It’s the dream of many a starry-eyed college business student who wants a career on Wall Street after graduation. Major in finance, then get a job at a bulge and bracket firm or a boutique investment bank. Not surprisingly, the major is among the most crowded and coveted at many of the top undergraduate business programs.
At Pennsylvania State University’s Smeal College of Business. around 800 juniors and seniors major in finance, one of the most popular majors in the business college and university. There are 1,200 finance majors at Ohio State University’s Fisher College of Business, making up nearly one-third of the undergraduate business population. It’s a similar situation at many other schools, from elite colleges to large state universities.
“A lot of students want to do finance, It sounds sexy and there are good jobs and opportunities, says Patricia West, Fisher’s associate dean of undergraduate programs.” “But it isn’t for everyone.”
SOME SCHOOLS TRY TO LIMIT ENROLLMENT IN FINANCE MAJOR
Many financial service firms, of course, were hit hard by the Great Recession which caused severe cutbacks in hiring by investment banks, brokerage houses, and commercial banks. But since the era of bankruptcies and bailouts, the finance sector has made a significant recovery and there is newfound interest in these jobs on many college campuses.
It’s quickly getting to the point where the finance major may be getting too popular for its own good? That’s a message a growing number of business schools are trying to pass on to eager would-be finance majors, as they face crowded classrooms in the midst of dwindling or static financial resources. Some schools are taking steps to try to curb enrollment in the major, instituting enrollment caps, mandating that students must have a minimum GPA and, in some instances reviewing applications into the major on a case-by-case basis. As classrooms fill up, increasingly students are having a harder time getting into some of the classes required for their major, causing them to delay their coursework for a semester and, as a consequence, graduate later.
The University of Notre Dame’s Mendoza College of Business has watched the number of students who want to major in business creep up steadily the last few years, to the point where the school recently implemented an enrollment cap beginning with this fall’s class, limiting it to around 500 students per class, down from 725. That decision came about in part because of the high number of students who want to become finance majors, explains Dale Nees, Mendoza’s assistant dean for undergraduate studies. The school currently has about 10 to 15 percent more students than it has the capacity to handle, he says.
“It has been just recently that more and more people feel like they have to go into finance. There’s a little bit of that exponential factor going on,” he adds. “It gets down to what is the right balance. Do we want to be the College of Business or the College of Finance?”
MAKING IT HARDER TO BECOME A FINANCE MAJOR
The Smeal College at Penn State does not have an enrollment cap persay, but has made it harder for students to become finance majors by enacting a strict minimum GPA requirement that has crept up steadily over the years. The minimum GPA from 1997 in 2001 to become a finance major was a 3.0, and by 2005, it was 3.3. It crept up to 3.4 in in 2010 and then finally 3.5 in 2011, where it has remained since. The current GPA requirement is the highest of any major in the Smeal School, confirms William Kracaw, Smeal’s department of finance chair.
Even with those stringent requirements, the school still has about 200 students more than the department would ideally like to have, he said.
“It’s an imperfect system because we get a fair amount more than we expect that apply to the major and have the academic requirements to be admitted,” he said. “The classes are crowded, and it causes some inconvenience for students in terms of programming their classes and doing some of the other things they want to do while they’re here.”
‘WE CAN’T KEEP UP WITH THE DEMAND’
Students at Ohio State’s Fisher College must meet a minimum GPA requirement — that changes every year — to become a finance major. “It continues to be the school’s most sought-after major,” West said. Even if they can’t get into the major on the first try, many students will apply again the following semester to get in, she said. “What happens is they can reapply every semester, and so they may move into a limbo territory,” she says.
At the University of Illinois’s College of Business, one of the frequently asked questions on the Department of Finance’s webpage is “Why Can’t I get into Finance 300?” The course, which covers the theories and applications behind the capital markets, is required for finance majors, but many other students want to take the class as well.
“If you’re not on a limited list of majors who must have the course to graduate, I’m afraid you’re out of luck,” the reply on the finance web page states. “We can’t keep up with the demand for this course. The bottom line is that the number of majors in finance has expanded much faster than we’ve been able to hire faculty.”