Kelley MBA program faces falling enrollment
School looks for numbers to improve with economy
Though a decline in enrollment in the master's of business administration program has put a financial strain on the Kelley School of Business, early signs show the tide might be turning.\n"There's been a firming in the market," said Idalene Kesner, the chairwoman of the MBA program and a professor of strategic management at the business school, who stressed this was not just a Kelley phenomenon.\n"It's happening all across the nation," she said.\nIn fact, since 2002, the number of MBA students at the Kelley School and at business schools across the country has dropped by 25 percent.\nThe traditional MBA degree is a two-year degree offered to professionals who have been working in the business field for a few years. Often, these professionals are looking for a career change or a way to boost their salary, which can be up to $30,000 more annually with an MBA under their belt.\nSeveral fundamental factors have influenced the decline, ranging from demographic and social to economic and political issues.\nOne of the biggest factors was the recession the U.S. economy hit in 2001. Even though it ended this past year, the business community is still struggling to regain the strong foothold it used to claim.\n"Prolonged recessions make people nervous about leaving their jobs," Kesner explained. More people selected career stability over the rising tuition costs and a being out of the job market for an extended period of time.\nThe recession that occurred post-Sept. 11 affected not only the economy, but also the number of international students able to join the program. While many were accepted into the program, stricter visa restrictions often meant these students would go to similar MBA programs outside the U.S., such as in Europe.\nAdditionally, there was a natural demographic change in the market, with fewer people ages 25 to 30 choosing to pursue an MBA. Three years later, Kesner thinks the demographics are beginning to turn.\n"It's hard to know how much of that is permanent and how much of that is temporary," Kesner said.\nAttendance numbers from recent admissions fairs and business forums have shown an increase in interest in the program. In addition, the national Graduate Management Admissions Test had an increase in test takers, mostly because of a higher percentage of international test takers, Kesner said.\n"A more positive sign for us is that the job market is strengthening," said Terrill Cosgray, the program director for the MBA program.\nWhen the school first experienced a drop in applications, administrators decided to reduce the number of incoming students rather than let more in to offset the loss of students.\n"We didn't compromise our quality in order to compensate for the drop in students," Kesner said. The school, which normally boasts about 260 MBA students, began grouping its incoming classes into fewer cohorts -- three identifiable groups instead of the normal four -- reducing in turn the number of classes that need to be taught.\nThis headed off any negative impacts, Cosgray said. \n"Because we recognized we were going to have reduced costs, we cut expenditures," he said.\nThere is little fear that the traditional MBA program won't be needed in the future, as companies continue to be interested in MBA graduates. \n"And they are willing to pay a premium to get them," Cosgray said.\nAnd people continue to be interested in MBA programs. MBA graduate student Philip Funk, an Evans Scholar who is taking the direct undergraduate to graduate degree titled the Systems and Accounting Graduate Program, sees how the future of an MBA degree is important. His program's enrollment has been growing steadily for seven years.\n"What people are looking for in terms of the timeline for their education is changing," he said. "The two programs aren't really competing for students."\nJunior Emily Jablon, a management and international studies double major from Toledo, Ohio, is one of the many business students who plan on continuing her education with an MBA eventually.\n"I think there will always be people who desire to have a competitive advantage," Jablon said. She plans on heading into the workforce for a few years, to "put her skill set" to work, and then return for the boost the MBA will give her brain and her salary.\nAs for Kelley's MBA traditional program, "it's very early in our application cycle," Cosgray cautioned. Applications will not start rolling in until the spring. "It's very soft right now."\n"We don't know if the market will turn around this year or the next," Kesner added. "We're certainly hoping for it"