The closing of what many view as the Tippie College of Business’ flagship full-time M.B.A. program was a strategic decision to shift resources and continue building on success, Tippie Dean Sarah Gardial said on Wednesday.
Gardial held a webinar to discuss full-time M.B.A. program industry trends and explain to Tippie students and alumni the reasoning behind the UI’s decision to close its full-time M.B.A. program.
The program’s closing was part of a series of decisions that have been made over the last five years in line with the college’s strategic plan, Gardial said. Those priorities include becoming more market-centric, improving student outcomes, focusing on the college’s cores strengths, and testing the college’s ability to launch new programs with existing resources.
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Across the U.S., the number of people who have taken the Graduate Management Admission Test — a primary mechanism for admission into M.B.A. programs — has trended downward in recent years.
In 2009, there were 130,000 test takers, according to data from Graduate Management Admissions Council. By 2016, the number of test takers declined to 83,000. The trend is not mirrored worldwide, however, with about 130,000 GMAT test takers worldwide in 2016.
The shift in demand extends beyond admissions — since 2007, the Graduate Management Admissions Council data show that score sending to specialized master’s programs rather than M.B.A. programs had nearly doubled by 2016 to more than 25 percent of all GMAT scores sent.
“… We’re starting to move into a world where people are looking for more stackable degrees … where they gather credentials and bits and pieces over time, and then they start pulling those together over the life of a career,” she said.
Instead of opting for the two-year, full-time format, Gardial said, Tippie surveyed 693 undergraduate alumni who want to earn an M.B.A in January. Of that sample, only 7 percent expressed a preference for the full-time format; conversely, 82 percent were interested in online, part-time, and hybrid options.
Enrollment growth has been limited to institutions with in the top 10 of the U.S. News rankings. Meanwhile, competition has risen with schools offering an additional 313 M.B.A. programs in the U.S. than 10 years ago.
As the market dynamics for full-time M.B.A. programs have shifted, Gardial said, officials have made continual investments and improvements in the program since 2005.
Investments in the program since 2005 have included increasing admission standards and simplifying the application, expanding international student enrollment, increasing joint degree options, and increasing merit-based scholarships and GA funds, according to Gardial’s presentation.
Operating expenses excluding faculty costs have generally grown, though there is fluctuation from year to year because of changes in class size. In fiscal 2008, expenses were $2 million, and the fiscal 2017 investment was more than $3 million.
Tippie M.B.A. programs also receive support from the UI Foundation, which provides a Tippie College M.B.A. Opportunity Fund. The fund “supports all M.B.A. programs, and will continue to support M.B.A. programs after the full-time program ends,” said Dana Larson, the UI Foundation communications director, in an email to The Daily Iowan.
While continuing to dedicate resources to the program and generating a higher number of applicants over the years, Gardial said enrollment has fallen from about 240 students in 1994 to fewer than 120 in the years since 2014.
“We have an enormous amount of pride in our full-time program,” she said. “… We have continued to resource this program in all kinds of ways and there has been — even with these declining trends over the last decade — there has been no loss of commitment whatsoever to this program at the University of Iowa.”
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The college has lost money on the program for years, which Gardial said Tippie has been happy to do until recently. She said the decision was not a “cost-cutting venture.”