Chinese Deluge U.S. Master’s Programs; Overseas Students Seek Specialized Degrees to Win Competitive Edge, and B-Schools Enjoy Revenue in Tough Time

Updated April 3, 2013, 8:36 p.m. ET

Chinese Deluge U.S. Master’s Programs

Overseas Students Seek Specialized Degrees to Win Competitive Edge, and B-Schools Enjoy Revenue in Tough Time

By MELISSA KORN

When the business school at the University of California, Davis, started its master’s program in accounting last year, administrators expected to attract aspiring accountants from nearby colleges. What they got instead was a wave of interest from overseas: Roughly two-thirds of the 189 applications received for last fall’s entering class came from Chinese citizens. “Frankly, we were shocked at the deluge of applications…for what we saw as a program that prepared students for a U.S. credential,” says James Stevens, assistant dean of student affairs. Davis has plenty of company. Specialized master’s degrees in accounting, finance and other disciplines—generally aimed at students just out of college and lasting one year—have found tremendous popularity in recent years among Chinese nationals seeking a competitive edge and U.S. experience.

Such demand has provided steady revenues for business schools at a time when traditional M.B.A. programs are losing their appeal among U.S. students. But the uneven applicant pool has left many schools weighing financial goals against uninspiring classroom experiences for both Chinese and local students and worrying about weak job-placement rates.Like companies, business schools “have to change with the times and go where the market is,” says Anurag Gupta, chair of the banking and finance department at Case Western Reserve University’s Weatherhead School of Management.

More than 85% of applicants to Weatherhead’s current Finance master’s program came from China, and more than 80% of the 58-student class is Chinese. The school launched a version of the program in Shanghai a few years ago to balance diversity in the Cleveland program and earn money abroad.

Companies in China’s fast-growing finance sector want hires with some advanced skills beyond a college degree, yet don’t need recruits with the high-level strategy expertise—and high salary requirements—that an M.B.A. might have, according to students and schools. A U.S. credential also makes students more appealing to multinational companies, schools say.

Nearly 60,000 Chinese citizens took the Graduate Management Admission Test in the 2011-2012 testing year, about triple the number in 2007-2008. In the latest year, 78% of those score reports were sent to U.S. programs, while 64% went to specialized master’s degrees world-wide.

Patricia Ying Ding was one of those students. Ms. Ding, 23 years old, attended college in her native China but spent time at University of California, Berkeley, and wanted more Western experience. Now enrolled at MIT Sloan School of Management’s M.S. in Finance program, about 85% of Ms. Ding’s class is international, and the school says a large share of those students are from Asia.

She remains unsure whether her class’s demographics are a good thing. “We tend to hang out with people of the same ethnicity,” she says.

Eleven of the 12 current finance master’s students at Loyola University Chicago’s Quinlan School of Business are international, with eight from China. That has challenged instructors, students and administrators.

“It changes the dynamic when there’s a group of students who have something in common that other students don’t share,” says Dean Kathleen A. Getz. “It can create some sense that there are two different groups being taught.”

This fall, Quinlan will begin asking international students to take courses on business communication and U.S. classroom customs. To improve job placement, it will arrange student visits to companies interested in hiring international students, and pair them with U.S. student “buddies” to ease the cultural adjustment.

Meanwhile, Davis has reassessed its soft-skills training and career-services strategy to accommodate the unexpected makeup of its new accounting class. For example, administrators are forging ties in finance departments at companies such as Wal-Mart Stores Inc., WMT -0.03% rather than just at accounting firms as originally planned, to extend their potential job opportunities.

Students must adjust, too.

Karla Savina, one of three Americans in her 57-person class in the Applied Finance program at Pepperdine University’s business school, says she has learned about Chinese culture, and adds that her hardworking classmates have pushed her academically. But their unfamiliarity with American-style classroom discussion means Ms. Savina, 36, doesn’t “get the communication that I would like within the classroom.”

Application volume for the master’s in Applied Finance program has soared in recent years, fueled almost entirely by increases from China. The Graziadio School of Business and Management received 158 applications for the class that started in fall 2009—126 of which were from China—and received 497 for the class that started last fall, with 471 from China.

Though “there are benefits to having a more diverse student body,” says Michael Williams, associate dean of full-time programs at the business school, “I would not say that we are at all unsatisfied with our current population.”

Mr. Williams says the program has benefited from the name recognition of Pepperdine’s Shanghai program. Strong social networks and alumni recommendations multiplied the effect, he says.

But some schools fear that becoming a darling of Chinese students—or students from any single country—may irk local and foreign students.

The business schools at University of Notre Dame, Indiana University and MIT are looking to their parent universities’ undergraduates to help diversify their master’s of science classes. Quinlan is also in talks to create a scholarship to entice Loyola graduates to stick around.

Applicants from abroad are “asking a lot about class makeup,” says Marci Armstrong, associate dean of graduate programs at Southern Methodist University’s Cox School of Business. “They’re seeking to be around American students. They really don’t want to be in a class where everyone around them is from their home country.”

Cox initially expected to double enrollment in the program’s second year, though Ms. Armstrong says it has “retrenched” after struggling to find jobs for its Chinese cohort—19 of 41 students. It has made some traction with interviews, but by the end of March just two of the Chinese students reported they had secured a job.