Grad school looking good to jobless

With college graduation approaching, Mel Gerrets III embarked on an ambitious job hunt.

He interviewed for positions in his native New Orleans and in Mobile, Ala., where he was attending Spring Hill College.

But the offers were slow in coming. So Gerrets, a 22-year-old business management major, came up with a backup plan.

"I pretty much told myself, 'If I don't find a job by August, I'm going to go to graduate school,' " Gerrets said.

So in the fall, Gerrets made good on his promise to himself and enrolled in Loyola University's master of business administration program.

He is not the first to turn to graduate or law school. Enrollment in such programs has historically spiked during periods of economic downturn.

"That's a typical thing to see. When the economy is bad, when people are having trouble finding jobs, graduate school is kind of a safe haven," said Susan Krinsky, associate dean of admissions at Tulane University's Law School.

Undergraduates unable to find jobs tend to gravitate toward academic programs during times of economic trouble. So do individuals who have been in the work force but are looking to retrain for a new career.

"Parking yourself in an MBA program during the turmoil and re-emerging two years later when the winds die down ... makes a lot of business sense for people," said Dave Wilson, CEO of the Graduate Management Admission Council, a Virginia-based association of graduate business schools.

There are early signs that interest in graduate and law programs across the country is on the rise. Though the number of people applying to the nation's law schools remained relatively flat in 2008, the number of individuals taking the Law School Admissions Test in June jumped 15 percent over June 2007, according to the Law School Admission Council in Newtown, Pa.

The Graduate Management Admission Test, required of all business-school candidates, was administered 13 percent more frequently this year than in 2007. And the average number of applications to full-time MBA programs climbed 10 percent from 2007.

"We may see the results of what's happening now next year [2009]," said Wendy Margolis, director of communications for the Law School Admission Council. "Obviously, the job market's tightening up a lot, and people aren't going to know what to do with themselves."

Tight times can sometimes offer up interesting new challenges in the work force.

"When the corporate machine is saying 'No hiring and no movements up or down,' everyone just has to get in there and work," said Bill Sandefer, director of graduate admissions for Tulane's A.B. Freeman School of Business. "Any time you get challenged, you get the opportunity to shine."

Still, Sandefer said opting for graduate school can open up a number of new opportunities for individuals.

"Everyone has asked that question: 'Do you think applications will go up with the economy?' " he said. "Traditionally, that seems to be the case."

"We're seeing a slight increase in graduate-program enrollment, and it looks like an uptick in interest going forward," said Salvadore Liberto, Loyola vice president for enrollment management and associate provost.

In fact, Liberto said he believes the downturn in the economy could lead to more interest in all forms of education as those who never obtained a bachelor's degree seek to retrain.

"This is going to set the stage for a new wave of education," he said.

Because of tightening in the credit markets, one of the biggest challenges to obtaining a graduate or law degree in the immediate future could be students' ability to finance their education.

Graduate students usually rely on personal savings, scholarships and loans. Some even sell their homes and use the equity to pay tuition. But every one of those means of financing has eroded, said Wilson, of GMAC.

"Savings have diminished. Equity in homes has diminished. Scholarships are still there, but [have been impacted], and student lending gets tighter and tighter," he said. "Those who look to finance education through lending are finding that the private loan market is harder and harder to get into as there are fewer players."

Wilson thinks financing challenges may mean that some will be accepted into graduate school but find themselves unable to afford the programs they wish to enter.

Any boost the economic slowdown gives to graduate schools will only accentuate a larger trend toward advanced degrees.

"There are two things that are driving graduate enrollment nationwide," Loyola's Liberto said. "If you include the economy, that would be the third."

Demographics are one major driver of graduate enrollments. A large number of undergraduate-age students are progressing through the educational system and are expected to fill graduate programs in years to come, Liberto said.

The new credibility that graduate degrees are claiming in the job market — a shift that began taking place in the 1990s — is a second driving factor in rising enrollments.

"The graduate degree has an awful lot of viability in the marketplace," Liberto said.

Gerrets, now enrolled in Loyola's MBA program, agrees.

"An MBA has always been in the back of my mind," he said.

In fact, Gerrets plans to stick with Loyola's graduate business program even though he landed a full-time job shortly after enrolling. Gerrets now works as a veterans service representative with the U.S. Department of Veterans Affairs and attends classes at night. He expects to complete his MBA on a part-time schedule in three to five years.

"I don't want to stop [graduate school]," Gerrets said. "I feel like the sooner I can get [the MBA], the better.

"A bachelor's degree does not go as far as it used to go," he said.