Business Schools at a Crossroads: AACSB 2025 Report Reveals Pressing Financial and Strategic Challenges

Financial Models of Business Schools Under Pressure
According to the report, more than 75% of business school leaders have identified financial and business models as a critical issue for future of business education. 
Traditional tuition-dependent structures are proving unsustainable, especially in the face of rising operational costs, reduced public support, and inflation. “Business schools face critical financial realities. Amid economic volatility, shifting public funding, intensified competition, and geopolitical tensions, financial sustainability has become a paramount priority,” notes the report.  

To ensure long-term sustainability, business schools are adopting measures to diversify their revenue streams. These include:

• Executive education expansion including lifelong learning programs
• Strategic partnerships with industry 
• Seeking Research Grant funding

According to the report, while the average business school operating budget rose by 19% over six years, smaller institutions are struggling disproportionately.

Changing Learner Profiles and Enrollment Patterns
The global demand for business education remains stable—but nuanced. The report notes following trends in student enrollment: 

• Undergraduate and master’s applications are rising, but regional differences persist. 
• MBA enrollment is slowly declining in certain regions, although it remains the greatest share of enrolled master’s students in the Americas. 
• On a global scale, master’s specialist programs dominate total master’s enrollment, driven by demand in EMEA and Asia Pacific. 

New learner expectations are reshaping student recruitment and retention. Students now prioritize:

• Career-focused offerings
• Mental wellness
• Flexibility
• Personalized support

The changing expectations of students demand rethinking of how institutions can attract and engage today’s diverse student body.

Developing Human-centered Competencies and Skills Key to Graduate Readiness
The report emphasizes a growing consensus among employers and educators: technical knowledge is not enough, and human-centered skills, such as critical thinking, communication, resilience, and ethical leadership, are key to long term graduate success.

The report spotlights the rising HR trend of competency and skill-based hiring, and dwells on its implications for business schools. “Skills-based hiring—the practice of evaluating candidates based on competencies rather than degrees—has the potential to reshape workforce recruitment and, by extension, business education. If widely adopted, this approach could reduce reliance on traditional degrees, especially in fields with viable alternative learning pathways.” 

AACSB 2025 State of Business Education Report recommends that to prepare students for successful lifelong careers, Business schools should focus on investing in:

• Experiential Learning
• Interdisciplinary Education
• Micro-credentials

Shifting Faculty Roles and Expectations
The report notes that faculty roles and expectations are also undergoing rapid transformation. Beyond research and teaching, faculty are expected to engage with industry, innovate in pedagogy, and contribute to institutional visibility and revenue generation.

The AACSB Business Education Report highlights increasing concerns about faculty burnout, limited institutional support, and difficulty in attracting top talent in high-demand fields like AI and sustainability. Schools are now rethinking tenure incentives, mentoring frameworks, and faculty development models to retain excellence, notes the report.

Strategic Leadership Required for a New Era
In today’s uncertain times, Deans and academic leaders are facing unprecedented complexity. From financial sustainability and faculty retention to navigating regulatory shifts and geopolitical instability, leadership now requires a unique blend of agility, diplomacy, and long-term vision.

AACSB report has called for redefinition of leadership that promotes cross-border collaboration, data-informed decision-making, and alignment between institutional mission and market realities.
In conclusion, AACSB 2025 State of Business Education Report makes one thing clear: the future of business education demands strategic reinvention. Financial agility, student-centric models, lifelong learning ecosystems, and global cooperation will define the next chapter. 

As Prof Lily Bi, AACSB’s President and CEO, aptly puts it, “while the current landscape undoubtedly presents unprecedented challenges for institutions worldwide, I remain confident that together, guided by AACSB’s mission and collaborative spirit, we can continue delivering the high-quality, impactful business education that our world needs now more than ever.”

Stay tuned to MBAUniverse.com for insights and updates on trends shaping management education in India and around the world.