A few years ago, Southern Methodist University's Southwestern Graduate School of Banking canceled a class on problem loans due to lack of interest. Now students are signing up for the course in droves.
At Louisiana State University, banking students are crowding into credit analysis classes, bypassing a once-popular course on bank mergers.
Meanwhile, the Pacific Coast Banking School in Washington has rolled out new courses with such titles as "How Leaders Lose Their Way" and "Survival Skills for Bankers," and one of the more popular new courses at University of Wisconsin's Graduate School of Banking is one called "Crucial Conversations."
The worst financial crisis since the Great Depression is changing the way students and schools approach banking education. Bank employees who once might have viewed banking school as a necessary step in their career advancement now see it as crucial to understanding the depths of crisis and avoiding the mistakes of the past. Schools, meanwhile, are responding to this demand by developing curricula shaped by current events.
Yet while mid-level bankers seem more eager than ever to learn, enrollment is down across the country because many banks, under pressure to cut costs, simply aren't in a position to send promising employees to school. This has put added pressure on banking schools to demonstrate their relevancy not only to students, but their bosses - the ones who sign tuition checks.
Indeed, Kirby Davidson, the president of Wisconsin's banking school, says students talk more about "accountability" these days. Many are being required to submit reports to their CEOs to explain what they've learned - and justify the expense.
Tennessee banker David Hayes says what he is learning in his second year at the Graduate School of Banking at Louisiana State University feels far more essential than it did when he started.
"The reason I was going was to put myself in a better position at the bank. Now, I use it to handle what's happening at the bank," says Hayes, an assistant vice president of commercial lending at The Farmers Bank in Portland, Tenn.
Hayes says he has applied knowledge gained at banking school toward managing past-due loans and bottom-line declines at his bank. In the past year, net income at his $475 million-asset bank has suffered a 35 percent drop.
"People in banking for 30 or 40 years say they haven't seen a situation like this," he says. "The decisions we are making are different from any other time in banking."
Doug Adamson head of professional development for the American Bankers Association - affiliated with the University of Pennsylvania's ABA Stonier National Graduate School of Banking - says he's never seen a crop of banking students so engaged.
"The depth of questions, the insatiable appetite for more information and more insight about how to run a bank. This is different," he says.
Adds S. Scott MacDonald, president of SMU's banking school in Dallas: "They are concerned about what they need to know, and what they don't know."
That heightened interest is not reflected in the enrollment numbers.
At Pacific Coast Banking School, which gets most of its students from large banks, first-year enrollment dropped nearly 50 percent from 2008 to 2009.
"They're responding to the TARP issues," says David Enger, executive director of the Bellevue, Wash.-based school. "We're in a down cycle. It's simple as that."
Enger, though, made clear that, even with fewer students, the school is not cutting back its programs. "We have a fiduciary responsibility to this industry," he says. "I'm not taking my foot off the gas pedal one little bit."
At SMU, first-year enrollment dropped 25 percent this year compared to last. The school gets about 60 percent of its students from Texas. Most students work for banks with less than $2 billion of assets.
In Wisconsin, where about 15 percent of the school's students come from large banks, first-year enrollment dropped about 10 percent between 2008 and 2009.
Overall student attrition - typically 8 percent - was 12 percent this year, says Davidson, its president.
At Stonier, where about half of the student-bankers come from large institutions, first-year enrollment dropped about 9 percent. Those numbers reflect the merger of Stonier with the National Graduate School of Banking, a community bank-oriented program that had operated out of Fairfield University in Connecticut.
At LSU, where the program mainly attracts bankers from regional or small banks in the Southeast, first-year enrollment dropped just 4 percent between 2008 and 2009. But the numbers were down 12 percent compared to 2006, when LSU attracted 251 first-year students.
Hayes, the LSU student and Tennessee banker, says part of the value of his banking education has been what he learns from fellow students. That those numbers are shrinking is a concern, he says.
"Banks need to realize what kind of value [continuing education] brings to their employees, instead of making this a line item that's being crossed off," he says.
Don Woodland, director of the Baton Rouge program, says bank executives have a "wait-and-see" attitude right now when it comes to spending money on banking education, which costs around $3,000 to $4,000 per student a year.
SMU's MacDonald says bank executives have assured him they will send students again. He believes the year-over-year decline will not dramatically affect the readiness of future banking leaders, but a persistent drop in enrollment will. "I think if we continue to view education as an expense and not an investment, then it will create a leadership gap," MacDonald says.
