Why America’s business schools are making a comeback

Cologne Kevin Bay did not begin his MBA at the Kellogg School of Management in the classroom of his new university. Instead of sitting in Evanston, 20 kilometers north of Chicago, he was sitting in front of his laptop at home in Berlin. The start of his studies in July last year was tough for the management consultant: due to the time difference, the accounting courses for him took place from one o’clock in the morning to four in the morning. He met his fellow students via Zoom, not on campus.

As for Bay, many Germans who wanted to study abroad in the USA did not have a visa for months because of the corona restrictions. At the end of August 2020 the time had finally come: the international students were also allowed to come back and study on site.

The good news is piling up for America’s business schools: Thanks to high student vaccination rates, life has returned to campus, and the change of government at the beginning of the year also brought the long-awaited tailwind to many universities. Because in the four years in office under President Donald Trump, the students in particular ran away from the business schools.

At the end of 2018, 70 percent of business universities reported a decline in those interested in two-year full-time courses for the Master of Business Administration (MBA), the most popular and renowned business degree. International applicants in particular avoided the United States due to the Trump administration’s restrictive immigration policy.

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Since the new government lifted some of the restrictions and, for example, made entry easier for budding start-up entrepreneurs, many education providers have been hoping for a “Biden Bonus” – and a return to normalcy. But that shouldn’t happen anytime soon, at least not for everyone. Because a completely different question has long been discussed among students: How useful is an MBA at all?

The competitive pressure increases

The fact is: the mood at universities is improving, interest in MBA programs is rising again, while pandemic-related worries are disappearing. While around 44 percent of those interested in the corona pandemic were still “extremely” or “very concerned” in July 2020, the number fell to 33 percent at the end of the year, according to data from the non-profit education service provider Graduate Management Admission Council (GMAC). The vast majority (84 percent) of those surveyed are also convinced that an MBA course is helpful for a professional career. Since the change of government there has also been more planning security for foreign students, observes MBA student Bay.

However, the relaxation does not affect all providers equally. While the prestigious Ivy League universities like Stanford, Harvard or Kellogg hardly have to worry about the lecture halls of their MBA programs remaining empty, the competition for the less famous business schools is getting tougher.

The range of MBA programs outside of the United States has grown and improved over the past few years. For many applicants, the high cost of studying in the United States is also a powerful exclusion criterion. “The dollar has been very stable recently, which has made it significantly more expensive to study in the USA,” says Lars Zimmermann, academic advisor at Academic Embassy. Several US universities had discontinued their MBA programs in recent years due to lack of demand.

In addition, there are currently discussions about the content of the MBA programs. “Today, many people prefer to pursue a career in the technology sector and not work in traditional management positions,” says Markus Martinelli, a prospective MBA student at Stanford. “And basic technical knowledge is the prerequisite for this.” This, in turn, is taught in master’s courses in computer technology (MSIT), but not in the classic MBA course.

The pros and cons between MBA and MSIT are now being discussed controversially in student online forums. Martinelli says: “I can imagine that demand will eventually reach the point where MBA providers are forced to react and adapt” – that is, to include coding and technology courses in the core curriculum. This should then not only apply to programs in the USA, but worldwide.

An important reason that the United States remains the most popular study destination for MBA applicants is the attractiveness of the business location. “Many companies that interest me because they are market leaders in their industry are based in the USA”, Thilo Braun explains his decision to continue his education here. The former head of industrial management at the air taxi start-up Lilium Aviation is in his second year MBA student at Stanford. “Numerous technologies have been significantly further developed here.”

Return of the graduation ceremony

For him, there is also the academic quality: “What is offered here by the top universities is at a higher level than in Europe,” says Braun. Because of the high tuition fees, the American management schools have significantly more money at their disposal than most of their international competitors. The downside: Not everyone can afford this level, which is driving the division of the providers into a few prosperous elite universities and the starving rest – and forcing many students to go into debt or to apply for a scholarship. Braun also finances his dream of studying in the USA with a scholarship.

Student life has now returned to normal in many places, although the corona pandemic is still ongoing in large parts of the country. According to the current status, all lectures in Stanford are to take place in attendance again. Mask must be worn in closed rooms, otherwise there are not many restrictions.

Many universities have introduced compulsory vaccination with only a few exceptions. Stanford recently announced in a circular to the students that 95 percent of the employees and students who have carried out the mandatory health check have already been vaccinated. In addition, corona tests are handed out once a week, which the students have to carry out independently.

In any case, Kellogg student Bay, despite the bumpy start on his laptop at home, is grateful that he was able to study in the USA: “The class above us had to end their studies in the midst of the panic about the upcoming pandemic. We even had a graduation ceremony at the end. Outside with a stage and all the trimmings. “

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