Record Pay & Placement For MBAs In 2021
Maria |
November 23, 2021

It’s no secret that many MBA candidates attend business schools in the hopes of improving their career options, including higher salaries, more responsibility, and more influence. 

In this episode of Business Casual, John, Maria, and Caroline will discuss MBA employment, specifically how the job market for MBAs has been exceptional this year.

Points of discussion:

  • How dynamic is the MBA industry in general?
  • How huge are the numbers involved?
  • Which b-schools align with your future job interests?

Episode Transcript

[00:00:07.750] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. And welcome to Business Casual, our weekly podcast with my co host, Maria Wich Vila and Caroline Diarte Edwards. Maria, of course, is the founder of Applicants Lab. And Caroline is the former admissions director of INSEAD and a co founder of Fortuna Admissions. We’re going to talk today about employment. Obviously, people go to MBA programs in part to enhance the opportunities in their careers for greater pay and greater responsibility and influence. And we can tell you that it’s been an incredible job market for MBAs this year, and it’s looking like we’re heading into another great year as well. One school after another is reporting record pay and signing bonuses for their graduates, as well as record or near record placement rates, both at graduation and three months later. And we all know that there is a labor shortage in the US, but oftentimes we think of a labor shortage in terms of those low cost jobs at McDonald’s and Starbucks and other places. But, in fact, the demand for MBA talent and the people who are graduating specialty master’s degrees is so great right now that there’s clearly a demand for highly talented young people as well.

 

[00:01:37.990] – John

Caroline, what do you make of this? What does this tell us about the enduring value of the MBA and the ROI on it?

 

[00:01:46.770] – Caroline

Yeah, it says a lot, doesn’t it? I mean, it’s great news that the economy is doing well and rebounded faster than people had thought twelve months ago and that the recruiting market is so strong. And as you say, it says a lot about the value that employers place on the MBA. And periodically we discussed the criticism that comes up in the media of business schools and the MBA and people who say that it’s not worth as much as people think. But the proof is in the pudding. Right. And the proof is what people are willing to pay for that credential and the experience and the skills that people build during the programs and the fact that recruiters are coming back every single year and recruiting in such vast numbers and willing to pay such a premium for those graduates. That says more than anything else about the value of the degree. And the students are seeing a tremendous bump in their salary. When you look at what people are earning before the program and what they’re earning when they graduate, isn’t it the degree program that generates the best return on investment and the fastest payback?

 

[00:02:58.130] 

Yes.

 

[00:02:59.450] – Caroline

Excellent news. Yeah, it’s somewhat paradoxical there, isn’t it? Because it’s great news for the business schools and for the students. But it also means that there may be a downturn and applications coming because the job market is so strong and there may be a decrease in the pipeline. People applying to business schools because the candidates who might otherwise apply are also getting job offers and promotion. So it’s a somewhat paradoxical picture for business schools that while job markets are very strong, sometimes things are tighter on the incoming pipeline, and when there’s a surge of applications, it’s often more difficult to place those students. So it’s a somewhat paradoxical situation.

 

[00:03:47.990] – John

Yeah, that’s really true. Usually application volume is counter cyclical to the economy, and as the economy goes strong, applications go down. So it will be interesting to see when this current application period is over, will things be flat? Will they be down? I know in round one, the number of schools were reporting fairly significant increases in their applications. Maria, what do you make of these salary numbers? And I bet you wish you graduated with your MBA now as opposed to then.

 

[00:04:22.570] – Maria

I wish I were 29 years old. In general.

 

[00:04:29.310] – Caroline

You are 29 years old. You’re right.

 

[00:04:33.330] – Maria

I will Venmo you the money that I’m going to pay you to say that. Yeah. No, of course I wish I were graduating now. I think reports of MBA career opportunity death have been greatly exaggerated. I got a real kick out of that. Four days ago, the Wall Street Journal published an article that was titled MBA starting salaries are Soaring, and a little over a year ago, they published an article that was like, MBAs are usually swimming in job offers by now, but not this year. We’ve talked about this so many times, where the business media, where the writers themselves don’t often have MBA, is really love to bash on the MBA when it’s down. They love to kick it whenever there’s even a shred of bad news. But I think, as Caroline said, the fact that these employment numbers have come roaring back to where they have been in the past, the fact that the salaries are in fact, going up a little, I think it’s great news and continues to be an enduring testament to the value of this degree.

 

[00:05:38.670] – John

Yeah, definitely. Now we have yet to see the reports from Harvard and Stanford or Columbia. Harvard and Columbia will come out before the end of November. Stanford tends to hold off until early January because they graduate a bit later than the other schools. But if you look at some of these reports, they’re pretty impressive. Okay. Wharton basically found that by late summer, nearly all of the schools graduates seeking jobs were working or had received offers of work. There was 99% offer rate after three months, a new school record. Over at MIT, there was a big increase in other compensation, which some schools have now stopped reporting. But this is revealing because other compensation is often a carrot dangled in front of MBA graduates to get them to take an offer. The median went from 11,000 other comp to 34,000. Overall, I contributed to an eight and a half percent jump in total compensation to 195,600. At MIT Sloan Chicago, Booth also saw median salaries and bonuses increase, leading to overall compensation of 178,000, plus up about 5% over the previous year. Kellogg today, in fact, gave a little glimpse of its numbers, and they reported that basically 97% of the graduates of job offers three months after graduation, which is up from 95% meeting and starting salaries, jumped $$6,000 to $150,000.

 

[00:07:17.430] – John

And if you add in the bonuses, that comes to $175,800. That’s pretty good money for someone who could be 28, 29, maybe 30. There aren’t a lot of people in the world who make that kind of money, no matter what age they are. To be making that kind of money at 28 to 30 is really a big chunk of change. And of course, that’s just start oftentimes we value these programs on the basis of the starting pay numbers, but the truth is that the long term benefits of the MBA are far more important than what you get when you graduate. Right, Caroline?

 

[00:08:06.870] – Caroline

Yeah, that’s right. And schools do survey alumni three years out, and often later on, often when the schools invite alumni back for reunions, they’ll survey the alumni and ask a bunch of questions to sort of understand how their careers have evolved and so on. It continues to pay off, as you say. And I think the payoff is not just financial, although that’s a big part of it. I think in terms of life satisfaction and career satisfaction, you also see very good data as well, because it gives people options. Right. You don’t have to stay stuck in a job if you’re not enjoying it and you’re not happy there. It opens doors not just when you graduate, but five years, ten years, 20 years down the line. It gives you the credibility to knock on the door of an employer who might not have otherwise considered you. And also you have access to that amazing network of people who are ready to help you if you need help with a career change, career switch, it is something that has tremendous long term value, both financial and in terms of general satisfaction with how your career is evolving.

 

[00:09:26.590] – John

Yeah. One of the intriguing things that I’ve seen over the course of Harvard Business Schools is Harvard Business School. When they have reunions, they often survey their classmates and then deliver a report. And of course, these reports are private and confidential and meant only for the classmates. A number of years ago, I got hold of one for the 25th anniversary reunion of a given class. And what you see is just remarkable detail on the success of people with an MBA 25 years after they graduated from Harvard Business School. Maria, have you had your 25th anniversary yet?

 

[00:10:09.720] – Maria

I’ve gone from being 29 years old to now being 25 years out. No, for John, there’s like a picture of Dorian Gray that’s just like bouncing all over someone in my house. I have not had my 25th reunion yet. And actually, the news of this report is actually, I have to admit, news to me. So I don’t know that maybe they only do it for the 25th, maybe they do it for all of them. And I just have not paid attention.

 

[00:10:40.790] – John

Let me say this for those who want to look this up, this is one of my favorite stories of all time, and I love the headline Love, Sex and Money, a revealing class portrait of the lives of Harvard MBA’s. You might find yourself in that story, Maria.

 

[00:10:58.670] – Maria

That is a click worthy.

 

[00:11:01.910] – John

And it’s totally worthy of the story.

 

[00:11:05.510] – Maria

Yes, of course.

 

[00:11:06.360] – John

What I did is I had a friendly member of the class of 1000 1986 dropped this report on me 25 years later. Here’s what it said. The median annual income of a class of 86 MBA was $350,000. Slightly more than one in four class members reported annual income of 1 million or more, while 8% of the class said they earned more than 5 million. Last year, the median net worth of a member of the class of $6 million. But that number really only tells a small part of the story because 19% of the class reported net worth between 20 million and 100 million. And about 4% of the class said their personal net worth exceeded $100 million. Now here’s really some of the cool stuff. All right. Are you ready for this? Some 18% dated someone they met online, but only 3% of the class married the person they met on the Internet or by some other commercial means.

 

[00:12:07.850] – Maria

Get that commercial means, I don’t know. Hold up. Listen, maybe that’s where people are making $100 million. Maybe they set up that commercial means business, and that’s how they made their money.

 

[00:12:22.070] – John

Some 14% of the class is divorced and another 1% separated. About 5% divorced and remarried. The class of 1986 wasn’t into the bar scene. Only 3% of the class met their spouses at bars from 6% said they met in the party and 4% met randomly on a plane.

 

[00:12:39.980] – Caroline

What? Can they track this?

 

[00:12:41.600] – Maria

What is yeah, this is very this incredible detail. We need it for science. It’s very important for our information about business analytics.

 

[00:12:51.610] – John

Okay.

 

[00:12:51.970] – Maria

Yeah.

 

[00:12:53.510] – John

About 21% met their spouses at their undergraduate schools, while 14% found their spouses at Harvard Business School. How about that? About one in five has skydived, while one in three completed the marathon. Here’s one for the people who have, well, shoe fetishes, one in four on 25 or more pairs of shoes. That’s 58% of the women and 15% of the men. Now, does this story deliver on love, sex and money come around?

 

[00:13:26.190] – Maria

It does, yeah.

 

[00:13:29.500] – John

You got to look it up. But really, the main point here is long term MBA pay. And yeah, this is only a glimpse at one particular class at Harvard Business School. Admittedly the school where people do very well when they graduate from. But nonetheless, I think it’s very revealing and it’s symbolic of what MDAs across the best schools do experience. And to Maria’s point, it’s not only getting the job that pays well, it’s getting a job that gives you fulfillment, personal fulfillment, personal development. And it’s a job that you can pour yourself into and really enjoy. Actually, it’s not even a job. It’s a career, and you’re learning all the time. And I think that’s really what’s not captured in the employment reports that are coming out now. As cool as the numbers are, there aren’t any reports. Of course, the percentages of people who choose different fields, whether they be consulting or finance or technology or healthcare or other consumer packaged goods, media and entertainment and things like that. Obviously, what we’re seeing yet again is, look, the most lucrative careers you can pursue are largely in hedge funds and private equity, followed pretty closely by consulting.

 

[00:14:51.280] – John

If you can land a job at one of the top consulting firms, your starting pay is going to be $165 to $170, with a $30 to $35,000 sign on bonus right off the bat. And I was making the point earlier in our pre discussion that if you look historically at the MBA, what you find is that the actual number of graduates from, let’s say, the top 25 schools in the world hasn’t changed all that much over the years. Yeah, it’s increased a little bit, but not a whole lot. Meantime, student choices have changed dramatically. There are more people going into jobs like hedge funds and private equity firms. There are more people going into early stage companies and startups. And what that all means is that many of the mainstream recruiters of MBAs companies like McKinsey, Bay and BCG and Deloitte and companies like Google, Facebook, Apple, Amazon, which actually didn’t even exist before, but they’ve kind of replaced it to some degree. The IBM’s and Procter and Gamble in a way, although obviously IBM, Proctor, and Gamble still recruit MBAs. But there’s actually a smaller supply of MBAs from those top schools available to mainstream recruiters.

 

[00:16:14.970] – John

And I think that bodes well for the future because the need for really smart, ambitious people who can make a difference in the world of work isn’t going down. It’s only going up. And B schools tend to have a disproportionate share in them. So to the extent that more of those graduates are allured seduced by PE, hedge funds, startups and early stage companies and fewer going into those mainstream MBA jobs, that bodes well because there is less of them and there’s a greater need for them. Maria, do you think that’s true?

 

[00:16:54.010] – Maria

Yeah, absolutely. And one of the things I love about pouring through data like this is that we have said over and over again on this podcast that the rankings are not nearly as life or death important as some people, unfortunately, make them out to be. And some of this data just proves that out. So, for example, if you look at the percentage of people who go into consulting between Wharton, MIT, Booth, and Ross, you’re looking at high 20% to mid 30%, 27%, 28%, 35%. And the salaries are essentially identical, right? Yeah. If you go into consulting out of Ross, you’re making the same amount of money as if you go into consulting out of Wharton. And so it’s so interesting to me sometimes the psychology of the rankings where people say things like, oh, my gosh, I got into a school that’s ranked fourth and I like it more. But I also got into a school that’s ranked second, and I don’t like it as much, but it’s ranked second versus fourth. And it’s like it doesn’t matter, first of all, where you think you’ll be happier. But also if you want one of the sort of the typical big feeder jobs like consulting and technology, especially, you can get those opportunities from top ten, top 15 schools, pretty much identical opportunities.

 

[00:18:11.350] – Maria

We all have clients, former clients that are now at the Amazons of the world. Whether they went to Ross or they went to Harvard, they’re now working together in the same product management jobs. So I think that overall, if you want to go into one of those big feeder destinations, then I think keep your eyes on the prize and say, well, that’s the end goal. So I am not going to obsess and lose sleep over the rankings. That having been said, on the flip side, there are certain fields that are absolutely mostly or primarily available to the top schools, but I think that’s a matter of a chicken and egg situation. So for example, about 14 and a half percent of the class at Wharton went into either private equity or venture capital, and only about one and a half percent of the class at Ross did, if I looked up this data correctly. So that’s a pretty big percentage. And you might say, oh, well, then in that case, I shouldn’t go to a place like Ross. However, I am guessing that a significant percentage of the class entering into Wharton already had either some sort of private equity or relevant venture capital.

 

[00:19:15.090] – Maria

So I think that becomes sort of a chicken and egg. And I think the final point I want to make also is that if you are interested in more of a niche type of a job, like media and entertainment or real estate, really now, it’s not about digging into rankings at all. Really dig into those placement percentages. So just to take real estate as an example, MIT had less than 1% of its graduates, zero. 7% of its graduates going to real estate. Wharton had 2.1%. Three times. If you just look at the percentages three times higher of a percentage of people went into real estate. So if real estate is your passion, don’t just look at the top tippy top schools by the overall rankings, look at a Columbia, look at a Wharton. And again, just keep your eyes on the prize. Similarly with media and entertainment until I’m blue in the face, I talk to people who are like, I really want to work for Netflix, I really want to work for Disney. And I’m like, great, go to UCLA or USC. And they’re like, well, no, I don’t want to do that. You don’t understand how not just in terms of post graduation jobs, but to Caroline’s point earlier, there are so many alumni of USC and UCLA all over Hollywood that for years, for decades to come, going to one of those schools is a pretty good bet.

 

[00:20:31.300] – Maria

So anyway, the data just sort of, I think, backs up things that we have been preaching from the mountain tops for many sessions.

 

[00:20:39.640] – John

Now that’s really true. And talking about career choice, I wonder, Caroline, do you think it’s often said, okay, you want to go into consulting, you go to INSEAD, you want to go into finance, you go to London Business School. But it’s not that simple, is it?

 

[00:20:52.960] – Caroline

No, it’s not. The data shows that, as you said, graduates have a tremendous choice of employers. And I’m sure that whilst we see these wonderful numbers, I’m sure that many of those students had multiple offers that they were choosing from in times like this. It’s not just that the tide has risen and they’re getting increased salary offers. The recruiters are competing more to get those graduates to accept the offer because those graduates are getting multiple offers. So you have a multitude of options that’s the wonderful thing about going to business school is it just gives you credibility to interview with recruiters who were just not otherwise have considered you at all. And so many different paths become open because of that springboard that you’re given to a new future. Sometimes it’s easier to stand out. People think, oh, you have to go to London Business School if you’re looking at international school to go into finance. But if everybody thinks that right, the competition to land a job in finance at London Business School is going to be greater than if you’re trying to get into investment banking from Inc yet, for example. So sometimes it’s better to be in an environment where not everyone is trying to do the same thing and it’s easier to actually distinguish yourself.

 

[00:22:16.370] – John

Now, what advice do you have for people who are basically deciding between or among different offers at schools and they look at the employment report to help make their choice? What should they, in fact, be looking at in those employment reports? Because you can make the argument. And this goes back to what Maria was saying, sure, if you want to go into venture capital, private equity or hedge funds, I think those are very exclusive kinds of positions. They are onesy to Z kind of recruiting opportunities for organizations, usually involving an independent job search of some kind. And there are schools that are known for that, like Stanford, like Wharton, like Columbia, Harvard, Chicago, to some extent. But for other things, I mean, how do you read an employment report to help you decide what school to go to? Any advice?

 

[00:23:12.530] – Maria

I think for me it’s really looking at those percentages of the class. And then also, I guess if the percentages are equal, you could look at the size of the class and just sort of say like how many people are in the alumni network. If every year, 50 people every year after year after year are going into this industry, then that’s probably a good thing for me versus if it’s two people from another school. But I think it’s more than just employment report. The other element of the employment report that you should look at, I should say it’s more than just the employment percentages. It’s also the element of the employment report that you should look at is the geography as well. So you might go to business school and you might say, oh, I really want to get a job offer at McKinsey.

 

[00:23:51.070] 

Great.

 

[00:23:51.440] – Maria

But if you go to a business school in a certain or whatever, if you go to a business school in a certain geography, that regional office might be the one hiring. So you have to look at also where do people end up after business school? I did not anticipate while people do spread out after business school, there actually is quite a bit of gravitational pull for the major business schools for people to stay roughly in that area. It’s a pretty big percentage. So if there’s a certain part of the country or the world that specializes in this is my point with the UCLA, USC thing with entertainment, just simply being in the same city is going to give you networking opportunities, internship opportunities, project opportunities that you’re not going to get if you’re in some random I don’t want to pick on another school, but that you’re not going to get if you’re in a different geography. So I would look at the percentages, the geography, and then the other thing I would look at that’s not in the employment report is looking up the professional clubs, the career focused clubs, and going to that website and seeing okay, oh, look, the entertainment and media club here at Columbia and NYU has an annual conference that has hundreds of attendees.

 

[00:25:02.000] – Maria

And look at who the keynote speakers were versus if you go to another school’s media and entertainment club website, it’s like two people. And it was last updated five years ago. And that can be a really good hint to you of how active is that community for that niche interest of yours within a school. So that’s my other data point.

 

[00:25:21.230] – John

Yeah. Caroline, do you have any advice for reading employment reports for the purposes of either deciding where to apply or where to go?

 

[00:25:30.050] – Caroline

I think that all of that makes a lot of sense. It’s important to think about whether the program that you’re applying to or that you’re thinking of accepting is actually going to help you achieve your goals and get beyond the brand and the reputation and where your parents think you should go to business school and focus on the long term and whether you’re going to, as Maria said, whether the recruiters that you’re actually really interested in are recruiting in significant numbers at that school and whether it’s going to enable you to make the change that you’re looking to make or the acceleration that you’re looking to make and then get beyond the data as well. Talk to people in your target industry who went to that school and find out more about their experience and how the school supported them with their job search and help them achieve their goals and how the school continues to play a role in their careers and their life post MBA. So I think that sort of qualitative input from people who know the school really well from the inside is just as important, if not more important sometimes than that.

 

[00:26:45.540] – John

Hard data really true. In any case, it’s a great market out there. And as more of these employment reports come out, I think you’re going to see even more evidence of that. All right, so all good news and the Wall Street Journal actually reported good news about the NBA. That’s news in and of itself. How about that? Maria and Caroline, thank you so much. Again, this is John Byrne for Poets and Quants. You’ve been listening to Business Casual. Our weekly podcast. 

 

Business School News | General | P&Q Podcast "Business Casual"
Record Pay & Placement For MBAs In 2021
Maria |
November 23, 2021

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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