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| IU Kelley School of Business, Courtesy of Indiana University |
By KEVIN HELLIKER
U.S. graduate business schools are losing their iron grip on the thriving market for international M.B.A. students.
At the 25 U.S. graduate-business programs that award the largest numbers of degrees to international students, applications for the 2011 fall semester declined 4%, according to a survey released Tuesday by the Council of Graduate Schools, based in Washington, D.C.
Although international applications to all American business schools rose by 4%, that figure paled in comparison to the 12% growth in international bids to U.S. programs offering degrees in engineering and physical and earth sciences, the survey said.
Business-school deans attribute the relatively sluggish growth to a growing number of high-quality competitors overseas.
"Schools throughout Europe, Asia and Australia have made huge investments in graduate education in general—more specifically, business school," said James Wimbush, an Indiana University dean overseeing several graduate schools, including business.
In other disciplines, international applications to U.S. graduate programs rose 9% in education, 8% in arts and humanities, 8% in life sciences, and 5% in social sciences and psychology, making business the field with the smallest increase.
The trend is evident in separate data from the Graduate Management Admission Council, which administers the GMAT, the most popular entrance exam for graduate programs in business.
GMAC sent less than 78% of its scores to U.S. schools in test-year 2010, ended last June 30, compared with 83% in test-year 2006. During that period, the total number of exams sent jumped to 779,000 from 601,000, according to the GMAC Web site.
In one indication of growing international demand for graduate degrees in business, non-U.S. citizens taking the GMAT outnumbered U.S. citizens for the first time ever in test-year 2009, and did so again in test-year 2010.
Meanwhile, in the Financial Times's most recent rankings of global MBA programs, American schools held 24 of the top 50 spots in 2011, down from 31 in 2007.
World-wide, the number of programs accepting the GMAT has grown to 5,000 from 4,181 five years ago, said Julia Tyler, an executive vice president of GMAC.
A growing percentage of test-takers from India are choosing programs in their own country, Ms. Tyler said, adding that test takers in Western Europe are choosing that region's schools, including the London Business School, which on the latest Financial Times ranking shares the top spot with the University of Pennsylvania's Wharton School.
U.S. business schools aren't the only programs encountering greater competition for overseas students. Of all international students who left their home countries to study, only 20% came to the U.S. in 2008, down from 25% in 2000, said Debra W. Stewart, president of the Council of Graduate Schools.
"As we sit here today, the U.S. graduate education is the best in the world," she said. "But the future is far from secure."
For U.S. graduate schools in all fields of study, the number of applications for fall 2011 from prospective international students rose 9%, according to the Council of Graduate Schools survey, roughly the same level of growth reported last year.
That includes spikes in applications of 18% from China, 7% from India and 2% from South Korea—the largest three countries of origin for international graduate students in the U.S., the council said.
Write to Kevin Helliker at kevin.helliker@wsj.com
Corrections & Amplifications
James Wimbush is a dean at Indiana University who oversees several graduate schools, including business. An earlier version of this article incorrectly said he was dean of the university's graduate school of business.
Read the original story in the Wall Street Journal
