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Where have the graduate students gone?
Applications to take the GRE are down and that means the number of graduate students is unlikely to rise, in contrast to the traditional pattern of greater graduate school attendance during recessions. Here are a few hypotheses:
Stewart has several theories about why declines may be taking place this year, despite historic trends. She said it was possible, as ETS officials suggested, that the credit crunch was making it more difficult for students to borrow — or that hearing about the crunch discouraged some from trying. In that same vein, she said that with many colleges and universities announcing budget cuts, many departments may not have the same levels of funds to offer in fellowship support.
In addition, she said that while economic uncertainty in the past has prompted some people to decide to improve their skills so they can seek better jobs, the turmoil is so great this year that “no one will leave a job if they have a job — they think the risk is too much to take.”
Stewart also stressed that just because the surge in interest in graduate school has not happened this year doesn’t mean it won’t start. Many people these days are experiencing “freezing behavior” where they are so uncertain about their next move and the state of the economy that they aren’t making any changes, she noted. “It could be that this has created a temporary pause where we would have normally seen a flow to graduate school. That the flow hasn’t started doesn’t mean it won’t.”
I opt for paragraph #2. How about all of you? Are you in this position yourselves?
Posted by Tyler Cowen on December 9, 2008 at 05:58 AM in Education | Permalink
Comments
Testing...
Posted by: Tyler Cowen at Dec 9, 2008 6:53:47 AM
Great news for me. I was a little worried about increased competition.
Posted by: MRD at Dec 9, 2008 6:57:13 AM
Another reason. Hiring for international students will be dismal in a scenario like this. There are enough stories about people having to leave since no one will sponsor a visa any more, atleast for most industries.
Contrary to popular belief, career options for international students in engineering programs is not very broad. A *lot* of american companies do not hire international students any time. Most do not even interview in hard times (since visas are also hard to come by these years).
The point of an american education is harder to see if you dont have an american job at the end of it.
Posted by: ani at Dec 9, 2008 7:00:52 AM
I bet applications to take the GMAT are up.
Posted by: Jacqueline at Dec 9, 2008 7:00:59 AM
#2 sounds like me. Although I took the GMATs right out of school.
Posted by: Jay at Dec 9, 2008 7:05:04 AM
Many of my top undergraduate international students would have job offers from top Wall Street firms right now. These firms would sponsor their visa applications. With those offers out of the picture, these students are all applying to graduate school in a bid to stay in the US.
This should lead to an increase in applications and GRE test-taking, so the current environment is offsetting this effect.
Posted by: Highgamma at Dec 9, 2008 7:10:13 AM
The international students issue is relevant. The dollar has actually appreciated quite a bit very recently, which combined with deteriorating economic conditions outside the US might be a factor.
Might it not also be that the severity of the crisis has only become apparent in the last couple of months and this hasn't yet managed to filter through into application statistics. If people thought the economy would recover in Q4 as we were being told, they wouldn't have been too worried.
Posted by: Finnsense at Dec 9, 2008 7:36:49 AM
I like paragraph #2 as well, but it wouldn't explain why somebody currently in the final year of undergraduate study (and so scheduled to graduate in May 2009) wouldn't be looking more to post-graduate study than entering the workforce directly.
Are those people (or their parents) newly credit constrained?
Posted by: John Barrdear at Dec 9, 2008 7:37:14 AM
My decision had nothing to do with finances. I simply opted to work in Africa for a bit instead, and am leaving at the end of February.
Posted by: Jeff H. at Dec 9, 2008 8:07:39 AM
I bdiscovered that my skills at systems administration will take me farther than spending the next five years at grad school hammering out my political science phd.
Posted by: Andrew Wagner at Dec 9, 2008 8:19:26 AM
Anecdotally, I can say that most of my peers (and I) at a certain quasi-governmental institution are planning to send in applications for graduate school next fall; most are taking the GRE in the next few months, or have taken it recently.
Perhaps rates of application to graduate school will display quite a lot of sectoral variability.
Posted by: eigenperson at Dec 9, 2008 8:26:48 AM
Tyler,
A little off point, but maybe relevant, is high cost and use of credit. Current environment is filled with people losing lots of wealth and the ability to use credit. Some may be waiting to see what kind of subsidy programs emerge from the new administration
Question I have. I've seen the graphical representation of the costs of higher education over time, and the increases relative to other categories (even healthcare) is astounding. I went to college in the 60's and 70's at night while working full-time and supporting a family with spouse at home. I got my undergraduate degree from George Washington University and my graduate degree from Georgetown. (Not inexpensive institutions even then). What is soooo different about education today that can make the value received soooo much greater?
Posted by: GoodOleBoy at Dec 9, 2008 8:31:37 AM
A lot of people who go to graduate school do so while working and the company will pick up all or part of the tab. As companies scale back and look to cut their budgets, many are cutting their educational assistance. I think that may be a contributing factor as well.
Posted by: Tracey at Dec 9, 2008 8:33:43 AM
Personally, I'm putting off even thinking about grad school because of the immense cost it is to go. Seeing as how I can't even refi my student loans, I think I will stick with the job that I have and at least have a cash inflow.
I wish I was an EU citizen for this point in particular.
Posted by: roguelynn at Dec 9, 2008 8:38:25 AM
The article notes that GMAT demand is up.
The numbers also indicate that more than 100% of the overall decline in GRE applications can be accounted by the decline in applications from India.
So maybe the story has to do with India and PhD programs more specifically, rather than U.S. graduate school applications generally.
Posted by: a student of economics at Dec 9, 2008 8:49:12 AM
Look at increasing defaults on student loans. People are increasingly afraid to take on large debts when the future is so uncertain and the rewards are less then clear. Plus the bankruptcy laws are so severe with student loans that in the event they run into financial difficulties they have no way out from under the burden, short of suicide.
Posted by: DanC at Dec 9, 2008 8:52:04 AM
In my experience, funding is something to worry about after taking the GREs and receiving acceptance letters.
I believe negative propaganda about the intensity of graduate programs coupled with post-grad income averages is the greatest deterrent. Competition to get into grad programs has created a class of student which has endured two years of intense undergraduate work (math and econ double degrees) with exceptional grades. These students, who had wanted to to spend an additional 3 years+ at a program, are "burnt out". They possess the skills to enter the workforce now, making 70% of the expected wage after obtaining a PhD. In three years time, they have the same potential earnings as if they had a PhD, but without enduring the rigors of graduate school.
I would be happy to see a decrease in PhD program applicants, but the GRE is taken for all masters programs, most of which are unfunded. Many firms pay for continuing education, but with a decrease in jobs, maybe employers are working the remaining employees harder. In an effort to stay employed, the smart employees who generally go for a masters would postpone.
Posted by: brainwarped at Dec 9, 2008 8:52:36 AM
Look at increasing defaults on student loans. People are increasingly afraid to take on large debts when the future is so uncertain and the rewards are less then clear. Plus the bankruptcy laws are so severe with student loans that in the event they run into financial difficulties they have no way out from under the burden, short of suicide.
Posted by: DanC at Dec 9, 2008 8:53:10 AM
And I like Dan's point about money. Increased demand has increased the pricetag on a degree. Are prices too high? $150,000 for an MBA? Maybe.
Posted by: brainwarped at Dec 9, 2008 8:57:27 AM
"a student of economics" noted that GMAT demand is up. This contraindicates credit availability as a bottleneck to grad school applications. My sense is that a higher percentage of business degrees are financed with credit than are other graduate degrees (Ph.D., M.S.). I guess paragraph two it is.
Posted by: Curt Fischer at Dec 9, 2008 9:03:48 AM
As an undergraduate student about to begin the process of applying to grad schools this article is a very welcome read. I could always use less competition. On that note though, I think that is one of the reasons that applications are down for the GRE. Most international schools don't require GREs and as global rankings continue to grow in both scope and recognition, applicants may be beginning an exodus from US schools to institutions in their home country.
Posted by: Let them eat Thomas Paine at Dec 9, 2008 9:22:30 AM
http://www.gmac.com/gmac/ResearchandTrends/GMATStats/CurrentGMATVolume.htm
Not terribly hard to look up.
GMAT Testing Volume
Year-to-date GMAT volume through October 31st, 2008—211,149 worldwide—shows an 11.80% increase when compared to the number of tests taken during the same period in 2007.
The number of GMAT tests taken in the United States during the first ten months of calendar year 2008 increased 5.93% compared with testing volume during the same period in 2007. Outside the United States, testing volume increased 22.18% during the period.
- Current year-to-date worldwide volume is greater than comparable figures for each of the years studied.
- The number of GMAT tests taken in the United States during the first ten months of calendar year 2008 exceeds the number of tests taken in the United States during each of the years studied.
- GMAT tests taken inside the United States during this time period outnumber the volume of tests taken outside the United States for each of the years studied.
Notes on How GMAT Volume Is Reported
Numbers Reflect Tests, Not People
When we at GMAC report GMAT test volume, we report the number of tests taken, rather than the number of people who took the tests.
Repeat Testing
Approximately 21% of GMAT tests are taken by people who have taken the test more than once within a year. Test takers are permitted to test as many as five times within a 12-month period.
Of tests that score within the mean Total score range for the GMAT test, 500 to 540, the proportion taken by repeat test takers is approximately 28%.
Tests Taken for Nonbusiness Programs
According to GMAC research, approximately 20% of GMAT tests are taken for the purpose of submitting scores to nonbusiness graduate programs.
Posted by: James S at Dec 9, 2008 9:28:58 AM
I think there's another factor at work -- uncertainty about what advanced degrees will pay off.
In past recessions, the computer science area was a good bet. Now, not so sure. What about library science in the age of Google? What about nursing with health care costs potentially being the next bubble? And do we really need more lawyers?
I think this uncertainty keeps people frozen in place -- especially given the high costs.
Posted by: ZBicyclist at Dec 9, 2008 9:49:49 AM
There could be another explanation. Folks don't want to invest in a graduate degree because the value of a graduate degree has gone down so much its not worth the time and money. What is happening to newspapers right now is going to happen to our educational system soon. Newspapers are going out of business because the quality of news has gone down so much. If you don't want a liberal indoctrination why read the New York Times? It's the same with education. Rather then selling news or education, things to help people make informed and correct decisions in their life, the liberal media and education systems sell ideology which most people don't want, and doesn't help you make informed decisions. A college education has been overrated for a long time. People are starting to realize that.
Posted by: Jim Weaver at Dec 9, 2008 10:07:43 AM
I took a break from finishing my Master's of Economics in order to take an analyst job. I plan on quitting my job in January to finish school. Money is tight, and I hate to quit a job amidst such an economic downturn, but I figure if I finish school this semester or over the summer I'll be decently positioned when the economy heats back up next year or the year after.
Posted by: Chuck at Dec 9, 2008 10:09:48 AM
