Monthly Archives: December 2009

The Importance of Community Service in MBA Admissions

Recently we received this question from a business school applicant:

“What if I’m not passionate about doing community service, like seemingly every other business school applicant? Does this make me a bad person?”

This is a common question — a lot of applicants think it, but not many are willing to come right out and ask it. Our answer is always the same: If you’re not passionate about something, then there’s no point in doing it, even when it comes to getting into business school!

Keep in mind that community service is one more way for you to demonstrate the four critical dimensions that admissions officers look for in every applicant: leadership, maturity, innovation, and teamwork. Demonstrate these with other activities outside of traditional community service organizations, and you’ll still be in good shape despite not having a long track record of working in a soup kitchen or volunteering to build houses on weekends.

In addition to the four dimensions, keep in mind that admissions officers always ask about every applicant, “How has this person made the community/organization around him better?” The obvious answer is with community service, but that’s not the only possibility. Identifying a potential problem at work and finding a creative solution may seem like a less obvious way to have an impact on the world around you, but in some ways this is an even more relevant example. It’s all fair game.

If you want to read what others wrote about community service in the application process, take a look at our MBA essay samples. For more news and analysis about MBA admissions, subscribe to get email updates from this blog, and follow us on Twitter!

Financial Aid Options for Business School Students

This article is adapted from the new Veritas Prep Guide to Financial Aid, a free resource for new admits or anyone else who’s thinking ahead and wondering how they’ll pay for their graduate degree.

While the most stressful part of going to business school is often the process of getting in, figuring out how to pay for it can also cause some sleepless nights! As you begin your research, consider these options that are available for funding your MBA education:

  • Scholarships – Almost always merit-based, scholarships are “free money” awards that are generally awarded with no strings attached. Some scholarships will carry a performance condition that requires a minimum academic standing, but that is somewhat rare in the graduate school arena. Scholarships are open to all students, regardless of need, and are often used both altruistically (to help students pay for school, which is often the intent of the original donor) and strategically (to woo – through incentives and flattery alike – top admitted students).
  • Fellowships – Often just another name for scholarships, fellowships are more likely to carry with them an obligation to belong to certain organizations or to pursue particular career paths. Furthermore, fellowships can often be applicable only to a narrow group of admitted students who meet specific criteria as it relates to experience, geography, or demographic information.
  • Grants – Grants are also “free money” in the sense that they do not need to be repaid; however, grants are typically awarded based on level of need, rather than on merit. A grant is truly a gift from schools to students so that individuals who otherwise cannot pay for their education through their own contributions and standard federal loans will still be afforded the same opportunities as those who can pay for it. Grants are often the most strategic point of an award package, where schools calculate the necessary award to attract a student, and sometimes negotiate with students if that’s what it takes to get them to matriculate (although they never call it “negotiating”).
  • Subsidized Loans – The federal government provides two kinds of loans to graduate students: subsidized and unsubsidized. Subsidized loans are the most preferable because the government pays the interest on the principal amount until a period
    (typically six to nine months) following the student’s graduation date. The two most common subsidized loans are:

    The Federal Stafford Loan – Up to $8,500 of the total loan (which has a maximum of $20,500) may be subsidized. Subsidized amounts are determined by unmet student need, while any student can apply for up to the full $20,500 of unsubsidized loan money. The loan carries a capped interest rate of 8.25% and a maximum repayment period of 10 years.

    The Federal Perkins Loan – Up to $6,000 per year of subsidized loan money, determined by both student need and the allotment from the Perkins loan to the school in question (some institutions receive a larger allocation than others). The Perkins loan is often used in financial aid packages for students with a very high level of unmet need (known as “exceptional need”). The loan features a 5% interest rate and must be paid back to the school in question over a maximum repayment period of 10 years.

    Subsidized loans are available to qualified students who are U.S. citizens or permanent residents.
  • Unsubsidized Loans – Unsubsidized federal loans are often confused with private loans. They are still federal loans, but unlike subsidized loans, the interest begins to accrue even while the student is in school. Payment is still delayed until after graduation, but the principal amount will already be greater than what was initially borrowed when that day comes, given the interest.
  • Private Loans – Private educational loans work the same way that any other private loan works: The student borrows money from a private lender at a fixed interest rate. The interest rate varies depending on the year and current lending climate but is often more competitive than other types of private loans. Most elite graduate schools are part of larger universities with their own lending relationships, which makes the process easier and can often lead to slightly better rates than one could get on the open market. Private loans are often used to cover any “gaps” in a financial aid award and also to cover the student’s expected contribution.

You can download the full report for free here. For more news and analysis about grad school admissions and the MBA job market,  subscribe to this blog and follow us on Twitter!

Merry Christmas from MBA Game Plan!

MBA Game Plan wants to wish you a wonderful Christmas, New Year, and holiday season overall. If you want to apply in Round 2 and are rushing to get your applications dome in the next two weeks, we offer plenty of MBA essay samples to show you what essays have worked best for other business school applicants.

To get up-to-the-minute news and analysis on the business school admissions landscape, be sure to subscribe to this blog and follow us on Twitter!

Happy Holidays, everyone!

Gen Y Sees Grad School as Plan B

A recent article on Forbes.com, describes how jobless grads are increasingly applying to graduate school as a backup option in the face of a bad job market, even though some of their possible post-school job prospects are also disappearing.

Law schools and MBA programs aren’t the only ones that have seen an influx of applicants. Even schools of journalism have seen record numbers of applications this past year, even though this is a notoriously industry for jobs (and one that keeps getting tougher). So what gives?

The answer is that these young professionals are biding their time. While their job prospects may not be especially bright when they graduate, these young grads would rather take their chances in the job market in two or three years, rather than now. Even if the job market isn’t significantly better in 2012, then at least these folks will come out of school armed with additional skills, certifications, and contacts, making their reentry into the job market a little easier (at least in theory). No matter what the job market looks like then, getting into grad school will give these young people the luxury of being able to hide out on campus and not quite yet have to face the real world. Sometimes, especially when the economy is rough, this can be grad school’s biggest appeal.

For more news and analysis about grad school admissions and the MBA job market,  subscribe to this blog and follow us on Twitter!

GMAT Volume Flat Overall in 2009

Earlier this week the Graduate Management Admission Council released its official tally for the number of GMAT exams taken in 2009, and it came out to be 267,000, narrowly surpassing last year’s record of 264,700. While it’s good to see the number continuing to rise (and GMAC’s press release goes out of its way to emphasize that the 2009 number is its highest ever), the main headline we see is that the number of tests taken grew less than 1% in 2009.

GMAT Tests Taken by Year(Note that this number represents the number of tests taken, not the the number of people who took the test. When people talk about these numbers they tend to use those two figures interchangeably, but here GMAC did not release any official data about the number of people who took the GMAT in 2009.)

Aside from the headline growth numbers, there are some interesting tidbits in the release regarding the GMAT’s increasingly international flavor:

Beyond growing larger, the GMAT testing pool is becoming more international and increasingly diverse. According to analyses of the most recent GMAT testing year, which ran from July 1, 2008 to June 30, 2009, approximately 51 percent of the people who took the GMAT during the period were non-U.S. citizens—the first time since the exam’s creation in 1954 that test takers who were citizens of nations other than the United States outnumbered Americans.

The figures show that China and India have played a particularly large role in the globalization of management education. The number of GMAT exams taken by Chinese citizens rose 35 percent in testing year 2009 compared with the year before, to 23,550; the number is up 181 percent since 2005, when it was 8,393. Tests taken by citizens of India were up 7 percent in testing year 2009, to 30,633, capping a 128 percent increase during the past five years.

The number of GMAT exams taken by women hit a record 104,880 during testing year 2009, an increase of 36 percent during the past five years and the first time female test takers have exceeded 100,000 in a single testing year. The number of GMAT test takers under 24 grew to 79,577 in 2009, a 132 percent increase from 2005.

That last fact is particularly interesting: In 2005, the number of GMAT test takers under the age of 24 must have been around 34,000. Now, it’s nearly 80,000. With top business schools like Harvard making a public push to attract younger applicants, we wonder: Which is the cause and which is the effect? No matter which factor is the driver of this growth, we expect this trend to continue in the coming years.

New GRE Test Coming in 2011

The Education Testing Service (ETS) made waves recently when it announced that it will introduce significant changes to the Graduate Record Examinations (GRE) test in 2011. With the market for grad school-related standardized testing becoming more and more competitive, and with GMAC planning a new GMAT by 2013, these changes will be interesting to watch.

Among the biggest changes to the test:

  • Test takers will be able to skip questions and come back to them later (no the computerized version of the exam; some will still be paper-based in smaller markets), and revisit answers before submitting an entire section. Test takers will love this, but it will be even more critical for them to manage their time carefully.
  • The scoring range for each section will change from 200-800 (with score increments of 10 points), to a scale of 130-170, with score increments of one point.
  • Antonyms and analogies will be removed from the verbal section , with more reading comprehension added. This certainly reflects ETS’ push to make the GRE more like the GMAT in what skills it tests.
  • The geometry section in the quantitative section will be cut down, with additional questions being added related to data analysis. This is another push to test more of the skills that the GMAT also tests.
  • Test takers will be able to use ETS-issued calculators, to shift the emphasis from how quickly someone can calculate a number to that person’s actual analytical and problem-solving abilities.
  • Time-wise, the exam will grow from 3 hours to 3 hours and 45 minutes.

If you’re unsure which test you should take, our advice remains the same: We believe that the GMAT is still the most proven measure of the skills an MBA applicant needs to succeed in the classroom. If you’re thinking about grad degrees and general and are only somewhat interested in earning an MBA, then perhaps the GRE is the better place to start. If you’re sure that a top-tier MBA is what you want, however, the GMAT is still the test for you.

For more breaking news on the evolution of the GRE and the GMAT,  subscribe to this blog and follow us on Twitter!

MBA Admissions Deferrals May Be Harder to Come By

A recent BusinessWeek story described MBA programs’ increasing reluctance to hand out admissions deferrals the current climate. In an economy where some students have a harder time securing loans and others are unable to sell their houses in order to relocate for school, this could put some newly admitted applicants in a tough spot.

Every year, a typical top school hands out dozens of deferrals. Students may ask for all sorts of reasons, and as long as they’re legitimate ones, admissions officers will usually at least consider such requests. However, with all of the uncertainty in today’s market, schools are unwilling to layer on one more level of complexity in managing a deferrals list.

Many admissions officers interviewed for the article said they plan to offer fewer deferrals this admissions season, and some even plan on scaling this number down further next year. It’s possible that some may hand out zero deferrals next year. This comes as these same schools report that the number of deferral requests are on the rise.

Interestingly, many deferral requests now come not from applicants who want to keep their options open, but who are wondering if they want to stop working and pursue an MBA at all. At the same time, knowing that their applicant pools keep becoming more and more qualified each year, many MBA programs are reluctant to grant deferrals knowing that they may have even stronger applications to choose among next year.

Is this the whole story? Probably not. We believe that yield management at least partly drives this decision as well. Yield rates for deferred admits are below 50% at some top schools. Clearly, schools see a deferral request as at least a weak signal that you may not end up matriculating, making them less likely to play along?

Ultimately, deferrals are unlikely to completely go away. If you are admitted to a great school and have a truly legitimate reason for not being able to matriculate this year, it never hurts to pick up the phone and explain your circumstances. The worst the school can say is “no,” and they may even give you a little more time to decide. They will never take away your acceptance offer, so there’s not much downside in asking. Just know that you’re not likely to get a “yes” unless you have a real reason for requesting a deferral.

For more help in applying to business school, call the admissions experts at Veritas prep at 800-925-7737 for a free initial consultation. And, be sure to follow MBA Game Plan on Twitter!