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Sinking demand for graduate business programs in the U.S., particularly from international applicants, is limiting revenue in a historically profitable area, according to Moody's, the credit rating service.
Moody's cited fall application data from a survey conducted by the Graduate Management Admissions Council, which founded that 59 percent of U.S. business schools saw a decline in applications, with a 6.6 percent overall decline in volume. Applications from domestic students dropped by 1.8 percent, but those from international students were down by 10.5 percent.
Application volume grew at a healthy pace, however, at business schools in Asia, Europe and Canada.
"International student enrollment is an important component for most graduate programs, comprising approximately one-fifth of total graduate enrollment in the U.S., and declining international demand will place additional negative pressure on net tuition revenue growth," said Moody's. "The softening of international enrollment is correlated with international student concerns around the availability of visas, as well as post-employment work prospects in the U.S."
Top-ranked business schools likely won't be affected by the decline, according to Moody's. But lower-ranked schools face either stagnant or declining revenue from their business schools.
