Not even an MBA can save Gen Z and they know it—now U.S. business school applications have plunged 25% as job prospects dim

Gen Z is facing a challenging job market shaped by artificial intelligence, leading to a 25% drop in U.S. business school applications in 2026, the largest decline in nearly a decade, according to the Graduate Management Admission Council. The decline in applications follows two years of growth in the previous period. Factors contributing to this decline include economic uncertainty, shifting visa policies, and geopolitical tensions.

However, the economy stands out as the primary factor, with 90% of surveyed business programs reporting that economic changes, such as recession fears, layoffs, and shifts in the job market, affected application volumes. This marks a shift from the typical pattern where scarce job opportunities often drive more students to pursue higher education.

The decline in applications extends to full-time MBA programs globally, with two-thirds of programs reporting application declines, a drop of 13% year over year. However, the reduction in applications is not evenly distributed, with selective programs, those with acceptance rates below 40%, seeing only a 9% decline, while programs with acceptance rates above 85% experienced a 21% drop.

Despite the decline, top business schools continue to offer competitive salaries, with graduates of elite "M7" schools like Harvard, Columbia, Stanford, Northwestern Kellogg, MIT Sloan, University of Pennsylvania Wharton, and University of Chicago Booth receiving offers at median base salaries of at least $175,000. Nevertheless, the high cost of tuition, often exceeding $300,000, raises questions about the return on investment for students.

Even top business leaders, such as JPMorgan Chase CEO Jamie Dimon and Standard Chartered CEO Bill Winters, have questioned the value of business degrees, emphasizing that the skills learned at university may degrade over time. GMAC's CEO, Joy Jones, emphasizes the need for business schools to be transparent about the return on investment and the potential benefits of their programs to attract Gen Z students who seek stable, fulfilling careers and the flexibility to pursue diverse opportunities.