Grad Schools Gain as Economy Worsens

AUSTIN, Texas, Dec. 19, 2008 -- Demand for admission into graduate school business programs is breaking records because of the waning economy, according to the Graduate Management Admission Council.

In the 2008 fiscal year, 250,000 GMAT tests were taken. The previous record of 244,000 occurred in 2002.

GMAC conducts research on graduate business programs within the United States to track trends in student admissions.

"We tend to see that over the last 40 years there is a distinct correlation between the numbers of students who take the test [GMAT] and economic downturn," said GMAC spokesman Sam Silverstein.

The Law School Admission Council and the Council of Graduate Schools, which respectively track law graduate programs and general graduate programs, have not conducted any recent surveys but expect the next admissions data collection to show a similar upsurge.

Wendy Margolis, spokeswoman for LSAC, said that the organization has only a fourth of the data needed to determine whether the waning economy has affected admissions into law schools. But, she said, a 15.3 percent increase occurred in LSAT registrations in June.

"Sometimes there is a lag between news of a poor economy hitting and then people figuring out what to do since law school requires applying so far in advance," Margolis said.

But double-digit increases during tough times are nothing new. In 2001, law schools saw a 17.6 percent increase in admissions for the fall of 2002. That was a figure far from average, Margolis said.

Typically, schools see on average a 2 percent increase per admission cycle.

Staying in School

For law schools, 48 percent of the booming student population represents students between the ages of 22 and 24, illustrating a student demographic that does not hesitate between degrees.

"I'm in grad school because I wanted to avoid getting a job," first-year UCLA graduate law student Ryan Ward said. "I'm happy I don't have to enter the job market for a few more years."

But while some enter graduate schools to avoid the work force, others are hit by the economy in a different way -- they cannot afford another degree.

"I've put myself in debt by going to college, and I don't anticipate increasing my pay with my degree in a drastic way from what I already make right now," said senior Texas A&M undergraduate Ry Blaisdell.

Dropoff in Admissions

The economy has also affected international students. According to the CGS, international student admissions increased by 3 percent this fall after increasing 4 percent and 7 percent in previous years.

The dropoff can be attributed to an evaporation of financial aid, according to Wilson. Additionally, the United States once had a stronghold of the best global graduate school programs, but in recent years international competitors have arisen.

"There was $200 million set aside a year ago, but not anymore," Wilson said. "Students know that, so they go elsewhere because they can."

Many are concerned of the long-term effects on admissions that the economy will present, Wilson said.

But some universities don't see it as a time to worry. Steve Orlando, spokesman for the University of Florida, said the university welcomes graduate student enrollment, particularly on the international level.

"If you look at top-tier schools, you see they have more total enrollment in graduate programs," Orlando said. "We are happy to see our graduate student enrollment growing."

Unlike other schools, the University of Florida has seen a vast increase in international students, especially from India and China. Fall of 2007 welcomed 823 students from India, while fall of 2008 welcomed 1,086.

Some undergraduate students at Florida are also hoping to stick around and contribute to the graduate school enrollment.

Hoping for Job Boost

"You don't need to go to graduate school for what I want to do unless you teach, and I don't," senior University of Florida undergraduate Duke Carter said. "However, I do want to have a job."

Carter said that graduate school into Florida's business program is his "backup option" if he cannot find a job.

"If I don't hear something in two months, I will go back to school," Carter said. "I never thought this day would come."

Those who have lost their jobs and are using business as a backup plan didn't think so either.

Wilson said that many of the unemployed have gone back to school in hopes of attaining more skills to establish a stronger job security in the future, and that this affects graduate business programs more than any other graduate program.

Business Schools Hit

"Business schools are the most affected in the past because these are the people who lost their jobs from businesses," Wilson said. "Once we see people let go in jobs, people will go back to school because, if they are the first ones out the door, they get a nice severance package that they can use for tuition."

Universities are getting hit now if they allow spring semester entrance, said Wilson. The University of Texas graduate business program experienced a 24 percent increase in applications for spring 2009.

Some Numbers Vary

As for the other general graduate programs, admission data linked to the economy won't be available until September 2009, said CGS spokesman Stuart Haiser.

The only recent survey CGS conducted was informal and was only circulated among 50 graduate schools late last spring. The results were all over the map, Haiser said.

"There were just as many double-digit inclines as declines," Haiser said.

There was no signs that region or whether a school was public or private affected admissions, he said. It could take years for data to show repercussions of the economy, but researchers are expecting it.

"One thing about the economy that is good is that people realize the value of graduate education," Haiser said. "If you look at the economy as a whole, it evolves with producing a highly skilled work force and good economic effectiveness born out of innovation and discovery."