Already In Six-Figures? Is An MBA Smart?
Maria |
August 14, 2024

In this episode of Business Casual, hosts John Byrne and Maria Wich-Vila, joined by Caroline Diarte Edwards fresh from vacation, discuss why high-earners pursue MBAs despite substantial salaries. They explore the value of an MBA beyond immediate financial returns, highlighting long-term career development and satisfaction. Maria points out that the decision to pursue an MBA should be based on career vision spanning decades, not just the immediate financial outlook.

 

The hosts emphasize the MBA’s intangible benefits like career flexibility, global opportunities, and a supportive network, which can pivot careers and enhance life trajectories, underscoring that an MBA offers much more than just a financial return.

Episode Transcript

[00:00:04.370] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co-host, Caroline Diarte Edwards, back from a very vigorous vacation. You should have seen the photos she posted, especially of her on the zip line. Then, a problem for me is trying to face that many MBA applicants apply when they push a submit button at Harvard or Stanford. And of course, Maria Wich Vila. Maria is the founder of Application Lab, where you can go in and get a heck of a lot of advice on how to apply and navigate the mysterious route to a great business school. And Caroline, of course, is a co founder of Fortuna Admissions, one of the leading MBA admissions firms in the business. We want to talk about how much people make before they get an MBA, you would think naturally that someone in their mid-20s wouldn’t be well into the six figures and then decide to go and get an MBA and forego that compensation for two years while they’re in an MBA program. Yet there are 10 US business schools where the average pre-MBA pay is in six figures solidly. At the top of the list, no surprise, it’s Stanford.

[00:01:29.670] – John

Stanford Harvard MBAs left salaries that paid them $124,000 on average. At Harvard, it was 121. At Wharton, it’s 116. Chicago Booth, 113. Kellogg, 110. Dartmouth Tuck, 109. Columbia, 108. Berkeley, 108. MIT Sloan, 106. And then UT Austin, McCombs, 100 even. Then there are a bunch of schools, You included UCLA, Virginia, and Cornell, and NYU Stern that are knocking at the door of this six-figure salary. Does it make sense for someone who’s in their mid-20s and earning 120 grand to forego two years of that and gamble on an MBA? Maria, what do you think?

[00:02:21.140] – Maria

I think that there’s no blanket answer for every single person on Earth. I think there are some people for whom it makes a ton of sense, and then there are some people for whom it doesn’t. I think this is why the business schools do ask for a certain level of introspection. Many of them do ask flat out. The most common essay question across every school is essentially, why are you applying? What’s the point of you doing this degree? There are lots of reasons why they asked that, but one of them actually is like, okay, if you are going to give up these two years of salary, usually two years or one year of salary, and realize that you might not have that immediate ROI, are you still in because you realize that your career is a marathon and not a sprint. While it’s true that perhaps one might look at the pre-MBA salaries at some of the Stanford and Harvard’s and Whartons of the world, and then the post-MBA salaries and say, Wow, there actually was not that huge of a jump, maybe this isn’t worth it. If that’s the mindset that somebody has, that’s great.

[00:03:21.130] – Maria

But then those folks shouldn’t be applying for the MBA in the first place. It comes down to looking at your career over the next, not the next two years, but the in the next 30 years and asking yourself, are the various resources and benefits I’m going to get from the MBA worth it to me? So clearly, I think I can speak for all three of us that all three of us do believe that it is clearly worth it in the long run. But I also acknowledge that for some people it might not be. And that’s great. Those folks don’t have to apply. But I think when people do apply, they are looking at a more holistic view of what they want the rest of their careers to look like. And from that perspective, it is worth it.

[00:03:59.630] – John

And I I wonder if there’s an upper limit on this. I mean, if you are lucky enough and successful enough to work, particularly in a hedge fund, a private equity firm, a venture capital firm, you could be earning well over a quarter of a million dollars, even closer to a half million. Does it still make sense? And to me, it’s no surprise that many of those candidates, when they do apply to business school, they tend to say it’s got to be Harvard, Stanford, or Bust. But what is What do you think the upper limit is on what you should be earning before you even think about getting an MBA?

[00:04:34.960] – Caroline

Well, I don’t think there is an upper limit. And we sometimes work with candidates who have salaries in the range that you just mentioned. And they’re taking a long term view, as Maria said. The MBA is about, first of all, it’s about a lot more than the money, right? It gives you a lot of options in your career that you might not have, even if you’re earning a lot of money, right? It’s nice to have the option that you can change career, that you can move country, that you have this network that is there to support you, that can help you through the twists and turns of life in the future. And so I think the MBA has a lot of value beyond just the pure financial value for that. I think that also MBA graduates feel more comfortable taking a risk in their career because they know that they have the ability to land on their feet if things go pair-shaped. For example, if they join a startup or they start their own company, it doesn’t work out as many startups don’t. So they feel more comfortable and confident in doing that because they know that they have options if things don’t work out.

[00:05:39.580] – Caroline

So I think that there’s huge value in that, and that is hard to to identify. I think the MBA graduates are often more satisfied in their careers, partly because they have options and therefore are able to make choices which they might not otherwise be able to make and pursue a career that is really rewarding for them and be able to change careers if they decide that they want to do something different and they have the opportunity to do that. And so I think, generally, MBA graduates are, on average, more satisfied in their careers than people who haven’t done the MBA. So there’s a lot of intangible benefits that you can’t quantify. And I think that students or candidates who are applying who earn a lot of money and still want to be at the MBA, they understand that. And as Maria said, they’re in for the long game.

[00:06:31.310] – John

Maria, I’m sure you’ve worked with clients as well who are making lots of money and decided, You know what? I still want that MBA.

[00:06:38.550] – Maria

Yeah. This is where I think that this laser-like focus only on the financial ROI might be a bit misguided, because some of the people that I’ve worked with who are making $400, $500, $500, $1,000 a year, some of them actually, they’re so successful that they feel trapped in the route and the path that they’re on. And so some of them actually want the MBA pivot, fully understanding that they will make less money when they graduate, however, being okay with that trade-off because they are just so unhappy in the current field that they’re in. So one person that comes to mind is someone who was a mergers and acquisitions lawyer, making half a million dollars a year, top tier, whatever one of the number one firms was in the US, Crevath or one of those guys. And so you’d think, Well, this person has it all figured out. But they were saying, Look, I’m just exhausted from this work. I fell into it. And now that I’ve doing it for five years, when I try to get another job, the only other job I can get is perhaps an investment banking, maybe. I don’t want that job.

[00:07:37.990] – Maria

I wanted to switch to something totally different. I think there’s an element of this golden handcuffs idea where some of the very high earners… Look, if you’re working in private equity and you want to continue in private equity, an MBA makes a lot of sense because you’re going to get that broader business viewpoint that will then help make you a better investor and a better operator. You’ll be able to add more value on your portfolio company boards or whatever in the future. But there are also some very high earners who just are… They’re making a lot of money, but that doesn’t mean they’re happy. I think this goes to Caroline’s point about career satisfaction more so than just the money. It’s funny. It’s August right now, and I just got an email a couple of days ago from someone who said, Look, I showed up to my business school’s orientation. We’re underway. I came into this thinking that I wanted to do management consulting. All the management consultants, maybe not literally all of them, but so many of them that I’ve talked to have all said, Well, here’s what this means on a pragmatic level.

[00:08:35.550] – Maria

You’re not going to get… You’re going to work really hard. You’re not necessarily going to get this work-life balance that you might already have. There are a lot of trade-offs that come with those high salaries. And so now this person is like, Well, the good news is I figured this out now. The bad news is now I’m scrambling for what I want to recruit for when recruiting starts in a month or two. But the point is, it’s not necessarily about just the financial return. I think that maybe some of these folks who are the very high earners coming in, they may continue on that path. But some of them are actually using the MBA to pivot to something that gives them more personal career satisfaction and not necessarily just that paycheck number.

[00:09:12.330] – John

So true. The more money you make, the less you have to borrow. Because the other side of this equation here is people who haven’t made a lot of money and apply to business goals often are reliant on scholarship support, or they have to go to a bank and borrow every dollar of the tuition plus money for his spending and living expenses. If you were making a quarter of a million or more, hopefully you banked a lot of it and you probably don’t have to borrow anything, which also changes that part of the equation. Now, Caroline, this is a US-centric model. The data comes from Bloomberg’s MBA ROI calculator, and it’s based on survey data of alums because this data isn’t readily available. Schools do not disclose it. But I’m wondering, do you think like NCI and London Business School in particular are drawing people with six-figure plus salaries? I would imagine so.

[00:10:11.520] – Caroline

Yeah, they certainly have students who are coming in, who are earning in that range. The average is probably a bit lower than the top US schools because of the geographic diversity of the student pool. I think that plays into, for example, the numbers that we see there for Stanford. I think a lot of those students are, well, first of all, they’re working in industries like many of them, private equity, venture capital, and so on, where they’re earning big salaries. And a fair number of them will be in California, in the Bay Area, or in New York. And so they’re coming from geographies where the cost of living is very, very high, where schools like INSEAD and London Business School are drawing people from all over the world, including emerging economies and substantial representation from countries countries where candidates don’t have the same earning power, and the cost of living is much lower, right? So that average would definitely be a bit lower for INSEAD and London Business School. But the school sees a tremendous range, right? They see candidates who are earning far less than this and people who are earning in this $150, $200, $1,000 plus range as well.

[00:11:25.910] – Caroline

So there’s definitely a huge range there.

[00:11:29.090] – John

Okay. I wonder if This is also an interesting data point for admissions and a data point that could be as valuable, if not more valuable, than a GMAT score or an undergraduate GPA. Here’s why. Obviously, if you’re making six figures, you got to be pretty successful. It’s like independent verification that an organization or a company finds you worth that money. Therefore, isn’t it even a better filter than a GMAT score where you can simply hire a tutor, where you can spend months and months studying for the test and get a higher grade, or even an undergraduate score from a university that may have great inflation? Is that actual pre-MBA number very valuable to an admissions officer? Maria?

[00:12:14.400] – Maria

I think it is, although I would hesitate to say that it is a key metric necessarily in determining the admissions decision. I think for me, when I’m looking at people’s applications, I like to see the trajectory upwards, perhaps more than a raw number. If someone’s been at a company, say for several years, some companies might give a promotion every two years like clockwork, some companies might not. But even if the title hasn’t changed, I can see in the compensation levels, if that has changed, Then regardless of whether or not the title has changed, to your point, it’s not the only way that a company can show that they value certain young talent, but it is certainly a very concrete metric. Here’s a company that is literally putting its money where its mouth is. When the recommender says, This young person one of the most talented people at the analyst level that I’ve ever worked with, that’s great. Of course, it’s believable regardless of who’s writing it. But wow, when the numbers back that up, it certainly helps that argument. Now, I do want to caution people that if you are making less than the figures in this average don’t feel like, Oh, there’s no chance for me to get in.

[00:13:19.530] – Maria

First of all, we don’t entirely know how they collected this based on surveys, so there might be some self-reporting bias in there. We don’t really Then second of all, it is an average. If a school’s average is $100,000 a year prior to business school, that could be several people who are making $50, $60, $70,000 a year, and then a few people making $500,000 a year. Those averages, I just don’t want anyone to get necessarily discouraged. But I do think that looking at that number, it certainly makes me feel more comfortable that a company already values you. You might have already saved up enough money. You might have at least started saving money to pay for the degree. I also I also think it’s useful if there’s a company that a lot of people are applying from and they all have very similar titles, it might be a way to say, Okay, well, for whatever reason, maybe this company has a certain rules with who gets what title at what point in their career. But if one person is making significantly more money in the same job, it certainly does. Again, I don’t think it’s like, Boom, slam, dunk, you’re accepted.

[00:14:24.070] – Maria

But I definitely think it’s an interesting data point that is considered.

[00:14:27.920] – John

It should be pointed out that the The average salary in the US for someone who’s between 25 and 34 is $53,000 a year. If you’re making six figures in your mid-20s, you’re doing really well. There’s no doubt about it. Now, there’s some weird things about this data, and I’ll give you one of them. The average at Vanderbilt is higher than the average at Yale by about 1,800 bucks. I wonder why that might be so. Caroline, you have some thoughts about that?

[00:15:07.670] – Caroline

Yeah. Well, I think it’s the composition of the classroom and the diversity of the students. So Yale, SOM, tends to have more students coming from the nonprofit sector, and so they would naturally earn less money. And just to add to what Maria was saying just now, I absolutely agree that schools look at the salary evolution can be a proxy for career evolution, right? And sometimes it’s difficult for schools to understand whether someone has progressed in their career. I certainly remember when I was evaluating applications at INSEAD and you’re looking at people coming from all different career backgrounds from many, many different countries, right? A hundred plus different countries. It could be very difficult to understand whether someone in a particular career, a particular country, has progressed rapidly or not. Sometimes Sometimes that salary data can be very useful as a proxy to understand if they are progressing and they’re progressing rapidly. But as Maria said, it’s just one data point, and candidates who are not earning in that range should not be concerned. Also Because if you did only select for salary, it would be quite a boring classroom, right? You’d have a classroom full of investment bankers, private equity types.

[00:16:28.690] – Caroline

It would be It would be rather dull for everybody concerned. So schools are, of course, looking for a lot of professional diversity in the community that they bring together. And that necessarily also goes along with some diversity in the salaries that people are earning pre-MBA. And I think that’s what you’re seeing in those numbers with with the ALE.

[00:16:52.980] – John

Yeah, very true. So if you want to look at this, it’s called, Quit a 6-Figure Job for an MBA? That’s what students have done at these 10 B-Schools. Check it out on Poets and Quants. Now, the other big news that’s occurred is the Harvard Business School has finally gotten stem designation for its entire MBA program. If you go to Harvard now and you get the MBA, no matter what concentration you focus on in your elective curriculum, even marketing, in other words, a subject that may be less quanti than accounting, finance, or something else, you can still get stem designation from a Harvard business school. It’s taken Harvard a long time to do this. This is six years after the first US school actually got stem designation for its entire MBA program. That was Rochester Simon, which more naturally got it because Rochester Simon has a more quanti curriculum overall, as does Carnegie Mellon and MIT. But it took six years after Rochester did it. Maria, it’s your alma mater. How come they took so long?

[00:18:09.280] – Maria

I don’t know. You know what? If I had to guess, which is I want to Just a caveat, this is 100% a guess. I have absolutely no insight into this process because I have never tried to make a school stem designated before. But if I had to guess, I think it’s that because HBS is focused on a general management curriculum, The case method, it does involve numbers. It’s not like you never see a number during your time at HBS, but it is also not a primarily quantitatively driven program. If I had to guess, I would say that it probably involved having to prove to whomever the authorities on high might be that, yes, we actually are teaching people numbers. There’s a stereotype that you’re not going to see a number if you go to HBS. That’s not true. Maybe they might have had to adapt certain cases or certain assignments to make them a little bit more quantitatively and analytically heavy. If I had to pick, it would be that, as opposed to a school that can point to, Here are our four electives in data science, and here are our three electives in optimizing operations with calculus and all kinds of crazy stuff.

[00:19:17.220] – Maria

HBS doesn’t really offer those sorts of classes, and so I suspect that’s what it was.

[00:19:22.530] – John

True. In fact, I think there are a lot of people who sometimes think, Well, is Harvard the right place for me? Because I might not get the quantitative work that I would get in another program. If you feel that way and you think the case study is not the best way to do that, I would disagree with you. I wonder where you are, Maria, on that. But now you I didn’t even think about that anymore. But Maria, you can still learn numbers and do case study work, right?

[00:19:51.550] – Maria

Of course you can. Of course, there are courses that will naturally lend themselves more to analysis, et cetera. However, I do think that the general management focus at HBS, it’s more things like, instead of, for example, teaching you perhaps the nuts and bolts of super intense data analytics, it’s more along the lines of if you’re ever managing a team and you need to hire a data analyst, here’s what you need to know to work well with that person. For example, I took a class on business law when I was at HBS. I did not feel like doing a full JD MBA, but I did take a class in business law, and the professor was very clear right up front. You’re not going to become a lawyer from this class, but my goal is at some point in your career, you will need to work with legal counsel, and I’m going to teach you enough to know how to manage the lawyers, how to talk to them, what questions to ask, how to say, Wait a minute, are you sure about that? Because isn’t there something in the law about this? It’s the same thing with HBS, where those nuts and bolts of execution, you can definitely learn it, but it is also, this dovetails nicely with the conversation we were just having.

[00:20:57.040] – Maria

If you do look at some of those starting salaries, people coming in You’re not going to Harvard Business School to become a full on quant type of person. You probably might have done that in undergraduate. Maybe you worked at a hedge fund for a couple of years at a lower level quant position. But if you’re going to a place like HBS, it’s because you want to advance to a level of your career where you’re not the person necessarily crunching the numbers, but you will one day write a letter of recommendation for the person on your team who is when they decide to apply to business school later on.

[00:21:26.530] – John

Right, exactly. Now, Caroline, obviously, this means more to an international applicant than it would to a domestic applicant. Let’s explain why.

[00:21:35.560] – Caroline

Yeah, absolutely. So it’s a great opportunity for international students because it means that instead of being able to stay in the US for one year post-MBA, they can stay for three years, right? So that’s a dramatic difference to be able to to continue to land a job and continue for three years. And of course, many of them will then be able to stay longer term having established themselves in a job market in the US. So that’s a big part of the appeal of having this designation is that it’s a huge benefit for international students.

[00:22:13.120] – John

And the latest class profile at Harvard shows that 39 % of their incoming class is international, which seems pretty solid. I mean, a lot of schools are only at a third. And of course, there are many schools that are well above 39. Do you think this means that that is going to increase more naturally, Caroline?

[00:22:34.670] – Caroline

Well, let’s see how things go with the election. And I do wonder if they tried to get this in and done and dusted before the election in November because there’s obviously uncertainty about which way that will play out. And if Trump wins, that’s probably not a positive for immigration and for business schools. So we saw with the previous Trump presidency that the volume of international applications dropped to the top US schools. And so I would imagine that that could repeat itself if Trump were to get in again. So perhaps this would help to compensate for that effect at HBS.

[00:23:12.130] – John

Yeah, that’s a really good point, because when Rochester Simon first did this, I remember having lunch with a rival dean at a major business school who basically openly worried that the Trump administration at the time would clamp down on the whole STEM designation program and would basically eliminate it. That gives you an indication of where the Trump administration could be. I mean, he was saying, Rochester went too far in getting a designation for their entire MBA program, as opposed to, let’s say, if a student did a concentration in financial engineering or quantitative analysis, then that makes sense. But over the full MBA, he was worried, really, that the government would crack down on the Trump. And I think that that’s still a possibility if, in fact, Trump gets elected. So, yes, you’re right. Not having a STEM designation also has put Harvard at somewhat of a disadvantage against all the other business school programs in the US which have stem designation, including peer-level schools with Harvard. So this probably levels the playing field and makes Harvard more attractive to international applicants who are worried about whether or not they can land the job with an H-1B visa because the extra time that you have to get the visa now is three years.

[00:24:44.050] – John

It’s two years plus the one you would ordinarily get. That gives you three shots at an H-1B visa, which really significantly increases the odds that you can get that visa. It’s just a level of comfort that you know that if you’re doing a job that’s somewhat related to STEM, you’ll have that three-year guarantee, at least. Maria, any final words on this? You must be happy that your Amway model has finally gotten into this act.

[00:25:11.810] – Maria

Yes. I think I will admit it is not something that has been keeping me up at night. However, so much the better for all the reasons that were already mentioned. It’s great for international students, and I’m thrilled.

[00:25:25.420] – John

Yeah, I think it’s a really good move. It’s called Harvard Business School’s Full MBA, is now stemmed, designated. Look it up in some quotes it wants. Meantime, if you are deeply into six figures, and you are even an international student, now you have two more reasons to come and get an MBA. Number one, There are plenty of other people like you who are earning more or equal the sum that you’re earning. Now at Harvard, you get three years to work in the US instead of only one with three shots at an H-1B visa. All good news. Hey, thanks for listening. This is John Byrne with Business Casual.

Business School News | General | P&Q Podcast "Business Casual"
Already In Six-Figures? Is An MBA Smart?
Maria |
August 14, 2024

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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