Enrollment continues declining at B-schools.

Full-time enrollment at L.A.'s 15 largest graduate business programs has fallen--as well as applications for the coming year--reflecting a larger, nationwide decline in college students and young workers pursuing MBAs.

The drop, evident in the falling numbers of applicants and a smaller pool of students taking the GMAT test, is being driven by rising tuition costs. In addition, there has been a decline in the number of international students arriving due to immigration restrictions that grew out of the threat of terrorism in the United States.

"A lot of schools took the big hit last year, and there's a drop again this year," said Carl Voigt, associate dean of MBA programs at USC's Marshall School of Business. "There's a pendulum swing."

The improving economy also has led to an increase of on-campus recruitment, so while enrollment is down, the job outlook for graduates is much better.

"In the fall, we saw about 33 percent more companies coming to our recruiting event looking for students graduating in the spring," said Linda Baldwin, dean of graduate admissions at UCLA's Anderson School of Management. "Job offers before they finish school are up."

Locally, the top 15 MBA programs together have seen full-time enrollment decline 8.3 percent from last year. At the Anderson School, applications for fall 2005 fell 14 percent, after dropping 15.8 percent in fail 2004. USC's Marshall School expects applications for full-time programs to be down about 15 percent from the 1,693 it received last year.

Schools have had to compete for the best students and broaden their part-time and executive programs, said Rachelle Katz, associate dean of admissions at Loyola Marymount's MBA program. At Loyola, up to 80 percent of MBA students remain fully employed while in school, she said.

"When you have to plunk down $50,000, you do a lot of investigating. We have to do more to convince them, especially in an area where there are a lot of schools. It's a very competitive marketplace here," Katz said.

'Big economy'

Nationwide, applications at the 30 top business schools are down 30 percent since 1998, according to Business Week. And the number of prospective applicants who took the GMAT test in March is down 18.8 percent since March 2002, according to the Graduate Management Admission Council.

Applications boomed in 2003 following the tech wreck, when many who got laid off went to school and switched careers, Voigt said. But L.A. schools have been somewhat insulated from the trend, he said. "We're not feeling the swings as dramatically as in the Midwest and South because L.A. has a big economy."

Tuition pressures aren't likely to ease. The cost of attending full-time rose 38.6 percent to $23,516 this year for a California resident, and has nearly doubled in the past two years. Plus, more MBA students coming from the ranks of working professionals and their employers are paying a smaller share of the tuition than in the past.

Next year, Loyola will raise tuition to $895 per unit from $860 this year, bringing the total for the 54-unit MBA program to about $48,000. And state budget cuts have led to a near doubling of costs at UCLA' Anderson School over the past two years.

Despite the costs, local students aren't veering off to less expensive local schools, said Linda Baldwin, dean of graduate admissions at Anderson. Rather, UCLA's enrollment is falling in large part to decreasing international applications.

"It's clear the world is flattening in terms of education," Baldwin said. "There was an economic slump in many parts of the world, and for several years the application increase was based on increasing international applications."

Abe Helou, associate dean of graduate business programs at the University of La Verne, also cites fewer international students as an explanation for lower enrollment. International students fell to 110 this year from a high point of 180 in 2002.

"The reasons behind that are obvious to everyone--the Patriot Act and non-issuance of visas, predominately for countries with (large) Muslim populations," Helou said. "I used to have about 20 students from Indonesia, now we have three. The (Persian) Gulf area, forget it, we don't have any more students from there."

At the same time, overseas business schools, particularly in European countries, have been making gains in reputation and size. Since 9/11, more have become accredited by the American Association of Credentialed Schools of Business.

Silver lining

Despite the shifts, officials at nationally ranked schools such as Anderson and Marshall maintain that pedigree still matters and translates into higher employability and starting salaries for graduates. For example, the average starting salary and bonus for an Anderson graduate was $95,500 in 2004, and Marshall graduates earned $79,200, according to U.S. News & World Report.

In addition, the opportunity to network with alumni after graduation provides an ongoing career boost. In the L.A. area, there are large numbers of corporations with local alumni.

"The network matters big-time, and it still matters," Voigt said. "It opens doors. That's why UCLA and USC get labeled as regional schools. About 70 percent of MBA students want to stay in the area."

The schools' most popular programs, such as the Lusk Center for Real Estate at USC, lead to formation of the networks.

"In real estate, it's like a Trojan mafia out there," USC's Voigt said.

Anderson is best known for its finance and management programs, which attract the highest interest among recruiters, Baldwin said.

L.A.-area deans said the pickup in corporate recruiting promises an active season for MBA job placement. According to a survey of more than 1,000 recruiters by the Graduate Management Admissions Council released last month, only 30 percent of corporate recruiters who responded said the economy was weak and would constrain hiring, compared with 69 percent in the 2001-2002 academic year.