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. Last Updated: 07/27/2016

MBA Applications Diminishing

NEW YORK -- With a swiftness that has surprised and puzzled educators, law schools have gained the advantage in their long tug of war with business schools for the attention of corporate America's future participants.

At almost every top business school, the number of applicants fell in spring, and some of the numbers are startling. At the University of Chicago, they dropped 24 percent. At Cornell University, the dip was 23 percent, and at Stanford University, it was 18 percent.

As a result, it is considerably less difficult to gain admission to some business schools than it was a few years ago, and school officials have relaxed their requirements for work experience and stepped up overseas recruiting efforts.

Law schools, meanwhile, are enjoying their first increases in applications since the 1980s. Around the country, about 77,000 people submitted applications to begin law school this fall, up about 3 percent from the previous year. It was the second consecutive increase, reversing a string of declines that accounted for a 30 percent overall drop from 1991 through 1998, according to the Law School Admission Council.

Deans say they have no clear explanation for the trend, which comes after a decade in which interest in MBA programs grew as rapidly as stock market values. Top schools became so selective that at some, admission rates plummeted to 10 percent or less. At the same time, law schools became less selective.

The labor market is causing companies to offer promotions and perquisites to retain young employees who might be considering business school.

"The opportunities presented to someone like me are pretty compelling right now," said Brian Gale, 27, an equities trader in Boston who is trying to decide between going to the University of Chicago full time and working for a bank in Cleveland that has offered to pay his tuition if he enrolls in Chicago's weekend program. "It's difficult to take a timeout for two years. People are saying, 'I'll postpone it until there's a need for me to go back.'"

In fact, graduate programs of almost all types, from the humanities to the physical sciences, have received slightly fewer applications over the last five years than in the past, according to the Council of Graduate Schools. The number of people in their late 20s has decreased, and the strong economy has given them many alternatives.

Unlike many business schools, law schools accept students directly from college, before the students have employers who may be desperate to keep them.

Law schools also seem to be benefiting both from corporate America's willingness to hire lawyers for a broader range of jobs than in the past, deans say, and from a heightened interest in public-interest work after a long economic expansion.

Nevertheless, the speed and the size of the turnaround for business and law schools defy easy explanation, school administrators say.

"Nobody I've talked to has come up with a really good reason for this, and we're all concerned," said Mary Miller, the associate dean for admissions at the Stern School of Business at New York University, where the number of applicants fell by 15 percent this year.

The flip-flop in the schools' fortunes is connected, graduate-school experts say, because both draw from the same pool: ambitious young adults who have decided against careers in specialties like medicine and engineering and opted instead for degrees that may be passports to wealth and success in just about any business field.

Last summer, the first warning signs that MBAs were losing some luster came as applications fell at schools that traditionally attract people interested in technology, like Stanford University and the Massachusetts Institute of Technology.

This year, the decline in applications is more widely spread. In fact, the list of schools where applications dropped, and acceptance rates spiked, reads like a ranking of the country's best programs: Harvard University, the University of Pennsylvania, MIT, Columbia University, Virginia, Duke. The declines are steepest among American applicants. Yale's business school may be the only major MBA program with an increase each of the last two years.

Officials at the schools themselves tend to be among those who blame the growing economy.

"Career prospects generally look so good now that a two-year investment in an MBA may be hard for many to justify," said Richard Schmalensee, the dean of the Sloan School at MIT. Indeed, the combination of tuition costs and lost wages can easily exceed $200,000 over two years.

George Parker, associate dean at Stanford, added, "There are a lot of people who feel things are moving so quickly that they don't want to stand on the sideline."