When the economy tanks, graduate school applications go up. That's one of the few bits of good news in which educators could have reasonably taken comfort this year. No more.
The number of students taking the Graduate Record Examination will decline in 2008, the first time ever that the GRE has seen a fall in test-taking during an economic downturn. Because the GRE is required for the vast majority of graduate school programs, its numbers closely correlate with trends in applications.
Educators who learned of the GRE drop Friday in a question-and-answer session at the annual meeting of the Council of Graduate Schools said that they were shocked and some said that they were worried. The GRE drop reflects both those in the United States and international students seeking to enroll in American graduate programs.
Since 2004, the number of people taking the GRE has increased steadily, from 501,000 to 539,000 to 577,000 to 633,000 in 2007. The Educational Testing Service started the year projecting a total of 675,000 for 2008 and now expects the total only to be about 621,000.
Part of the concern arises because M.B.A. programs also typically see increases in applications in tight economic times, and evidence suggests that the pattern will be true to past experience for the business schools. The number of people taking the Graduate Management Admission Test is up this year  -- both in the United States and abroad.
On Friday, David G. Payne, associate vice president of ETS for college and graduate programs, said that the "current hypothesis" is that the credit crunch is discouraging some people from considering graduate school, especially if they think they will not receive substantial financial support from the programs they might consider.
Payne noted that the projected decreases this year come both from the United States and the rest of the world. Volume in the United States is expected to fall to 449,000 from 456,000. Volume outside the United States is expected to fall to 172,000 from 177,000. Looking outside the United States, the shifts are not consistent. The two countries with the largest volume of GRE test takers -- and of foreign graduate students in the United States -- are China and India. Both have seen their GRE numbers rising steadily, and China will still go up this year, but India will see a sharp decline.
GRE Volume in China and India
|2008 (current projection)||52,000||55,000|
Adding to the concern about the falling GRE volume is that it follows several campaigns by ETS to encourage more people to take the test. In the last year, for example, the testing service has started a new effort to encourage college juniors and seniors to take the test even if they aren't certain that they will apply to graduate school. The rationale -- publicized by ETS to undergraduates -- is that GRE scores are good for five years and that people generally do better on the exam when they take it as college students than after a few years of work outside of college. ETS has also started a campaign to encourage those worried about their economic futures to consider taking the GRE.
Debra W. Stewart, president of the Council of Graduate Schools, said she too was surprised by the data. "We're in the worst financial crisis, so you would think applications would be soaring," she said. The council does annual surveys on application and enrollment trends, but they will come later in the admissions cycle. Stewart said that the organization has done some informal polling of members on the group's listserv and is finding "a mixed picture," with only some institutions reporting declines. But of those not reporting declines, they are reporting "an average year," not the kind of application year one would expect with an economic crisis.
Stewart has several theories about why declines may be taking place this year, despite historic trends. She said it was possible, as ETS officials suggested, that the credit crunch was making it more difficult for students to borrow -- or that hearing about the crunch discouraged some from trying. In that same vein, she said that with many colleges and universities announcing budget cuts, many departments may not have the same levels of funds to offer in fellowship support.
In addition, she said that while economic uncertainty in the past has prompted some people to decide to improve their skills so they can seek better jobs, the turmoil is so great this year that "no one will leave a job if they have a job -- they think the risk is too much to take."
Stewart also stressed that just because the surge in interest in graduate school has not happened this year doesn't mean it won't start. Many people these days are experiencing "freezing behavior" where they are so uncertain about their next move and the state of the economy that they aren't making any changes, she noted. "It could be that this has created a temporary pause where we would have normally seen a flow to graduate school. That the flow hasn't started doesn't mean it won't."
Further, Stewart said that it should start, and that graduate programs and the government should encourage that through financial support. "The only way out of this is with development of intellectual infrastructure," she said. American society needs more people with higher skill levels, and so should be concerned about any drop in graduate applications or enrollments. Right now, she said she worries that the economic stresses on American universities are hurting graduate education. "I'm very worried about the financial stresses that are currently on our member institutions across the board. Graduate education can only be healthy when institutions within which it is offered are healthy,” she said.
Measuring Personal Potential
One of the largest changes in the GRE is the introduction of the Personal Potential Index,  which ETS is adding to the GRE next year and that will allow students to have people who know them rank their creativity, communication skills, teamwork, resilience, organizational skills and ethics. This index -- which does not produce the same gaps among racial and ethnic groups found in most standardized tests like the GRE -- has been years in the works,  and the event where ETS announced the volume decline was actually planned to promote the PPI, as the index is called.
As ETS has moved closer to going live with the new index, it has been conducting testing of it. And ETS officials used Friday's meeting to invite graduate programs to help in planning "validity studies" that would measure how people with different PPI scores actually perform in graduate school.
In an interview, the director of the research center at ETS, Patrick Kyllonen, said that some early studies are encouraging in that they address key concerns some had about the PPI. One key finding based on pilot use of the PPI is that evaluators -- generally professors or employers -- offer a range of scores. "A lot of people thought everyone would get perfect scores and that hasn't happened," he said. "The raters make full use of the scale."
In addition, Kyllonen said that there is no evidence so far of a "halo effect" in which people receive the same scores on all of the attributes being evaluated. Rather, the people doing evaluations do appear to be making distinctions and not applying some overall standard to all of the categories. "I think the PPI is going to give a more complete picture," he said.