CAMBRIDGE, Massachusetts (Reuters) - For decades, investment banking was a well-worn path to affluence for business-school graduates. But as Wall Street teeters, many are scrambling to find alternate routes into a brutal job market.
Facing one of the worst economic downturns since the Great Depression, some Masters of Business Administration students are lowering expectations. Aspiring investment bankers are looking elsewhere, while international students wonder if they will have better luck at home than in the United States.
As big banks including Citigroup Inc, Bank of America Corp and Goldman Sachs Group Inc cut tens of thousands of jobs, MBA students who just a few years ago would have been aggressively recruited by companies now expect to fight for the handful of positions available.
Meghan Gallery, 24, enrolled at the Massachusetts Institute of Technology's Sloan School of Management in September with hopes of working on mergers and acquisitions at an investment bank. Now, she would consider a summer job at a start-up company, ideally in corporate finance.
"I've literally had people say, 'Hopefully, when you get out it will be different. But if not, there will still be a lot of bodies floating around who have been in finance for five to 10 years more than you'," she said.
Shrinkant Dave, 26, an MBA candidate at Boston University who is originally from India, made a similar decision, accepting a corporate finance job at a retail chain rather than holding out for investment banking.
"I knew there were not enough jobs to go around, so I had to improvise," Dave said. "It's slightly disappointing, but not too bad. It's still in line with my goals."
MBA students face a radically changed job market.
U.S. employers in January cut payrolls by the most in 34 years, and President Barack Obama has called for a $500,000 cap on pay of chief executives of companies that receive federal bailout money. Wall Street has shed more than 19,000 jobs since the start of the financial crisis.
General Electric Co chief executive Jeff Immelt summed it up in a presentation in New York in early February: "Financial services ain't going to be the same in our lifetime."
Career counselors at MBA programs are urging students to be open-minded about the jobs they will accept and to pursue aggressively those that are available. While companies are still sending recruiters to campuses, they are not hiring as many people. MIT officials estimated that recruiters on its campus were offering 20 percent fewer positions this year.
Moreover, MBAs are not a rare breed. More than 150,000 MBA degrees were awarded in United States in the 2006 to 2007 academic year, according to government data.
"They have to be open" to different routes to getting a Wall Street job, said Diane Riemer, assistant director for graduate career services at Boston University's School of Management. Riemer said she advises MBA candidates to think about "bridge strategies," positions that could serve as stepping stones to get students toward their dream jobs.
In addition to considering a wider variety of jobs and industries, students said they are considering more geographic options -- like moving to emerging nations where multinationals and big local companies are still beefing up staff.
"People need to be a little more flexible," said Ignacio Diaz, 28, a native of Venezuela studying at MIT's Sloan School. "Not thinking only about moving to New York for finance, for example, but looking at other centers, like perhaps London, perhaps the Middle East or Asia."
Some students from outside the United States are considering whether they would be better off returning home, particularly those from still-growing economies like Brazil, China and India -- though growth there has slowed too.
"I was looking to do a lot of work in the U.S., but one of the suggestions I got was that this is the right opportunity to go and explore," said Anand Mohanrangan, 26, an MIT Sloan student also originally from India. "I am trying to see what are the opportunities I could have to go back to India."
A downside to moving to emerging markets could be lower pay, some students fear.
"People pay a lot of money to get here and the return on investment is higher here than if you go back," said Mahesh Konduru, 34, an Indian student at MIT's Sloan School in Cambridge, Massachusetts.
The programs are costly. Last year the typical full-time MBA candidate attending a school outside his or her home state paid $32,333 per year for tuition and fees, a number that's risen 25 percent over the past five years, according to the Association to Advance Collegiate Schools of Business.
That does not take into account books or living expenses, which many full-time students also take out loans to cover.
Compounding those concerns, many have taken on tens of thousands of dollars of debt to finance their educations.
"I am worried about it, more worried than I thought I'd be," said Matt Yosca, 32, in his final year at the MBA program at Babson College in Wellesley, Massachusetts.
Students who are using loans to cover living expenses said they are trying to cut back spending, just to minimize the amount of debt they will face after graduating.
"I'm trying not to spend too much from the loans," said David Spevick, 27, who is from Toronto and is now studying for his MBA at Boston University. He lives alone but will probably seek a roommate to save money.
Educators console students with the thought that the difficult economy will toughen them up and better prepare them for hard times later in their careers.
"There is no doubt that the students who are coming out today will be more wary of credit risks, more careful," said Andrew Lo, a professor at MIT's Sloan school, who spearheaded the school's launch of a finance track this year. "You learn nothing from success. You learn far more from failure."
Editing by Jason Szep and Philip Barbara