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It's a bubble waiting to burst. Hopefully the fallout isn't as severe as the housing crisis in 2008, but student loan debt is about $1.3 trillion (2nd only to mortgage debt of $8.3 trillion). Universities jack up tuition. Students take on more debt. But in the end, someone's got to pay for it, and if young folks these days are facing anemic job prospects, you're faced with yet another (hopefully much smaller) 2008 style crisis with loan defaults.
MBA programs are just part of that wave. MBA tuition increases have been skyrocketing (they've gone up 3x in 15 years on average it seems), but wage and job growth remain flat - the post-MBA nominal salaries/comp aren't much different than 15-20 years ago, yet the cost of an MBA has gone up 3x, and the pre-MBA salaries now are much higher than 15-20 years ago (back then, most incoming MBAs were at $30-40K/yr, and even IB/PE folks had total comp of under $100K - now most folks are at $70-150K coming into b-school).
Factor in that fewer internationals are going to be interested in working/studying in the US given the current political climate and immigration issues, and you have what amounts to a potential shakeup.
This will impact top schools (but they won't go away), but more mid-tier and lower tier programs will likely shutter. Think of it like real estate: the top schools are like the old established neighborhoods, and the mid to lower tier schools as the newly developed suburbs.
Again this isn't just MBA programs, but I think you'll see some fallout with universities as a whole.
It's a real shame because whether it's b-school, med, law, etc there is value in the education. And with undergraduate education - it's one of those things where it's now so expensive to go, yet even more expensive NOT to go (shutting yourself out of so many opportunities without a college degree).
There needs to be some serious reform, like so much of our institutions and infrastructure.
I somewhat agree with this, but I think the contributing factor is how vague hiring organizations are regarding employment and the high rate of failure for graduates who enter lower tier programs, and how hiring still hasn't adapted to the 21st Century yet. The concept of campus recruiting is archaic based on the difficulties in finding qualified candidates before you can send massive documents to anyone in the world in seconds.
There are so many innovative ways to find new talent now because of online. Yet, the majority of large companies still use Taleo for online hiring. The most archaic filtering system imaginable that does more harm in finding qualified candidates than good.
They need to adapt. You don't need to physically be at a school to find the best anymore.
The consequence of these vague recruiting practices pulls people into 'top' programs to pay for access. Meanwhile, top programs are happy to accept them and charge even more for the privilege, weeding out smaller programs since the larger ones accept so many (and thus recruiters, still in their antiquated hiring methods, simply go to the larger schools for their hiring as it's a lot easier to find qualified candidates in a school with 1000+ vs 100).
There are states that are starting to see cuts in funding for education. I believe that huge state schools will see consolidation across its branches. This will result in improved for the flagship schools and will save costs moving forward.
I believe the biggest drawback will be on a social level. If schools such as state branch schools consolidate then the state flagship will become more competitive and more expensive. This will naturally serve as a barrier. Furthermore, if people don't have access to education they won't be as equipped to compete in the job market. Their consumer goods won't decrease in price. Like Best Response mentioned ,the mid-tier schools and below will be affected. As education is the social mobilizer ("great equalizer") I believe this revamp in education will result in pseudo-class structures.
The education bubble will likely be worse than the housing crisis. This is what happens when an industry rapidly expands without any controls.
I read that they're going to introduce more "innovative" specialized programs.
Many professors are paid entirely unjustified salaries for the level of difficulty in their jobs. You also have to subsidize a bunch of useless programs to be politically correct. Why the hell do you need to take 120-130 hours for a bachelor of science?
https://poetsandquants.com/2017/10/25/wisconsin-backpedals-on-plan-to-d…
They have circled the wagons! Alumni protested!
Wisc mba was great for real estate but it's Security Analysis program is essentially cfa curriculum, and didn't attract some of the bigger names in value because it lacked differentiation
There has been a decline in MBA applications for a while for these bubble programs. Many of them are situated in areas where there aren't enough working professionals to attend PT in person.
They will shift the focus to specialized masters as this allows them to get current UG's into the programs. You'll also still see mid career people doing 1 year, specialized programs.
ROI for a two year MBA at one of these lower ranked programs just isn't there. More will follow suit.
Just read the P&Q article. Comical.
What is Wisconsin's value proposition? In order to attend on campus you have to make a brutual commute or take two years off. UW isn't routinely placing people into banking. Anyone quitting a F500 job will see minimal salary increase from their MBA. Networking will be minimal as well.
Alumni are short sighted. If Wisconsin wants to keep an MBA going, set up a remote classroom in Milwaukee and Chicago and call it a day. Internationals are focusing on STEM programs or staying home. These lower ranked programs can only survive in a major metro with PT and at night offerings. Only way the ROI makes sense.
I get it. Your entire worldview seems to focus on Finance and Consulting as the only possible use for an MBA despite Wisconsin's high placement in Marketing roles.
There's a lot of desire to get an MBA from a fairly prestigious school to break into Management without breaking the bank. Wisconsin offers this in spades. In my current career path, it would take a decade or longer to get anywhere near I can accomplish through a BM track in 5 years, with a much higher probability of success in achieving my long-term goals, and not have to move around from company to company like a hot potato in order to advance.
Not everyone lands an F500 company out of Undergrad. Many dedicated and very smart people work in smaller and midsize firms, but there exists a glass ceiling to break into larger companies that an MBA helps achieve.
Just because a program doesn't have value for your needs, doesn't necessarily mean it doesn't fill a desirable niche...
This obsession over rankings and using GMAT and undergrad GPA (vs career success pre MBA) as a barometer of candidates worth is the true bubble. Its a terrible metric in evaluating whether a person would be qualified long-term to lead teams in large companies. I'm glad Wisconsin isn't as selective as Kellogg, as someone with a less desirable background but has proven themselves in work can have the same opportunity and shot at landing prime leadership roles.
You are in the minority of applicants and would probably be served better going to a PT program in a city vs. taking two years off to go to Wisconsin to see a $5-15K raise.
ROI just isn't there, hence why there programs are thinking about closing down. The proliferation of specialized masters was a way to stop the bleeding. It is a fact.
The excessive stadiums and new state of the art building that these colleges keep building along with the overpriced admin shuffling papers and getting a 10% benefit match to their outrageous six figure salary will be the cause of a the state school MBA decline. Hopefully some of the top 20 schools as well. It's a massive bubble.
We need European style public educational institutions - no BS sports teams, stadiums, no BS liberal arts degrees - just a focus on getting an education.
1.) 3 year Bachelors degrees without the American style "well rounded education". Just focus on your major (Saves money and time)- Encourage kids to take a year or two off after high school 2.) This 3 year public college shall be free/or very low cost 3.) Entry shall be restricted on the basis of HS GPA/SAT - if you don't have the mental capacity to succeed in college, get weeded out and go to trade school 4.) Free/low cost trade school for people who can't make it to college 5.) MBA = 1 year
sorry but no. i feel like you kind of missed the entire point of an education if you are just there to learn about your major. why even go to school? just make it online at that point and do it from your home...
You think people who graduate from 3/4 year focused college degrees can't succeed? I can give you a long list of people, but I think you get my point. A certain group of schools called IIT comes to mind. You can learn about other things outside of school as it has always been done, just no need to pay expensive college tuition. THAT is the reason college is so expensive in the US.
Also, I'm not advocating shutting down private colleges - they can have their 5 year degrees in Women's studies. But there needs to be free public college for poor kids. Sort of like what CUNYs were originally intended to be.
I’m so fucking pissed. I was planning on getting a Wisconsin MBA. And then a JD at Penn State
"Come for our JD and stay for our showers ;)"
Just ask SANDUSKY about it...
I predicted this a while ago.
The overall dynamics in the business world is towards harder, more analytical skills and away from more soft skills, which can be easily picked up on the job. Soft skills are important, don't get me wrong, but data analytics, tech, statistics and quant methods are becoming increasingly important (particularly in finance). As a result, coupled with the mind blowing opportunity cost of MBA programs, the degree is no longer as attractive. This is compounded by contraction in staple MBA fields (banking/consulting). Banks are shrinking the IBD divisions and, more and more, they're promoting internally.
Expect MBAs to be slowly replaced by specialized masters programs over the coming years. Super stars (those that went to top targets) don't need masters programs though.
huh? in what world are soft skills easier to pick up than the analytics to do a simple corporate or finance job? unless you are a quant you don't really need advance technical skills in corporate or finance roles...
Powerpoint presentations and knowing how to bullshit in a meeting are not skills that require 2 years off from work and a $250,000 investment. Understanding how to retrieve and analyze big data, how to create predictive models and how to quantify complex economic relationships are. You see this in evolving curriculums and in trends such as this (specialized masters opening everywhere). This is one reason why Booth is climbing in rankings and why other schools, such as Columbia with more traditional, soft curriculums, are declining.
This overall trend will continue. MBAs will become increasingly quant based/hard skill focused and 1 year specialized masters will increase in prominence.
I am surprised that there are so many mba schools and law schools that still survive to this day, charging 60-70k a year in tuition money.. Many people looking to apply to MBA schools are already making decent money, in many cases at least 70-80k a year. they give up these decent jobs and go for a top mba school, just for the shot of career switching into more lucrative / competitive industry, and for networking. Even back office jobs at banks nowadays pay at least 80-100k a year, with like 2-3 years of work experience. any semi-decent kid coming out of college can easily crack at least 80k / yr salary, few years after college, working in some back office job, commission sales, etc.
Giving up decent salaried jobs to attend any mba school outside top 20-ish, I think, makes no financial / career sense. what's the point of giving up a fine job to go back to school, if that education can't help you land a better / more challenging job in a more desired career trajectory.
I work in back office finance and make a bit over 100k a year. I am applying to mba schools because I am fed up with the endless drudgery / bitch work associated with back office job functions, which present very limited career trajectory in terms of career progression, skills, quality of experience, etc. As much as I am eager to enroll in a target MBA school and recruit for consulting / top banking jobs, there is no way I would even consider any mba school ranked outside top 20-25. Even at full ride, it just ain't worth the opportunity cost.
I could be wrong, but I suspect MBB, Deloitte, AT Kearney, or Parthenon would laugh at my resume if I was applying for a job coming out of say, Ohio State, USC, Wake Forest type of MBA program. If MBA can't get me a decent shot at even getting INTERVIEWS, much less offers, at desired post-MBA jobs, then what the hell is the point of going...
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