The challenges facing international MBA applicants in the U.S. are under the spotlight in this candid discussion featuring John Byrne, Maria Wich-Vila, and Caroline Diarte Edwards. Amid the backdrop of falling enrollment numbers at major schools like the University of Illinois and UC Davis, the potential impact of the recently announced tax on H-1B visas looms large. This development is not just altering the landscape for international students but also inflicting significant financial burdens on educational institutions.

Caroline emphasizes the ripple effects of this shift, noting that while European schools like INSEAD and London Business School might benefit from increased applications, the loss to U.S. institutions is significant. International students bring invaluable diversity to classrooms, enriching both academic and social experiences for all students. This loss of diverse perspectives is seen as a myopic setback not just for universities but for the broader U.S. economy, which historically thrives on immigrant contributions, especially in the tech industry.

Maria, drawing from her experience with ApplicantLab, articulates the real and pressing concerns of potential applicants from lower-income backgrounds. She advises that individuals critically assess their financial and career prospects, considering the current uncertainties. With application volumes expected to drop, there may be unique opportunities for some candidates, but careful planning is essential. For international applicants evaluating their options, a decision to pursue an MBA in the U.S. now involves weighing both risks and unprecedented opportunities.

Episode Transcript

Note: This transcript was generated by AI and may contain minor inaccuracies.

[00:00:06] – John

Well, hello, everyone. This is John Byrne with Poets & 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 Illinois, the school, the Guise 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 a two and a half to three million hit on their budget this year. Both of these things have occurred before the announcement of $100,000 tax on H-1B visas, which will make it more difficult for many employers to hire international students and keep them in the US for an extended period of time. We’re getting the new class reports of the new cohorts of students who’ve arrived on campus in the fall of this year. 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.

[00:01:37] – John

Schools are preparing for the worst because of the H-1B visa decision, which could affect future employment. Caroline and Maria, my co-hosts, are in the market helping people get into the best schools in the world. Caroline, what are you seeing?

[00:01:56] – Caroline

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 INSEAD and London Business School and the other top 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 from the US perspective, for 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 It would be a very good time to apply, because definitely, the 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. So for some candidates, it, this is actually a fantastic opportunity to get into a top school. But 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 that brings with a diversity of perspectives that enriches the learning experience so much for everybody, enriches the debate, and brings so much to the academic experience as well as the network and the social experience.

[00:03:30] – Caroline

It’s everybody’s loss, right? Very true. I think it’s a very myopic perspective that the US government takes that there needs to be more of a refocus US education institutions on the domestic market because those international applicants bring a lot to the domestic students in enriching their learning, enriching their network, and of course, bring a huge value to the US 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 % of the US population, but they have founded, to date, about eight % of all the tech startups in the US. 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.

[00:04:40] – John

Now, Maria, you run Application Lab, which is a platform that helps applicants get into highly selective schools. Many of the people who use your product are international students. What are you seeing?

[00:04:55] – Maria

Yeah, I mean, everything Caroline is saying, concern is, I think, a delicate way to put it. 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. I think the concern is very real and very merited. I can’t, in good faith, tell someone if they really start to sit down and do the math start to run the numbers, if they just assume that things are going to stay as is, and this is the big caveat that 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 is, though, some good news. Even if we assume that things stay status quo, which I hope and I’m pretty…

[00:06:03] – Maria

I think I’m cautiously optimistic that they won’t. But there are other markets as well. I’ve had a lot of candidates or former clients, I should say, graduate from business school, not be able to get jobs in 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 is not perfect, but you could also do worse than live in Dubai. The salaries are pretty high. The standard of living, if you have a white-collar job, it’s not the worst outcome. It’s not like If I can’t stay in the US, that’s it. It’s not a binary of it’s either the US or it’s nothing. Then I think the second point is we’ve just seen so many things. Let’s take something from a different facet of policy, the tariffs. The tariffs were announced and the markets went crazy. In the months that have followed, oh, well, actually, here’s the tariff, but this one company, their products aren’t going to be subject to the tariff.

[00:07:14] – Maria

Then there’s this other company that maybe they’re not going to have to pay the same tariff. I can’t help but wonder if some of these very large companies that are getting tariff exemptions, their ability to lobby for the H-1B, maybe lowering of the H-1B fee. If they’ve been able to successfully lobby tariffs, they might be able to successfully lobby against these visa fees. 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. I am cautiously optimistic that this could be, hopefully, right now, it’s the big flash and storm and making the big splash. Everything’s about showmanship and making the big splash. 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. If you’re talking about the US two-year program, you would graduate in 2028. At that point, who knows what might happen? I I like to think that what we have seen so far in terms of the visa policy is hopefully, roughly the floor about as bad as it can get.

[00:08:37] – Maria

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… You can’t stay here. You have to go someplace else. If we assume that that’s the initial negotiating position, it’s just going to get… It’s got nowhere else to go. It’s even worse. 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 pragmatic and tangible way. 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. I mean, didn’t a bunch of the CDC employees that were all fired under DOGE, didn’t more than half of them, I think, were recently rehired back again?

[00:09:33] – John

True.

[00:09:34] – Maria

Whatever you think of the policy, it seems like some of the policies are being slowly walked back. I think if you’ve got an adventurous It’s not going to be the spirit. By the way, if you apply now, sorry, I know I keep going. But if you apply now, let’s say you get accepted, you don’t have to show up until August of 2026. That will give you time. 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 six months from now, he’ll be like, Ha ha, just kidding. I’m doubling the number of H1Bs. We have no idea what’s going to happen. Give yourself that optionality.

[00:10:25] – John

Yeah. Things are so uncertain that that could very well happen because One day, tariffs are on one country, the next day, they’re not. One day, they’re pausing the interviews for student visas, the next day, 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. There’s more uncertainty than there is certainty about any of these things. As you point Now, if you did apply this year, well, the odds are going to 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 class, 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 pool schools to select candidates. In a way, if you play the long term, in the MBA in many graduate degrees or long term bet, I think you’re going to be oddly better off. 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.

[00:11:55] – John

What do I mean by that? I mean, 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 challenge of one kind or another. I think the takeaway is not to be discouraged and throw up your hands and say, 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’ll probably, and most likely, be an administration change and a change in these policies if they even get completely adopted, as Maria points out. I mean, wouldn’t you think that’s the best strategy, Caroline?

[00:12:46] – Caroline

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 going to 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. So one thing gets announced and the next week it gets rolled back. They’ve done so many things where they’ve realized, Oh, actually, that was a really bad idea after all. They’ve changed things. So things may not… It may not turn out to be as bad as we fear. And And 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? 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.

[00:14:10] – Caroline

So I think that given the current circumstances, a good strategy is to hedge your bets and apply more widely than you might have otherwise done.

[00:14:19] – John

Yeah. Plan Bs are good. I mean, let me just say business schools in the US have for years advised international students that they always should have a plan B in the that they can’t get with a US company. The other thing 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. You can be hired here, and if there’s any challenge in getting employed here in the US, you can simply start in an office outside the United States with the hope of coming back when things clear up. That’s That is also another important thing to keep in mind. 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, embracing, loving the diversity of their students, and particularly those from different cultures 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 and needed in the classroom.

[00:15:52] – John

Now, Maria, in the past, we’ve seen applicants who tried to say, Okay, can I time my application and my enrollment in a program to what I think might be the next recession. We know that in recessions, applications go way up, 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. But it’s It’s almost impossible to time a recession, and I’m imagining it’s impossible to time what’s going on here now, right?

[00:16:39] – Maria

Yeah. I mean, if we could all time when. Everyone’s been talking about a stock market crash. That’s I don’t have to bring another disparate topic in, but everyone’s been talking about, It’s a bubble. I’ve been hearing it’s a bubble for a year and a half. You can’t ask the people who enrolled in business school, who got into business school in 2020. There’s always going to 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 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. I think, Leah, to 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. As Caroline has pointed out, so rightfully, if other high-quality international students are spuked by the current H1B talk, now is your chance, international candidate. Jump in there, shoot your shot.

[00:17:42] – Maria

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. One final, 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 going to be walkback of some of these, and maybe he’s going to change. But even if there isn’t a change, let’s think about this. The companies themselves are going to have, and you started to allude to this, John, when you mentioned that a lot of them are global concerns. They’re going to have now a two-year window in which to say, Okay, we know that we’re not going to 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. I know that some of the business schools were looking at, do we rent out some space in Toronto and do Zoom classes?

[00:18:43] – Maria

We do a hybrid, like 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 from Texas, and he was saying that Rice has some 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. Things like that, even if my very cautious and perhaps irrational optimism turns out to not be true, let’s say the things get, OPT is banished and everyone is banished, and it’s the worst case scenario. Again, there’s going to be two and a half years for these companies to quickly find, Okay, fine. We’re going to open up an office in Mexico City, and we’re going to pay people really well, and we’re going to… Whatever that is, because the companies are still going to want the talent. 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 want that talent. They want that intellect. They want that energy and that drive to make their companies better and to make more money.

[00:19:47] – Maria

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 those incomes and to provide those perks and some a compromise type of situation. Again, I think if you’re applying now, if you’re going in with eyes wide open, shoot your shot. I would absolutely tell people to try that.

[00:20:19] – John

Yeah, I totally agree. Generally, this is my rule of thumb, and Maria and Caroline, you may or may not agree with this, but at the The top MBA programs, they’re so selective that the people who apply to them generally are a very self-selecting group. I always say that roughly 80% of a school’s applicant pool is qualifying to actually get accepted, get in, do well, and land a good job. And yet we know that at Stanford, the acceptance rate is 6%, at Harvard, it’s 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, Well, okay, so these US schools just might dip a little more into the domestic pool to make up for the offset of international candidates. Well, as it turns out, there is a little notice clause in the so-called Big Beautiful Tax Bill that was passed here under Trump that places severe limits on federal loans for graduate students. Now, the current Grad+ Loan program allows students to borrow up to the cost of their graduate programs.

[00:21:45] – John

That comes to an end in July of next year. After that, grad students borrowing will literally be capped at $20,500 a year with a lifetime graduate school loan limit of $100,000. That’s a big deal because at the top MBA programs, it’s not on typical for a student to borrow over $100,000 easily. These caps are also going to affect domestic enrollment. Again, 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. I side with Maria and Caroline. To me, the advice is look long term, don’t be 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 going to be facing probably a very different environment. Also understand the odds are in your favor in getting into a highly selective, really good program in this coming year.

[00:23:33] – John

And know that while people too often calculate the value of an MBA based on short term variables like, what’s my starting salary going to 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 receiving a great education. 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. Some of the best opportunity comes when people perceive there to be significant challenges. I think this is really true with business school. Well, we hope we’re convinced to come and try and hedge your bets, 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.

[00:25:07] – John

This is John Burn with Poets & Quants. Thanks for listening.