The full-time MBA degree, long the crown jewel of business schools, has lost its lustre.

Applications to full-time programmes plummeted over the past couple of years as both professors and MBA graduates questioned the degree's cost and its value in the workplace. The big unanswered question: Will the full-time MBA ever sparkle as brightly as it once did? Or has it become an overpriced commodity?

For now, it's still unclear whether the drop in full-time applications is merely cyclical or a harbinger of a longer-term shift. Daphne Atkinson, vice president of industry relations at the Graduate Management Admission Council, takes the cyclical perspective. "I'm cautiously optimistic that it's a short-term trend," she says. "I think it will be a slow build and that it simply wouldn't be reasonable to expect a complete reversal immediately. But as the job market improves and there's more choice for MBAs, that will lead to happier grads and more positive word-of-mouth marketing."

She doesn't anticipate another application surge like the one after the Sept. 11, 2001, terrorist attacks in New York and Washington, but rather an eventual rebound to more normal levels. "I don't expect to see the high-water mark of 2001-2002 again in my lifetime," she adds. "A lot of people in the mix then really didn't belong because they didn't have the career focus of an ideal MBA candidate. Some were just refugees from a tanking economy."

Looking toward 2010, the council is optimistic that applications for all types of MBA programmes will grow as demographics become more favourable in some regions of the world. Population statistics show an expected increase in the number of people in the primary MBA age range -- 25 to 29 years old -- in both the US and Asia. However, the council says, the business-school-age population is expected to decline further in Western Europe.

Already, the graduate council sees encouraging signs in a slight turnaround in the number of people taking its Graduate Management Admission Test. About 133,000 tests were taken in the first eight months of 2005, 1.7% more than in the year-earlier period. The number of tests in America was down about 1%, while the number outside the US rose 7.6%.

But in surveying schools about their full-time programmes in 2005, the council found that only 20% reported an increase in applications. Both part-time and executive-MBA programmes, which allow students to continue working, fared better: Applications increased at 38% of executive-MBA programmes and 46% of part-time programmes.

"The balance is clearly tipping more to programmes that reduce the opportunity costs of going to business school," says Albert Niemi, dean of the Cox School of Business at Southern Methodist University. "It's easy to come out of school with $100,000 in debt from a full-time programme, so you've mortgaged your future for the next decade."

Since 1997, full-time MBA enrollment at the Cox School has fallen to 169 from 270, while part-time enrollment has grown to about 600 from 449, and executive-MBA candidates have risen to 168 from 115. Betting on that trend, the school recently completed construction of an $18.6 million executive-education center. SMU also may develop specialized master's degrees in finance and management for those students who don't aspire to be CEO and don't really need an MBA "Some people don't need a smorgasbord of courses and the full tool kit of management skills," says Dean Niemi. "Maybe they just want a good job in finance."

Cost is clearly one of the most significant challenges facing the full-time degree. Tuition increases continue to outpace the US inflation rate, and tuition rose briskly at major business schools even when jobs were harder to come by and MBA compensation slid.

Even though the MBA job market has improved considerably, many people still don't feel they can afford to quit secure positions and take on big student loans. Part-time and executive- MBA programmes seem to be better alternatives because not only can students keep working, but they also may qualify for some financial aid from their employers.

Tuition has been climbing 5% to 8% a year at many schools, with some two-year programmes now starting to break the $40,000-a-year mark: Stanford University MBAs will be paying $41,340 in tuition for the 2005-2006 school year, while the University of Pennsylvania's Wharton School is charging $40,458. Add other school expenses and housing costs, and the bill far exceeds $100,000.