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 staring down an AI-driven job market with fewer guarantees —and even business school is looking less like a lifeline.

Applications to U.S. graduate business programs plunged 25% in 2026, marking the steepest decline in nearly a decade.

According to the data released Tuesday by the Graduate Management Admission Council, the drop reverses two consecutive years of application growth.

A perfect storm of factors—including economic uncertainty, shifting visa policies , and geopolitical tensions —is weighing on demand. But the economy stands out as the biggest drag: 90% of graduate business programs surveyed said economic changes, including recession fears, layoffs , and shifts in the job market, affected application volumes, while 73% reported a major or moderate impact, the highest share of any factor.

That’s a shift from the usual pattern: When jobs are scarce, people often turn to school to improve their prospects. But this time, economic uncertainty is making prospective Gen Z students think twice about the cost of another degree.

It comes as entry-level jobs continue to be in the crossfire of AI.

One-third of employers said they were replacing entry-level jobs with AI , according to GMAC’s Corporate Recruiters Survey released over the summer. More than half of the roughly 600 respondents recruit for Fortune 100 or Fortune 500 companies.

The decline extends to MBA programs specifically: Two-thirds of full-time MBA programs worldwide reported application declines, with applications falling 13% year over year.

But the pullback isn’t equally distributed. Applications to highly-selective programs, with acceptance rates below 40%, fell just 9%. At programs with acceptance rates above 85%, applications dropped 21%—suggesting that even as prospective students grow more cautious about business school, selective programs are proving more resilient.

The six-figure payoff may help explain why. Across the elite “M7” business schools— Harvard , Columbia, Stanford, Northwestern Kellogg, MIT Sloan, University of Pennsylvania Wharton, and University of Chicago Booth—roughly 90% of 2025 graduates seeking employment received job offers. Median base salaries for graduates who accepted jobs reached at least $175,000 at each school.

But the high career prospects also come with a hefty price tag: Tuition at top MBA programs has climbed to over $300,000 in some cases, raising the stakes for students weighing whether the degree is worth the investment.

Even as young people increasingly question the value of degrees, some top business leaders have similarly voiced that credentials may not be worth the same as they did previously.