US business schools are offering unprecedented tuition discounts of up to 50% as applications decline sharply.
The Wall Street Journal reported Wednesday that major business schools facing a crisis of falling applications are entering an unusual tuition-cutting competition to attract students.
Purdue University's Mitch Daniels School of Business is cutting tuition for its online MBA program by 40% this fall semester. For out-of-state students, tuition for the 48-credit program will drop to $36,000 from the previous $60,000.
The Paul Merage School of Business at the University of California, Irvine is also lowering tuition by up to 38% for its Flex and Executive MBA programs targeting working professionals, while expanding online and evening classes to accommodate those balancing work.
Johns Hopkins Carey Business School will provide scholarships covering half the tuition for graduates of Maryland-based universities who enroll this spring in specialized master's programs such as finance and healthcare management starting in the fall.
Behind this discount competition lies weakening demand for traditional two-year full-time MBA programs. According to the Graduate Management Admission Council (GMAC), MBA applications fell 4.9% in 2023 from the previous year, the steepest drop in the past five years.
While the market rebounded globally in 2024, the ongoing 2025-2026 admissions cycle is showing a renewed decline, particularly in full-time programs. Multiple full-time MBA admissions offices reported that applications in the current cycle have dropped 20% to 30% from a year earlier, with some institutions seeing international student applications plunge more than 40%.
MBA demand has traditionally been countercyclical, falling when the job market booms and rising during downturns. But the current employment environment is defying this pattern. Job insecurity from the spread of AI technology is not pushing workers back to school but rather strengthening a "job hugging" phenomenon, in which employees cling to their current positions.
In a February 2026 Resume Builder survey, 57% of American workers classified themselves as "job huggers," up sharply from 45% in August 2025. In the same survey, 70% of respondents said they were concerned AI would affect their jobs. Overall workforce mobility, including turnover rates, stood at 5.8% in January, the lowest level in nine years.
"In the past, many people used the MBA as a two-year career exploration period, but in today's unstable environment, leaving a job for school is no longer seen as a safe choice," said Petia Whitmore, founder of graduate admissions consultancy My MBA Path and former dean of admissions at Babson College.
The decline in international students has compounded the blow. According to the Institute of International Education (IIE), the number of new foreign students enrolling in the US in 2025 fell about 17% from the previous year, with stricter visa screening and immigration policies cited as the main factors. International graduate student enrollment for the fall semester dropped 5.9%, reversing recent growth.
To overcome the crisis, business schools are pushing short, flexible specialized master's programs to the forefront in place of long and expensive traditional degrees. Targeting young professionals worried about falling behind in the AI era, they are emphasizing that students can "gain AI expertise in a short period without interrupting their careers."
In a 2024 survey, 61% of business school deans predicted that price-competitive MBAs with strong brands would lead the market, up from 49% in 2021.
Students also agree on the need to build AI capabilities. Kristien Wong, who majored in business and computer science at Washington University in St. Louis and decided to enroll in Olin Business School's master's program in AI, said, "Whether for internships or entry-level hiring, there's no job posting that doesn't require AI-related skills in some form."
