Adam Grant Believes The 2-Year MBA Should Die
Maria |
February 16, 2022

Adam Grant, arguably the most popular and influential professor at Wharton, dropped one of the most controversial topics of discussion when it comes to MBAs in a recent interview with PepsiCo’s former Chairman, Indra Nooyi.

Grant thinks traditional 2-year MBA programs should be replaced with one- and three-year programs. In this week’s episode of Business Casual hosted by Poets & Quants, Maria (ApplicantLab Founder), John (Poets & Quants), and Caroline (Fortuna Admissions) debate and respond to Grant’s idea. 

John goes as far as saying that this idea is Grant’s “worst idea ever” but Maria suggests that we should rethink what an MBA is all about, and tailor the MBA degree depending on a person’s goal. 

What do they ultimately conclude?  Listen to find out.

 

Episode Transcript

[00:00:07.390] – John

Hello, everyone. This is John Byrne with Poets and Quants. We’re here again with Business Casual, our weekly podcast with my co host Maria Wich Villa and Caroline Diarte Edwards. Caroline, as you all know all know, is the former head of admissions at INSEAD and the co founder of Fortuna Admissions, the MBA admissions consulting firm that we all know. And Maria is the founder of Applicant Lab. So if you want a kind of do it yourself guided tour to help you along on your journey to business school, that is the place to go. We have a fascinating and provocative issue to discuss today. Adam Grant, the superstar Wharton Professor who I would say arguably is the most famous, perhaps the most influential business school professor of his generation. He’s written best selling books. His classes are all over subscribe. He has podcast that is very popular, and he has social media that has tremendous amounts of followers. Well, I was listening to his podcast recently of an interview that he did with Andrew Nuri, the recently retired former chairman and CEO of PepsiCo. And during that conversation, he kind of put out their bomb. He said that basically in all his years at Wharton, he’s been trying to convince Wharton to drop its two year MBA program.

 

[00:01:38.100] – John

That’s right. Eliminate the two year program and in its place put a one year program and a three year program now being naturally provocative. I put a headline on my commentary, and the headline was Adam Grant’s Dumbest idea ever. Maria, do you agree?

 

[00:01:56.760] – Maria

I agree that your headline was an excellent one for grabbing attention. I don’t agree that it’s a dumb idea. I actually think there is a lot of merit to at least rethinking what is the MBA and changing it and tailoring it based upon someone’s goals for the degree. I don’t necessarily know that it’s either one year or it’s three years. I think there’s room for a two year in there as well. But I think he makes some really good points. So my understanding, I think one of the biggest reasons he is advocating this is that a lot of people you start the internship recruitment process a couple of months, if even that right. If you want to go into consulting or banking, they advise you to start preparing for those interviews in August before you even get to campus. And so you start preparing for these interviews and you take the internship and you do the internship. And if you hate the job now, you’re stuck because you go into your second year having to now figure out what you want to do after graduation. You don’t have the experience that an employer would know.

 

[00:03:04.960] – Maria

You don’t even know what it is you want to do, perhaps. And so I think that is a very valid point. I also think it’s in part because business schools spend so much effort trying to convince candidates that you can make a career change here’s a featured post on our blog about this person who made this career. But the truth is that making very dramatic career changes is very difficult. And so if somebody really does want to go from, say, being a software engineer to work in private equity, they’re going to need more than one internship to do that. So I agree with the idea that I think business schools should try to come up with more than one internship. I think a lot of people have informally started doing this, though. I think many students have informally on their own started crafting their summers to have two internships. And regarding his point about people not knowing what they want to do, I think the solution to that would be to have a really in depth I don’t think you need a whole extra year from business school to do that. But I do think that there is merit to having, prior to enrollment, an intensive six week, four week deep dive into psychological testing, taking the Career Leader online tool, which I am a huge fan of.

 

[00:04:22.560] – Maria

Maybe you spend a week in an investment bank and you spend a week at a consulting, make a list of maybe four things you think you might want to do and try to narrow it down. I think a lot of his criticisms are completely merited. I don’t necessarily think that the only way to address them thoughtfully requires an extra year of school.

 

[00:04:44.690] – John

Yeah, I guess my argument here is an MBA is a costly investment in money and time, and if you want to increase the cost of the program by 50%, far more numbers of people are going to be coming out with debt. Many already come out with debt, and often it’s six figure debt. You’re making the three year MBA, at least if there was no two year option, a less accessible degree. And if the problem is the fact that recruiters count on students so early, why don’t we solve that problem? Why don’t schools just stand up and say, hey, you can’t come here for the whole first semester? Sorry, you just can’t do it. And with Zoom and everything else today, you don’t have to come. You might be able to have an open cocktail hour on Zoom, and you may not be able to press the flesh and get to know the students as well as you’d like, but they need to be focused on their studies and figuring out what their true intellectual and professional interests are before you get your hands on. So his main point, as you pointed out, was career switchers.

 

[00:06:05.900] – John

Say they wish they could have an extra year to explore their intellectual professional interests and have that second internship. But you’re right. Many companies today actually have Premba internships. There’s a lot of experience and learning in these programs that, while not effectively an internship, give people the kind of work experience to talk about in their interviews. And then there is traditional summer internship, which, Maria, as you point out, some people are actually carving up and doing two instead of one. Now, Caroline, what do you think?

 

[00:06:39.790] – Caroline

Yeah, I agree that you do see different people have different needs.

 

[00:06:44.240] 

Right.

 

[00:06:44.540] – Caroline

And definitely I see more and more candidates tailoring their experience, for example, by doing Premier internships. I’ve seen a lot of successful candidates getting into the top schools who have done, for example, two years at McKinsey, and then they’ve done something else for a year. Right. They’ve tried something else before they go to business school. And I think that makes them more appealing to the top schools because they’ve got that greater breadth and depth of experience and just make some more interesting candidates for the classroom. So I think that it’s very difficult to have a one size fits all approach.

 

[00:07:23.780] 

Right.

 

[00:07:24.030] – Caroline

When you’ve got such a global candidate pool, people coming in actually at different ages. So someone who’s coming in at a very early stage in their career, two years, maybe a little bit short. Right. Whereas someone who is in the late 20s or around 30, the idea of taking two years out of their career is already prohibitive. So people have different options already. And I think what he says is very flattering to schools like in theater who do have the one year program. I think that some US schools are a bit stuck with a two year program. The model is designed around that. It would be very difficult for them to change. As you said, some other schools in North America have shifted towards one year options, but it’s pretty limited in the US, and it led the way with a one year program in Europe, and a lot of the European schools followed suit. And that has proven a very powerful model. And I think it’s difficult for the top US schools that have quite a heavy machine designed around those two years to change that.

 

[00:08:34.710] – John

And, of course, the big appeal of the one year MBA, Incidentally, is much lower cost and shorter in duration, so you can get on with your career more quickly. A two year Warton MBA now cost about $231,000 in tuition, fees and room and board. If you added the third year would come to about $350,000 for an MBA. I will also say that Wharton is not among the most generous schools in granting scholarships. So those numbers are very scary to begin with. Now, a Wharton one year MBA, that would probably be a good idea, frankly, particularly for people who already have an undergraduate business degree. That’s how Kellogg justifies its twelve month accelerated MBA. And Kellogg has had that one for more than 50 years on the market. They started in 65, not long after INSEAD launched the first one, because the other part of this proposal is really interesting, killing the two year MBA. The tried and true two year MBA. The first MBA ever delivered in the marketplace is by Harvard. And right from the beginning it was two years. And the structure of that two year experience makes a lot of sense. In the first year, you focus on the business basics, the foundations and marketing strategy, finance, accounting.

 

[00:09:58.200] – John

And then in the second year, you bring all of those disciplines together in a more integrated fashion, as well as doing a deep dive in at that point, an area of interest that probably you should be ready to tackle, whether it’s operations, finance, whatever. And that model has been tried and true. It works very well. I don’t see why anyone would want to kill a two year program now. Maria, you went to Harvard for two years. Can you imagine being there for three?

 

[00:10:31.890] – Maria

I mean, I loved Harvard. I would have loved for three years. I think most people who go to business school would love to have more time there.

 

[00:10:40.070] – John

And I totally agree with that. That is almost universal. And it speaks to the incredible experience a good MBA program is.

 

[00:10:47.040] – Maria

Yeah. I mean, look, I don’t think the two year MBA should be killed. I think he’s sort of maybe overstepping, maybe he’s trying to grab headlines with that kind of dramatic statement. But again, I agree with a lot of the points he’s making. Right. I think if you really are interested in a breadth of business topics, I think the two year program is great for most people, but I don’t think it is necessary. And I also think it is not ideal for other people. Now, just to quickly address the additional cost, maybe what you do is it could be a three year program, but that doesn’t mean it’s three full academic years of learning. It could be you alternate every other semester during those final two years with an internship coursework. Internship coursework. So if you’re doing it that way and that’s not what he said. But I’m just using I’m like, here’s what I would do. I wouldn’t ask, but here’s what I think I would maybe alternate like internship semester. Internship semester. And so that way you could probably get three little internships by the time you graduate. And by the way, you’d be making more money.

 

[00:11:53.870] – Maria

I don’t think that a lot of people would pursue this three year option if, say, they wanted to go into nonprofit management. Right. That would be something where, first of all, you already know that’s what you want to do in your heart. And so it’s unlikely that you’re going to change your goals. And also you might try to I would hope that this hypothetical school that would do this would be really upfront with people and sit down with them and say, like, look, honestly, if you’re going to be in the lower rung of compensation, just think about whether or not you want to do this third year. But yeah, I would have luck. I’d still be in business school.

 

[00:12:30.230] – John

It’s true. I’ve rarely met an MBA who said, wow, I’m glad this thing is over. Almost everyone has such an incredible experience that they wish they could hang on for a little bit more. But of course, they’re not thinking of the money and everything, all the other consequences of that. I think, Caroline, when you finished your program because you were at NCI for ten months, did you feel like you would like to hang around for another year?

 

[00:12:58.450] – Caroline

Yeah, it definitely goes faster than you think. I think whether it’s one year or two year, I mean, I did one year because I started January. I finished in December and I did internship in the summer. So if you start in January, it’s a twelve month program. I didn’t see it, but it does go very fast. I can remember January 2004, I kind of felt like I jumped off a speeding train and was kind of shellshocked a little while it was all over because you’ve really missed that incredible group of people and that intense experience. And going back to normal life is a bit disappointing, quite frankly, even though, having said that, my first week of work was a training program at a beach hotel in Bali because I had joined the World Bank Group in Indonesia. So it wasn’t too rough. But I have to say I was really missing in the experience.

 

[00:13:50.030] – John

Yeah. And coincidentally, here we also published this past week our competent ranking of the best international programs. INSEAD, for the 6th time in a row, was number one. But what’s interesting about the list is the program length of the top ten programs along with the cost. And NCI is now about $104,000 for its program, comparatively, because of the two year span of the NBA in the US, top 25 MBA in the US is just under $200,000 in cost. Tuition on the least expensive end. Among the top ten is Warwick Business School twelve month program, $52,000. Oxford is at 75. Cambridge is at 70. London Business School is the highest price because they have a program that’s 15 to 21 months, and that’s a little over $111,000 IMD is at IESE in Barcelona, is about 107, considerably cheaper than US programs and great brands. So my question is for people who are not constrained by geography and could take their MBA anywhere, what is the case for a European MBA? Caroline, let’s start with you.

 

[00:15:29.490] – Maria

Well, first of all.

 

[00:15:30.280] – Caroline

I would say if you don’t see it, it’s not a European school. Right, because it’s a truly an international school. The Singapore campus is completely equal with the Font and Blow campus. In fact, some people study it never go to Europe. Right, because you can do the entire program in Singapore. It’s also the Abu Dhabi campus with the EMBA and some of the MBA’s go there as well. So it is truly a global program. Having said that, if you go to London Business school or a lot of the other European based schools, you will also have a very international cohort, a really global cohort. And so I think it just adds additional dimension to your learning, which you can’t get in a classroom of people who have all come from quite a similar country and culture. And it’s a very challenging environment to teach in. I’ve talked to professors who’ve taught both at INSEAD and at some of the top US schools. And INSEAD has the exchange with Water. And professors teach at both schools sometimes. And they talk about how the INSEAD  classroom is particularly tough for the faculty because you have people with such radically different perspectives on things.

 

[00:16:44.660] – Caroline

And it’s definitely an environment where there’s just a lot of different dynamics going on, and that makes it a remarkably rich learning environment as a student. So for anyone who’s looking to work across borders and really get a global springboard for your future career, I think it’s a great option to have and something people should seriously consider. Having said that, if you’re from the US and you’re thinking about basing yourself in the US for the rest of your career, I think you should go to top US school if you can, because your network is going to be mostly based in the US. If you go to a top US score, it’s important to think about where your network is going to be in the future. So the inside network is incredibly powerful if you’re moving around the world. My husband went to Stanford, I went to INSEAD. We’ve moved around to different countries. And honestly, he’s tapped in more to my network outside of the US than he’s tapped into Stanford network because Stanford is an incredible school, but it’s a very small program, and most people stay in the US, stay in the Bay Area.

 

[00:18:00.200] – Caroline

Right. So if you’re moving around internationally, schools like that don’t have the most powerful network. But if you want to stay in the US and this is your focus, I think the best option is going to a top US school. So it’s very important, I think, to consider where your network is based and where will be what geography is most relevant for you in the future.

 

[00:18:27.070] – John

Maria, you agree?

 

[00:18:29.290] – Maria

Yeah, absolutely. I will say that in favor of doing an international program. I think the world is only getting smaller. I realize that COVID has made international travel less common, but we are still increasingly working in general, anyone in business is increasingly working with people all over the world. And so I definitely think that there is something to be said. It’s one thing to read an article about, like, oh, I remember before I moved to Hong Kong, I was trying to find these articles. I’m like how to Do Business with People in China. Those articles taught me a few useful things, like, oh, you hold out your business card with two hands but there’s really no replacement for actually experiencing it and so I think that given the increasing globalization of pretty much every industry there is a lot of merit to getting that international experience and even the most global US school is not global by any measure against many of these schools.

 

[00:19:26.990] – John

I mean, at HEC Paris, for example, the latest incoming cohort, only 5% of that class is from France so the mix of cultures and backgrounds and geographies is really.

 

[00:19:42.990] – Caroline

Truly deep I would also add to that a lot of the US schools when they’re reporting the international population a lot of those people are dual passport holders, right? So they’re US plus something else and they’ve spent a lot of their life in the US or they’re green card holders and they are citizens of another country but they were in the US before they went to business school so their exposure may not be as truly international as it appears when you look at the class statistics right?

 

[00:20:19.220] – John

Exactly. You have no regrets having gone to INSEAD, I’m sure absolutely not. Maria has no regrets about going to Harvard, right?

 

[00:20:29.170] – Maria

No. I wish if INSEAD had been a two year program I might have gone there because I had such an international career prior and I loved being international and life has not led me to be international right now but as soon as my kid goes away to College, I am hoping to be international again so it was just more like the duration I was like, man, I don’t know, I need more time at school and I would have loved to jump between France and Singapore and Singapore and France oh, gosh, it must have been incredible.

 

[00:21:01.510] – John

Absolutely. Well, for all of you out there who have an interest in maybe doing a European or other kind of international degree, take a look at our ranking lots of information there for you to see. Maybe schools that you may be less familiar with that you should become more familiar with. And if you have a view on Adam Grant’s proposal to do away with the two year MBA and replace it with the one and the three, we’d love to hear from you too. Meantime, Maria, Caroline, thank you so much this is John Byrne with Poets and Quants you’ve been listening to Business Casual.

 

Business School News | General | P&Q Podcast "Business Casual"
Adam Grant Believes The 2-Year MBA Should Die
Maria |
February 16, 2022

Full Episode Transcript:

John Byrne: [00:00:00] Hello everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast. We want to talk about international students. Schools are now reporting that a good number of their international recruits who were admitted to programs this fall haven’t been able to show up or have changed their mind.

At the University of Illinois, the school, the Gies College of Businesses, lost about 200 international students in its Master of Finance and Master of Business Analytics programs causing a $7 million hit. To their budget at UC Davis Graduate School of Management, 40 students didn’t show up who were admitted, and that’s resulting in two and a half to $3 million hit on their budget this year.

Both of these things have occurred before the announcement of a hundred thousand dollars tax on H one B Visa. Which will make it more difficult for many employers [00:01:00] to hire international students and keep them in the US for an extended period of time. And we’re getting the new class reports of the, of the new cohorts of students who’ve arrived on campus in the fall of this year.

And Carnegie Mellon is. Down 30% for their international cohort over the past two years. UCLA Anderson School is down 25% over the past two years, and schools are preparing for the worst because of the H one B Visa decision which could affect future employment. Caroline and Maria, my cohosts are in the market helping people get into the best schools in the world.

And Caroline, what do you think?

Caroline Diarte-Edwards: Yeah, definitely seeing concern among international candidates and people holding off on applying for the US schools. So it’s really a shame. I think the international schools, particularly the schools like Inea and London Business School and the other top.[00:02:00]

International European programs will benefit, they’ll get talent that might otherwise have come to the us, which is great for those schools. And I’m very fond of those schools, but it is sad as from the US perspective for sure. On the other hand, you could also take the perspective that.

If you do have options for your career post MBA that don’t require that you absolutely have to stay in the US as an international candidate, then now could be a very good time to apply, right? Because definitely application volume will be down and schools will be perhaps. More open to candidates that might otherwise have been waitlisted or rejected in the past.

For some candidates, this is actually a fantastic opportunity to get into a top school, but from, for, at least from the school’s perspective, it is a shame because, I’ve experienced firsthand the value of a very internationally diverse classroom and the value that brings with a [00:03:00] diversity of perspectives that enriches the learning experience so much for everybody.

Enriches the debate and bring so much to the academic experience as well as the the network and the social experience. So it’s everybody’s loss, right?

John Byrne: Very true.

Caroline Diarte-Edwards: And I think it’s a very myopic perspective that the US government takes that. There needs to be a more of a refocus at US educational institutions on the domestic market because those international applicants bring a lot to the domestic students in enriching their learning and enriching their network.

Of course bring a huge value to the US economy when they stay. So there are very impressive statistics on the value of immigrants to the US economy. So Indian immigrants, for example, are only about one and a half percent of the US population, but they have founded to date about 8% of all the tech startups in the us.[00:04:00]

And for sure some of that top talent from India will now not come to the us. They will go to perhaps they will stay at the great schools that we’ve talked about in India, or they will go to other international schools. So for sure it will be a loss to the us learning experience and to the US economy.

John Byrne: Maria, you run applicant lab which is a platform that helps applicants get into highly selective schools. And many of the people who use your product are international students. What are you seeing?

Maria Wich-Vila: Everything Caroline is saying concern is think a delicate way to put it.

And I think it’s because as the more affordable provider in the market, I tend to get the applicants who maybe they don’t have the family business to fall back on. Maybe they don’t have, large sources of income elsewhere in their lives. And so I think the concern is very real and very merited, right?

I can’t. In good faith, tell someone, if they [00:05:00] really start, sit down and do the math and start to do, run the numbers, if they just assume that things are going to stay as is. And this is the big caveat that I’m, I want to get to in a second, but if we assume that things stay as is and if someone really is from a lower income tier from Nepal or India or some of the other countries that I work with, yeah, maybe sit down and do that math and think about, okay, if I do have to come back to Nepal afterwards, how will I pay back that loan? There, there is though some good news. Even if we assume that things stay status quo, which I hope, and I’m pretty, I’m I think it’s, I’m cautiously optimistic that they won’t.

But there are other markets as well. So I’ve had a lot of candidates, or former clients, I should say, graduate from business school, not be able to get jobs in certain in countries and then. Being able to move to Dubai. Dubai for some reason, has started attracting a ton of candidates, primarily from South Asia but from other parts of the world who might be having trouble getting some of those work permits.

You could do worse than live in, Dubai’s not perfect, but [00:06:00] you could also do worse than live in Dubai, right? The salaries are pretty high. The standard of living, if you have a white collar job there is, it’s not the worst outcome. So it’s not I can’t stay in the us. That’s it.

There’s no other it’s not a binary of, it’s either the US or it’s nothing. And then I think the second point is I, we’ve just seen. So many things, let’s take something from a different facet of policy. The tariffs, right? The tariffs were announced and the markets went crazy, and in the months that have followed, oh, actually, here’s the tariff, but this one company, their products aren’t gonna be subject to the tariff.

And then there’s this other company that maybe they’re not gonna have to pay the same tariff. And I can’t help but wonder if some of these. Some of these very large companies that are getting tariff exemptions, their ability to lobby for. The H one B, maybe lowering of the H one B fee. If they’ve been able to successfully lobby tariffs, they might be success, able to successfully lobby against these, true, these [00:07:00] visa fees.

And a lot of these big companies, these big tech companies are in fact some of the largest employers of post MBA talent in the us. So I am cautiously optimistic that. This could be, hopefully right now it’s the big, the flash and storm and the, the making, the big splash, right?

Everything’s about showmanship and making the big splash. And maybe in the aftermath of the storm, that initial PR media storm, maybe the reality will start to calm down a little bit. Yeah, the other good news is that if you’re applying now, that means you would enroll in 2026. You would, if it, if you’re talking about the US two year program, you would graduate in 2028.

At that point, who knows what might happen. I like to think that what we have seen so far in terms of the Visa policies, hopefully. Roughly the floor about as bad as it can get. I think if they start implementing a similar thing to OPT, that could be the same thing. But if we just assume that okay, right now what’s been announced is that these foreign students all have to do, you can’t stay here, you have to [00:08:00] go someplace else.

It, we assume that’s like the initial negotiating position. It’s just gonna chip, it’s just gonna get, it’s got nowhere else to go. It’s even worse. So we’ve, we now have two and a half years roughly until. People applying now would have to really implement, or be really affected by this in a.

In a pragmatic and tangible way. And so that’s why I’m hoping that the little chipping away and the chipping away things will start to get a little bit better and a little bit better and a little bit better like we’ve seen with other facets of policy. Didn’t like a bunch of the CDC employees that were all fired under Doge didn’t more than half of them I think were recently rehired.

Yes. Back again true. Whatever you think of the policy, it seems like some of the policies are. Being slowly walked back. And so I think if you. If you’ve got an adventurous spirit, I, and by the way, if you apply now, sorry. I know I keep going, but I like, if you apply now, let’s say you get accepted, you don’t have to show up until August of 2026.

So that will give you [00:09:00] time, like definitely. Apply now and see what happens between now and August of 2026 to make the decision to not apply now, because you’re rightfully scared. I’m not blaming anyone, but to not apply now, maybe by maybe six months from now he’ll be like, ha, just kidding. I’m doubling the number of H one Bs.

Yeah, we have no idea what’s gonna happen. So things are So give yourself that optionality.

John Byrne: Yeah. And things are so uncertain that could very well happen because, one day at tariffs are on one country the next day they’re not one day they’re pausing the ab the interviews for student visas, the.

Say they’re not there’s litigation all over the place, challenging many of the presidential actions that have been taken that have put them in limbo despite all the headlines. So it’s, it, there’s more uncertainty than there is certainty about any of these things. And as you point out, you, if you [00:10:00] did apply this year, the odds are gonna be in your favor if you’re an international student, frankly, because there is no question.

That international applicant volume will be down at all the top schools in the us, which means that to maintain some semblance of a global class. Admission directors are going to have to dig a little bit deeper into their international applicant pools to select candidates. In a way, if you play the long term and in the BA, in, in many graduate degrees or long term bet, I think you’re gonna be.

Oddly better off. And it may even be that the schools will really even go out of their way to help international students in ways that they haven’t in the past because of these actions in Washington. And what do I mean by that? Just a more welcoming reception than the already welcoming reception you would get hiring immigration lawyers and people that can help you.

If in fact there is a [00:11:00] challenge of one kind or another. I think the takeaway is not to be discouraged and throw up your hands to say, ah, I always dreamed of coming to the United States and getting an MBA or a graduate degree in business. Use this as an opportunity to actually increase your odds of getting into a better school with the understanding that when you get out there, probably most likely be an administration change and a change in these policies if they even get completely adopted as Maria points out.

Wouldn’t you think that’s the best strategy, Caroline?

Caroline Diarte-Edwards: Yes, I agree. I think that it’s good to take a longer term perspective because it is such a long timeline, right? If you’re applying to a top two year program as you say, you’re gonna be coming out of the program at the end of the Trump presidency and things may look very different.

And Maria rightly points out that. Everything is very volatile, right? So one thing gets announced and the next week it [00:12:00] gets rolled back, right? They’ve done so many things where they’ve realized, oh, actually that was a really bad idea after all. So

They’ve changed things. So things may not it might, may not turn out to be as bad as we fear.

And then I would also encourage candidates. To apply to the US schools, but why not hedge your bets and apply to an international program as well? Agreed in a time of uncertainty. As Maria said, create options for yourself. And so I would encourage candidates to apply to the top US programs, but also apply to top international programs as well and see what offers you get.

And then you can make a decision. As Maria said, it will be closer to the time when you would be starting the program and there may be more clarity about the situation in the US and what your options are in international markets as well. So I think that given the current circumstances, a good strategy is to hedge your bets and apply more widely than you might [00:13:00] have otherwise done.

John Byrne: Plan Bs are good. Let me just say business schools in the US have for years advised international students that those should have a plan B in the event that they can’t get with a US company. The other thing to, to keep in mind incidentally, in terms of MBA employment is that most of the companies.

That basically employ the lion’s share of MBAs are all global concerns. So you can be hired here and if there’s any challenge in getting you employed here in the us you can simply start in an office outside the United States with a hope of coming back when things clear up. So that is also another important thing to keep in mind.

And I’ll just say this. Despite whatever messaging you’re reading in your local newspapers or on your streaming platforms or television stations about how immigrants may not be welcome in the us that’s not true at all. Universities are diverse places. Welcoming. [00:14:00] Embracing loving the diversity of their students and particularly those from different cultures and backgrounds that enrich the educational experience.

There is no Dean that I’ve ever encountered who said they want fewer international students. It’s the exact opposite. They’re putting out message after message, telling people that they’re still welcome and wanted. Needed in the classroom. Now, Maria, in the past we’ve seen applicants who try to say, okay, can I time my application and my enrollment in a program to what I think might be the next recession?

And we know that in recessions applications go way. In part because some people lose the opportunity to gain advancement in a recession. Some people get unemployed. Some people just realize, hey, a recession is a good time to take a time out and get a new educational credential, which may allow me to do things I otherwise can’t do.[00:15:00]

But it’s almost impossible to time a recession and I’m imagining it’s impossible to time what’s going on here now.

Maria Wich-Vila: Yeah. I mean if we could all time, when everyone’s been talking about a stock market crash that to, not to bring another disparate topic in, but like everyone’s been talking about, it’s a bubble.

It’s a bubble. I’ve been hearing ’cause a bubble for a year and a half. True. Yeah, you can’t time or ask, for example, ask the people who enrolled in business school, like who got into business school in 2020. Like there’s always gonna be these external shocks. We can try to predict a recession, but who knows if it’s going to happen?

Who knows if there’s going to be some sort of virus or the opposite of a virus. Maybe there’ll be a virus that helps us all live healthily forever. Who knows? There’s so much uncertainty out there that who knows what to do. So I think. I think yeah, have that optionality. I think go ahead and apply.

Now if there is a recession though, which everyone seems to think is coming at some point, at that point, it’s going to be harder to get accepted. And as Caroline has pointed out, so rightfully, if other international, high quality international students are [00:16:00] spooked by the current H one B talk, now is your chance.

International candidate. Jump in there, shoot your shot like you might be able to get into a school, assuming of course that you’re qualified, but. You might have a lot less competition now than you normally will, so this could be a golden opportunity for you. And one final as one thing that I wanted to point out was that I was thinking, okay, Maria, let’s say that, you just said that maybe there’s gonna be walk back of some of these and there’s gonna be, maybe he’s gonna change.

But even if there isn’t a change, right? Let’s think about this. The companies themselves are gonna have, and you started to alluded to this John, when you mentioned that a lot of them are global concerns. They’re gonna have now a two year window in which to say. Okay. We know that we’re not gonna keep these people in the states, so let’s open a huge office in Vancouver.

Let’s open a brand, an enormous new office in Toronto. Whatever that is. Because I was thinking back to over the summer when it looked like maybe a bunch of international students wouldn’t be able to get any student visa at all. And I know that some of the business schools we’re looking [00:17:00] at, do we rent out some space in Toronto and do Zoom classes?

We do a hybrid. What we did during COVID. I’ve heard that. I think Rice, I was actually having dinner last night with a dear friend who was, say he’s from Texas and he was saying that Rice has some sort of a campus in Paris and that they are leaning really heavily on their global campuses around the world to still be able to service these students who had gotten accepted.

So things like that, like if. Even if our sort of my very cautious and perhaps irrational optimism turns out to not be true, let’s say the things get, the OPT is banished and all, everyone is banished and it’s the worst case scenario. Again, there’s gonna be two and a half years for these companies. To quickly find, okay, fine, we’re gonna open up an office in Mexico City and we’re gonna pay people really well and we’re gonna what?

Whatever that is. ’cause they’re, the companies are still gonna want the talent, right? Just because the political administration doesn’t want the global talent in the country. That doesn’t mean that the country’s employers don’t want that talent. They [00:18:00] want that talent, they want that intellect, they want that energy and that drive to make their companies better and to make more money.

So they have a very strong incentive to not only be lobbying for these. Visa changes to go away, but if they don’t go away, they have a very strong incentive to come up with some way to provide, to provide those incomes and to provide those perks and some sort of a compromise type of situation.

So again I think if you’re applying now, if you’re going in with eyes wide open, shoot your shot. That’s my, I would absolutely tell people to to try that.

John Byrne: Yeah, I totally agree. And, generally this is my rule of thumb and Maria and Caroline, you may or may not agree with this, at the top MBA programs, they’re so selective that the people who apply to them generally are very self-selecting group.

So I always say that roughly 80% of the school’s applicant pool. Is qualified to actually get accepted, get in, do [00:19:00] well, and land a good job. And yet we know that at Stanford, the acceptance rate is 6%, that Harvard is 12 Wharton and Columbia is, a little under 20 or so. So there are a lot of really good candidates who aren’t getting in.

Which leads me to this, if you’re an international student who thinks okay, so these US schools just might dip a little more into the domestic pool to make up for the offset of international candidates. As it turns out, there is a little notice. Clause in the big beautiful tax bill that was passed here under Trump that places severe limits on federal loans for graduate students.

Now, the current grad plus loan program allows students to borrow up to the cost of their graduate programs. That comes to an end in July of next year. After that, grad students borrowing will literally be capped at [00:20:00] 20,500 bucks a year with a lifetime graduate school loan limit of a hundred thousand. That’s a big deal because, at the top MBA programs it’s not on typical.

For a student to borrow over a hundred thousand dollars easily. And so these caps are also going to affect domestic enrollment. So again, that, that contributes to your ability as an international candidate to get in both. The likely decline in competition not only from internationals but also from domestic students here, interestingly enough, that Bill, which passed has different limits for a professional graduate degree, but the bill basically says that only med school and law school qualify as professional degrees and not business school.

That’s another wacky thing that’s happened that will affect. Domestic enrollment as well. So I, I side with Maria and [00:21:00] Caroline to me the advice is, look long term. Don’t be affected overly affected by the change in policies in the US or the climate here. Understand that if you apply now and you matriculate next year and you graduate in two years after that you’re gonna be facing probably a very different environment.

Also understand the odds are in your in your favor, in getting into a highly selective, really good program in this coming year. And know that, while people too often calculate the value of an MBA based on short term variables, like what’s my starting salary gonna be? What is my sign-on bonus?

The truth is the MBA has enduring value over your lifetime. So it rewards you over your entire career and not just for the first or second years. And you can’t go wrong by graduating into a network of helpful and supportive people from a great school and [00:22:00] receiving a great education. So I think bottom line, we’re telling you apply.

Don’t get convinced by your colleagues or anyone else that this is a bad time to come to the us. Opportunity. Some of the best opportunity come comes when people perceive there to be significant challenges. And I think this is really true with business school. We hope we convinced you to come and try and hedge your batts too, as Caroline noted.

I think that’s really super important to have a plan B when you apply and toss a bunch of apps to the European schools which have excellent superb world class MBA programs and real international cohorts. 90% of the students not from the countries where the schools reside. Toss a bunch of them in your mix for your target schools to give you these different options at the end of the day.

This is John Byrne with Poets and Quants. Thanks for listening.

Maria

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