This is the first article in a series examining the effects of the recession on budget and admissions policies in Cornell’s graduate and professional schools.
In the current economy, college students are becoming increasingly concerned about their future job security and are considering graduate school as an academic shelter from the economy. Business schools in particular have become a safe harbor for students interested in finance who wish to weather the recession until the financial industry picks up again.
Historically, business schools have seen a rise in applications during tougher economic periods, said Joseph Thomas, academic dean of the Johnson School.
“We are somewhat countercyclical, because typically people don’t go to business school right out of undergrad. Since people can time this, when the economy is going down, they can attend business school and come out when the economy is strong again. Thus, recessions typically make our applications go up a bit,” he said.
Unlike previous recessions, however, applications are down by 14 percent this year. While there has been 10 to 15 percent rise in applications from domestic residents, there has been a 30 percent decrease in international applications. Dean Thomas attributes the rise in domestic applications to the countercyclical effect recessions have on business schools. He believes the decline in international applicants is a result of tighter credit for non-U.S. student loans, which have been halted by many financial institutions. Non-U.S. residents compose 34 percent of the class of 2009.
Randall Sawyer, director of admissions and financial aid at the Johnson School, believes that one of the biggest factors in the increase of domestic applicants is the high number of layoffs on Wall Street.
“We are seeing more students laid off now than we have seen in many years,” Sawyer said, “because they are kind of stuck — they have undergraduate experience to get the job on Wall Street but those jobs are gone.”
The admissions process at Johnson is split up into four different application rounds, with the first similar to an undergraduate Early Action application and the fourth round occurring during the end of the admissions cycle. According to released admissions data, round one enrollment yields are near 70 percent.
Over the next few years, the Johnson School is planning to increase the percentage of students enrolling directly after college. While the vast majority of Johnson School students are expected to have full-time work experience, the students currently coming directly out of an undergraduate institution will be expected to have a strong record of leadership in addition to substantial internship experience. A significant number of these students are from Cornell.
Graduating students like Matthew Connelly ’09 are viewing business school as a productive use of the next two years.
“I’d rather not gamble with a job on Wall Street,” Connelly said. “I think business school is a much better bet.”
In addition to the two-year MBA program, the Johnson School offers a Ph. D program, an Accelerated MBA and an Executive MBA. Of these programs, the Cornell Executive MBA program, which is geared for senior professionals and executives, will likely be affected most by the recession, as companies become less willing to sponsor applicants.
Not only is Funding for these programs will face cuts over the next few years as the Johnson School tries to minimize the financial costs of the recession. Sponsorships from the business school’s corporate partners are expected to decline over the next two years. Although the specific amount that will be cut has not been determined yet, Thomas expects the budgets cuts to affect a broad number of areas.
“There’ll be cuts in several areas, because you can’t save it all in pencils,” Thomas said. “The first place we’re trying to cut is administrative things, like eliminating some travel, cutting entertaining costs and some conferences.”
Thomas anticipates that education and research will be the least affected by the budget cuts. While he does not expect any of the business school’s curriculum to change, he does expect course content to reflect the lessons learned from the sub-prime crisis and for greater emphasis to be placed on risk management.
The recession has also had a substantial impact on the Johnson School’s career services division. According to Karin Ash, director of the MBA career management center, the number of recruiters for both full-time and internship candidates interviewing on campus decreased by 25 percent compared to last year. Ash, however, is hopeful that the present situation is temporary.
“I expect that recruiting on campus will continue to be affected in 2009-2010 and begin to increase in 2010-2011,” she stated in an email. “We have been through down cycles before and it usually takes two years before numbers begin to increase again.”
In order to accommodate students through the sagging job market, the Johnson School has been reaching out to alumni in an effort to expose students to their networks. So far, every student who wanted to be matched by career interest with alumni has been paired.
“The recession is affecting the internship search,” said Marques Zak, a first-year MBA student at the Johnson School. “For MBA students, the off-campus job search is going to be very important this year. But I think it’s safe to say that MBA’s still have great value.”