished the near-impossible: He somehow managed to get accepted into the MBA program at the Stanford Graduate School of Business, which accepts about 6 percent of applicants, a tiny fraction of whom are, like him, fresh out of college.
Two years later, as his two-year deferral was coming to an end, he did the near-incomprehensible: He told Stanford thanks, but no thanks. A fledgling entrepreneur, Such had hoped an MBA would be a good way to advance his career. But after forging his own path, he decided to defer his MBA indefinitely and backed out of the Stanford GBS Class of 2013 at the beginning of August.
“An MBA would be an incredible experience, open a lot of doors, and probably change me as a person for the better. There are a lot of lessons to be learned from that environment,” Such says. “But I came to the decision I’m way too excited about what I’m doing now.”
Such is one of a number of admitted students who are deciding now is not the right time to get an MBA.
At Southern Methodist University’s Cox School of Business, a growing number of students seeking deferrals are citing financial hardship, opting to stay employed rather than attend B-school. At Harvard Business School, the first class of a program that admits new college graduates after two years in the workforce has been hit with dozens of deferral requests from students who have decided that the opportunities they’re in now are too good to pass up. At the University of Virginia Darden School of Business, admitted students are voting with their feet. They’re not asking for deferrals, but turning the school down cold, in effect snubbing a top-ranked MBA program in favor of a steady paycheck.
In the countercyclical world of business school admissions, where applications rise during bad times and fall during good, deferrals are seen as a symptom of economic uncertainty. With the economy in turmoil and job growth stalled, and the experience of unemployed recession-era MBAs still fresh, many B-school applicants will opt for the sure thing over the risky proposition of two years of unemployment. Debra Stewart, president of the Council of Graduate Schools, hypothesizes that after watching friends and acquaintances struggle with unemployment, business school applicants are finding it difficult to give up hard-to-find jobs for two years.
“Empirically, a graduate degree pays off,” she says. “But believing that happens when everyone around you is losing their job is difficult to do.”
To see the impact of uncertainty on B-school admissions, there’s no better place than Harvard’s 2+2 Program, which is getting ready to welcome its first cohort of 106 students. Admitted in 2009, the group spent two years in the workforce before being welcomed into Harvard’s hallowed halls. When classes start on Sept. 6, only 67 students will arrive in Cambridge. The rest will remain at work. For them, business school will have to wait at least another year.
About 39 participants requested deferrals to pursue opportunities that will help them achieve personal and professional objectives, such as other degrees or continued work. To get one, 2+2 students needed to show they had a plan that made sense to delay enrollment, says Dee Leopold, managing director of MBA admissions and financial aid.
But that’s not the case at SMU Cox, where students are requesting deferrals, and getting them, based on financial hardship. This year, the school allowed 11 deferrals, up from five the year before. Of the 11, nine of the students cited a financial reason such as saving more money for school or accepting a promotion, according to Marci Armstrong, associate dean of graduate programs. She says the school doesn’t keep track of how many requests it receives, just those granted. “It’s about saving money,” she says. “That’s the reason.”
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