With the extraordinary demise of “the Big Five” investment banks in September and the turmoil in the global economy that followed, the casual observer might be forgiven for thinking that this would be a lousy time to be enrolled in a business program.
But pundits say it’s far too soon to hit the panic button.
“I don’t pretend to be an expert, but I see this as being a very temporary hiccup,” says Bernard Milano, president and trustee of the KPMG Foundation, the KPMG Disaster Relief Fund and the Ph.D. Project, which since its founding in 1994 has tripled the number of minority business professors from 294 to about 900.
“Even though you hear of 10,000 jobs lost here, 15,000 there, you are still going to need the same number of people” to tend to the nation’s finances. “Think about it: over $250 million has been poured into banks and mutual funds recently. Because of the regulatory structure, banks can leverage that 10-to-1, so that’s $2.5 billion that has to find its way somewhere. It can’t sit in a drawer or in a mattress — it has to be invested.”
Nicole Chestang agrees. She’s the chief client officer for the Graduate Management Admissions Council, sponsor of the Graduate Management Admissions Test, or GMAT. “Even in down economic times, people are looking for talent,” she says — and that talent has to be trained.
Business schools, “to their glee, are seeing that applications to full-time programs are way up for 2008. Seventy-seven percent of them report that their volumes rose, from 64 percent of schools a year ago,” Chestang explains.
In addition, 2008 is shaping up as a record year for the GMAT exam. As of Oct. 31, some 211,149 tests had been administered — a nearly 12 percent increase over the 188,856 tests administered as of October 2007. These developments come as no surprise to John Fernandes, president and CEO of the Association to Advance Collegiate Schools of Business — or AACSB International. “It’s absolutely correlated that when the economy begins to turn down, people look to returning to graduate school. So, of course, applications are affected, the GMAT exam is affected.”
