In a year unlike any other, how did the best U.S. business schools — the vaunted Magnificent 7 — make out? In several ways, the data show that 2020 dealt significant setbacks to the M7, as it did to every B-school. But they also show the strength and resilience of the most elite graduate business education programs.
The seven elite schools that make up the unofficial group known as the M7 — Stanford Graduate School of Business, Harvard Business School, the University of Pennsylvania’s Wharton School, MIT Sloan School of Management, Northwestern University Kellogg School of Management, the University of Chicago’s Booth School of Business, and Columbia Business School — did not have yet another great year in what had been a long, unbroken line of them.
Harvard, faced with an avalanche of deferrals, enrolled its smallest MBA class in decades. Four schools saw declines in the number of women enrolled in their MBA programs — one school dramatically so — and two slipped below the 40% threshold. Pay increases for graduates slowed, entrepreneurship numbers fell at five of seven schools (and cratered at HBS from 17% of the class to just 10%), GMAT numbers declined at six of seven schools, and the overall acceptance rate for the group grew, according to a Poets&Quants estimate.
THE M7 HAVE CERTAIN ADVANTAGES THAT ALLOWS THEM TO OVERCOME ANY CHALLENGE
Comparing and contrasting schools by the numbers they provide is often tricky business. That’s because most MBA programs report metrics in a way that is more often than not most favorable to each institution. That is especially true in how schools report under-represented minorities. Harvard, for example, was able to significantly increase the percentage of Black Americans in the class to 11%, higher than the more typical 7% to 9% representation of more recent MBA classes. But the actual number of Black Americans in the Class of 2022 was not all that different, with 52 students out of the 732. More interestingly, HBS reported its URM numbers as a percent of the U.S. citizens and permanent residents in the class and not of the entire enrolled class as Wharton does. That sleight of hand — which, it should be noted, is the Graduate Management Admissions Council industry standard — pushed the Black American percentage from 7.1% to 11% and for Hispanics from 6.1% to 9.0%.
Nonetheless, the M7 have certain advantages that allows them to overcome any challenges, even in an unprecedented year. They have the top faculty, the most pioneering research, constant curricular innovation, networking and employment opportunities, access to capital and influence, and permanent hegemony atop the rankings — when the rankings happen, and when the schools don’t boycott them. It all adds up to a powerful reputation that keeps the top talent flowing in. In short, the M7 schools are where the action is, and everyone knows it — and even amid the struggles of 2020, that helped the schools rack up some notable successes, particularly in turning around one of the biggest concerns of the past few years.
THE UPSIDE: APPS CLIMB, COST CLIMBS SLOWER, PAY KEEPS CLIMBING
That concern? You guessed it: MBA applications.
Like all B-schools in the U.S. and most schools globally, the M7 had been on a years-long downward trend in MBA apps leading up to 2020. The pandemic — which led to extended deadlines, relaxed admissions requirements and at least a perception of lowered admissions standards — sparked a flood of new interest in the MBA that benefited nearly all the top-25 U.S. schools and the leading European and Asian schools, as well. All the M7 schools except Stanford saw year-over-year app increases, and four years of worrying declines were reversed in one cycle for five of the seven; only Stanford and Harvard remain in a deficit compared to their record highs of 2016-2017 (see the table below for details).
Overall, applications to the M7 MBA programs increased 14.6% from 2018-2019. Last year at this time, the schools were reeling from a collective 5.7% decline from 2017-2018. One immediate result was that class size grew at every school except Harvard, and Harvard’s precipitous drop in student population is certain to be temporary, largely caused by the school’s more generous policy of granting a deferral to every admitted applicant who wanted one (see the comments to that effect by Chad Losee, HBS managing director of MBA admissions and financial aid, on page 3).
The pandemic helped M7 students more than it helped the schools. Admits to the M7 saw the cost to attend a program rise at a slower rate this year, with the average increase in price tags between 2019 and 2020 for all seven schools just 1.1%, compared to 2.3% between the previous two cycles. Recognizing the tribulations imposed on students by the pandemic — and the unfairness of raising prices for what has essentially been online MBA classes — MIT Sloan, Columbia, Wharton, and HBS all kept tuition flat, and total cost at Wharton actually decreased. See page 2 for details.
And finally, pay kept inching up for MBA grads of the M7 schools, as P&Q has documented in extensive coverage since the first employment reports began trickling out last fall. All seven schools saw the numbers go up overall, though there was plenty of fluctuation across industries; the biggest improvement came at MIT, where total compensation was up 7.5% for the Class of 2020 compared to their predecessors. At Stanford, it rose 6%. Find more information on page 2, including links to each school’s 2020 jobs report.
WHY WE WRITE ABOUT THE M7
The M7 is not a formal designation. Decades ago, the deans of the seven schools decided to create their informal network to share information and to meet twice a year. But it’s not only the deans who get together. Vice deans, admission directors, career management directors, even PR and marketing folks meet in private sessions, for which the schools rotate hosting duties, business school officials trade gossip, best practices, and whatever topical issues end up on the agenda. And no press releases or formal announcements are ever issued.
Which leads to no end of speculation about these meetings — and jealousy, especially from the deans of schools just outside the M7, who privately gripe about how elitist the whole exercise is. That’s one reason Poets&Quants has done a great deal of “beyond the M7” reporting, examining which schools might constitute a “Second M7” or even S10. And we do this story annually to explore, partly, which schools in the M7 might be excluded based on performance.
From an applicant’s point of view, however, the M7 continues to be the Holy Grail of the MBA kingdom. Every year, there’s a sizable number of applicants who will only apply to the M7 schools or a subset of them, even though there are many other business schools that are just as or nearly as good. Indeed, for some candidates, a case can easily be made why Dartmouth College’s Tuck School of Business, or the University of Virginia’s Darden School of Business, or Yale School of Management, or one of several other elite B-schools might well be preferable to an M7 institution. After all, the cutoff at seven was arbitrary to begin with, and was made at a very different time.
Still, the fascination with this mysterious group and these schools can turn into an obsession for any highly striving MBA candidate. Which is why we’ve put together this comparative look at the M7 players, comparing and contrasting them by everything from GMATs and GPAs to starting salaries and job offer rates. See below for Graduate Record Exam scores, and see the next pages for tables on much more.
DON’T MISS POETS&QUANTS’ COVERAGE OF THE TOP SCHOOLS:
Harvard Business School
Get into an M7 school, and you can write your own ticket. But first you have to get in — see the table on the previous page showing acceptance rates for an idea how difficult that is — and then you have to pay for it.
The highest estimated cost of an MBA degree among the elite schools of the M7 is at MIT, where two years of tuition, room and board and other expenses comes to an estimated $241,692. That was the case last year, too. Before last year, though, the most expensive MBA program year in and year out was usually Stanford GSB’s. But at Stanford — where the price tag, including living expenses, is now $237,288 — the total cost has risen by less than $6,000 since 2019. Of course, that’s the price for a single person — it’s much more costly for married students at Stanford, where the two-year cost of an MBA balloons to $281,760 if you have a spouse.
Then again, all these gaudy tuition and total cost numbers are pre-scholarship grants — and it turns out that even though all of the M7 schools now cost well over $200,000 to attend, all offer financial help at fairly high levels, with both Harvard and Stanford MBA students receiving an average of more than $40,000 annually (according to the most recent data available), up from $35K in 2019; also in 2019, Wharton and Booth students received $32,000 and $30,000, respectively. Here’s slight more updated more data from last year; schools don’t make overall figures like this readily available, so check their websites for more up-to-date information on fellowships and scholarships.
There are many. The money is out there. We know, for example, that Harvard leads the way in aid packages among most schools. It’s an important part of the financial puzzle to keep in mind when you apply to these schools.
And what did the most recent M7 classes look like? See the next two tables for details.
POETS&QUANTS’ COVERAGE OF THE M7 CLASS OF 2020 EMPLOYMENT REPORTS
Columbia Business School graduation
QUOTES FROM THE M7
Jamie Schein, assistant dean and director of Stanford GSB’s Career Management Center:
“What strikes me about the Class of 2020 is that despite the challenges in the global pandemic and with the economy, the job outcomes were strong. The mean and median salaries were record-breaking for the sixth consecutive year, and signing bonuses were up as well.
“Our graduates remained focused and determined, finding careers that allowed them to make a difference in the world around them, despite the turmoil in the economy and global health crisis. The strong outcomes in this employment report are a testament to their value in the marketplace.”
Liza Kirkpatrick, managing director of Kellogg’s Career Management Center:
“As I reflect on the employment outcomes for our 2Y MBA Class of 2020, one thing is indisputable — this past year was an incredible display of resilience, collaboration, and creativity. Despite significant disruption to virtually every industry, including a complete pivot to how companies recruit and interview, I’m incredibly proud to say that 95% of Kellogg’s 2Y MBA class received job offers and 93% of the class accepted job offers within three months of graduating. Among our international 2Y MBA grads in particular, 96% received job offers and 93% accepted job offers within three months of graduating.
“To see this success during such a disruptive year is an incredible testament to the strength of the Kellogg network, our longstanding and diverse relationships with employers, and the resiliency of our students.”
Maryellen Reilly, deputy vice dean of Wharton’s MBA program
Maryellen Reilly, deputy vice dean of Wharton’s MBA program:
“Given the extraordinary circumstances of spring and summer 2020, we are so proud of our students for their resilience and perseverance and grateful to our recruiting partners for their commitment and adaptability as conditions shifted and changed. While some summer internships were delayed, shortened, or unfortunately canceled, we are thrilled to report that 99.9% of first-year students seeking a summer internship received an offer. While 93.5% of students seeking employment in the graduating class received a full-time offer is a decrease from last year at 98.5%, we are very satisfied with these numbers given the headwinds the job market was facing.
“We will continue to work with our students, alumni, and companies to continue to find new ways of adapting the recruiting experience, providing means of connecting and developing relationships in a virtual world, and joining high-quality candidates with highly desirable opportunities.”
Chad Losee, Harvard managing director of MBA admissions and financial aid:
“We enrolled a smaller class of 732 students this year as a result of the deferral option we offered incoming students as they navigated the onset of the pandemic. The data presented in the Class Profile reflect these 732 enrolled students. Students who deferred will be represented in the Class Profile when they enroll over the next two years.
“As I’ve noted before, we are actively exploring increasing our class size beyond our typical 930 for the next two years, though that has not been approved yet. Please also note that the deferral option extended in 2020 was a one-time exception because of the onset of the pandemic. (Applicants) should apply in the year (they) are ready to enroll, as we have reverted to our practice of not offering deferrals outside of personal emergency situations.”
Susan Sandler Brennan, assistant dean of the MIT Sloan Career Development Office:
“Market uncertainty in March impacted full-time and internship opportunities, with an unprecedented number of rescinded or canceled offers,” Brennan says. “The MIT Sloan community, including our leadership, faculty, centers and initiatives, and alumni came together to source hundreds of opportunities and fund select internships. It has been a year of partnership and resilience.”
Adds Brennan: “The MBA Class of 2020 performed well in a challenging market, with 95.5% receiving offers within three months of graduation. Forty-seven percent of job-seeking graduates accepted positions with employers who hired three or more Sloanies; and 52% of organizations hired Sloanies for the first time in 2020.”
Regina Resnick, senior managing director of the Columbia Career Management Center:
“This year, Columbia Business School students demonstrated resilience during a time of unprecedented disruption and landed well.”
Donna Swinford, associate dean for student recruitment and admissions to MBA programs at Chicago Booth:
“This was a challenging year for everyone. The world changed for all of us almost overnight. Both schools and applicants had to shift gears very quickly, and I’m extremely proud of the resiliency I saw within our admissions team and our candidates. If you look at the timeline, three days before our Round Two decision, Illinois went into a lockdown. It was heartening to witness everyone’s spirit and ability to navigate such unprecedented challenges.
“Our admits have been faced with one change after another, and their capacity for dealing with ambiguity was tested almost immediately upon being admitted. We’re proud of how all of our admitted students, current students, faculty, staff, alumni, families, and other members of our community have stepped up during this time. This fall, we welcomed another incredibly impressive class that represents a wide range of industries, backgrounds, regions, and career interests, but most notably, represents the resilient, bold, and supportive nature that we see in the most successful Boothies.”
POETS&QUANTS PROFILES OF THE M7 CLASS OF 2022
AND OUR MEET THE CLASS SERIES
(STANFORD & COLUMBIA YET TO BE PUBLISHED)
Kellogg School of Management at Northwestern University
One fact of business school life can be counted on year to year: The M7 schools will be at or near the top in every ranking. But not in 2020.
In 2020, a year beset by coronavirus, one major publication to call a hiatus on its annual list and the M7 collectively agreed to boycott another. The Economist nonetheless went ahead and published its annual list, excluding the seven schools, much to joy of other schools and bewilderment of neutral onlookers.
At Poets&Quants, where we annually publish an aggregate ranking, the disruption of the pandemic and confusion among other ranking entities made our job more difficult — but we soldiered on. The P&Q list usually finds the M7 schools at Nos. 1 through 7 — and that happened once again in 2020, despite the circumstances. One change: Harvard, ranked third in 2019, and Wharton, ranked fourth, swapped places in the latest list, while Stanford remained the overall top school.
The M7 IN THE 2020 RANKINGS
POETS&QUANTS: STANFORD AGAIN TOPS POETS&QUANTS’ 2020-2021 RANKING OF THE BEST MBAs
U.S. NEWS: HARVARD FALLS TO LOWEST RANK EVER IN U.S. NEWS RANKING
BUSINESSWEEK: BUSINESSWEEK AGREES TO SUSPEND ITS MBA RANKING THIS YEAR
ECONOMIST: WILD CHANGES IN THE ECONOMIST’S NEW MBA RANKING
FINANCIAL TIMES: HARVARD NUDGES ASIDE STANFORD FOR TOP HONORS IN FINANCIAL TIMES’ RANKING
FORBES: WHARTON TUMBLES IN FORBES’ 2019 MBA RANKING
2020 BUSINESS SCHOOL RANKINGS: THE COMPLETE COLLECTION
Aerial view of Wharton’s Huntsman Hall
What industries are M7 grads choosing? The answers may not surprise you, but the snapshot gives an idea of each school’s culture. Below that, the most current available data on each school’s alumni networks. Kellogg’s and Harvard’s Fortune 500 CEO numbers and Stanford’s rate of giving number are the only ones that are current for the bottom two categories.
SEE OUR PREVIOUS COVERAGE OF THE M7: