The Businessweek MBA Ranking Controversy
Maria |
October 19, 2021

Ajani Jain, Deputy Dean of Yale School of Management, sparked a controversy with his recent analysis demonstrating how inaccurate and distorted the Bloomberg Businessweek is, in terms of their MBA ranking and methodology, when he attempted to recreate their approach.

In this episode of Business Casual, Maria, John and Caroline discuss the Businessweek MBA rankings and their overall impact. Listen to hear discussion on:

 

  • Why all three of them were already skeptical about the “rankings” (And what exactly John means by that)
  • Why Maria thinks that of all the rankings, Businessweek is always the one with the ‘wild swings’
  • Why Maria praises Jain’s writing on how he approached the matter with Bloomberg in this episode. (It is certainly without a doubt intellectually humorous!)
  • The team debate the question “Do MBA rankings really matter?” Is it more important than a genuine and authentic reputation that data analysis and statistical ranking systems do not obtain?
  • Is ranking manipulation a criminal offense punishable by law?
  • One fact that will enrage the faculty: applicants value rankings three times more than faculty quality when choosing a program. (The statistics gathered from applicants will astound you!)

Episode Transcript

[00:00:07.330] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast. We’re going to talk about a big controversy that’s in the news right now. We broke the story upon Poets and Quants. It’s an analysis by Anjani Jain, the deputy Dean of Yale School of Management, on the latest Businessweek ranking of MBA programs. He pulled apart all the numbers and put them into an optimization model, and Lo and behold, found that he could not replicate their ranking if he used the exact weights on five indexes that they used to measure the quality of an MBA experience. In fact, if he runs the analysis on the weights that they provide and state in their methodology, 79 of the 84 schools that would be ranked would have a different rank, and some of the schools would have dramatically changed rankings. One glaring example, Wharton, which already was ranked 9th in the Businessweek ranking, would actually fall to 28th if the proper weights were accorded based on this analysis by Anjani Jain. Now I should point out that Businessweek is saying that Anjani’s analysis is incorrect. It’s inaccurate. You can’t possibly attempt to replicate the data without having the raw scores as opposed to the scores that they actually published online and in the magazine.

 

[00:01:50.930] – John

Anjani argues that it doesn’t make any difference if the actual scores published in the magazine and online are truly reflective of the raw scores. It doesn’t matter whether you have the raw scores or not. Caroline, what do you make of this?

 

[00:02:06.100] – Caroline

Yeah, I agree that it looks very dodgy indeed, and that Businessweek has not responded very clearly to the challenges, so definitely looks very suspicious. I think they’re trying to make some excuses now and close the discussion, but it definitely looks like something is a mischief, which is very concerning.

 

[00:02:29.450] – John

Yeah, exactly. And now, Maria, I know. Well, all three of us are skeptical of these rankings to begin with. If you’ve listened to our podcast in the past, you know that. And we had a whole podcast not long ago devoted to the Bloomberg Businessweek ranking, where we kind of tore it apart. But, Maria, what’s your take on all this?

 

[00:02:50.420] – Maria

Yeah, I think of all of the rankings, Bloomberg Businessweek has always been the one that kind of has these wild swings back and forth. And I think it’s because my impression is that it’s a very subjective ranking. And so if you organize a bunch of people together and you say, okay, guys, Businessweek is going to be reaching out to you, and it’s really important that you say that our academic experience was the best thing in the world because that’s how they rank, whether or not it’s a good academic program. I don’t think that you should rank a business school based on a popularity contest solely on people’s opinions. Or what if a bunch of graduates are grumpy in a particular year? And I don’t know, I do think that there should be some emotional component. Right. Are you happy you went to the school? Something like that. But I don’t think that so much of it should be so qualitative. So, yeah, I think there’s just something fundamentally wrong with Businessweek, how they’ve been doing this anyway. And so even if they had like, let’s say, let’s say if what Deputy D and Jain is saying is correct, and they got these weird results, like super weird results.

 

[00:04:00.710] – Maria

And they were like, oh, no, this doesn’t look good. So we need to kind of mix things up a little and change it around. Even if that’s true, the fact that they are getting such weird results, that should be a signal to them as an organization. Like, wait a minute, this is weird. One school in Texas, does it really have the best academic experience? I’m sure it’s a great academic school, but isn’t really the best. Maybe we should look inward and with a bit of maturity and say maybe our own ranking isn’t very our own methodology is not that great. I will say, as a side note.

 

[00:04:35.510] – John

In context of what you just said, Marie, if I may, Marie is referring to the fact that under the Businessweek surveys of students, UT Dallas is number one in terms of their learning category, which seems pretty surprising, right?

 

[00:04:54.130] – Maria

I’m sure, I’m sure it’s an amazing school. But come on, the number one learning. Come on. Even when they first get that data back, even before they move to analyze it, and before they move to do all these machinations and this sort of Cirque du Soleil twisting themselves into a pretzel to try to get the to try to claim that their methodology works. Like, maybe internally they should be like, maybe our methodology is kind of lousy because this doesn’t really pass the test. Although I will say, just as a side note for all of this, if I were Businessweek, I would sort of snarkily point out that, hey, Jain, when you redo it, it just so happens at your own school, jumps up four points of four places. And it just so happens that Yale is now again in the top ten, especially because we know, I think we might have mentioned at some point before in one of our conversations that I think Yale in particular has been really trying to game the rankings or to increase the ranking these past several years, anecdotally I’ve seen a much bigger emphasis on GMAT scores at Yale, for example, than I did 15 years ago.

 

[00:06:09.550] – Maria

If I were Businessweek, I would sort of reply with that. But regardless of where you stand on this, this is like, get out the popcorn, read this article, go to Poets and Quants. And right now, because it is such great, it’s such compelling reading, although I don’t remember what his E score is to save my life. But the other thing that’s great is that really just like James writing is so awesome. I love my favorite phrase that he uses it’s a deceitful canard. As a society, we don’t use the term canard enough. And I, for one, applaud Deputy Dean Jain for his wonderful writing, which has just been a delight to read, even if I don’t understand the statistics behind it.

 

[00:06:53.890] – John

Yeah. His response to Businessweek is a really wonderful reading. He calls Businessweek statement disingenuous and nonsensical and yes, a canard, among other things. And then there’s all the analysis, which some of it is above my pay grade in my head. And I never had the benefit, like you two, of taking statistical courses. So while you 2 may know everything about this, including the difference between a normalized score and a Z score, I don’t have a clue.

 

[00:07:33.950] – Maria

Don’t look here.

 

[00:07:36.110] – John

Now, again, I need to point out that I’m the culprit who originally created the MBA ranking back in 1988. But I want to add some context here. The ranking has changed dramatically. Back when I did it, it was a simple customer satisfaction survey that measured the satisfaction of the latest graduating class and the employers who hired them. That’s it simple. And it was cleaned in that way and pure because it was so simple. And I had hired a PhD in statistics who ended up becoming the President of Cooney, the College system in New York, to be my consultant to make sure that we were doing the right things. And I think a lot of these ranking organizations put the fear of God in business schools to report correct data and not to interfere with any surveys of student opinions that they may do. It’s also incumbent on them to have transparency, to operate with full integrity, and to provide the data that would actually allow for more rigorous analysis of the results. And, of course, that’s not happening here. The big question is just an interesting, entertaining fight that we can sit by the sidelines with a bag full of popcorn and enjoy.

 

[00:09:03.350] – John

Or does this fight really matter?

 

[00:09:05.430] – Caroline

Caroline, the rankings do carry rates, right? People pay a lot of attention to them, for better or for worse, from prospective students who are thinking about ways to apply to recruiters, to faculty who are looking at which schools they want to work at. It does have a broad impact. And so they have some responsibility here to respond more clearly to the claims, I think.

 

[00:09:35.190] – John

Yeah, that’s really true. It’s worth pointing out that there’s only one of the five major rankings that actually does audits of school provided information, and that’s the Financial Times. And I believe that they audit programs every three years. And I got to tip my hat off to them for actually going to that extra step to ensure more integrity by the schools, because obviously the schools are under significant pressure to push numbers in their favor, no matter what they are. But to your point, rankings are consequential. They do matter. Two years ago, the association of International and Graduate Admissions Consulting, we call that AJAC. And we’re here as a member. They surveyed MBA applicants, and out of nearly 2000 responses, here’s what they found. They found that nothing mattered more in school selection than rankings and reputation, two factors that, let’s face it, that largely become inseparable. So when you ask the applicants what were the top factors influencing specific choice of schools, 63% of them sided rankings with an equal number of sighting reputation. Now, I’m going to state a fact that it’s going to enraise a lot of the faculty who listen to our podcast.

 

[00:11:02.270] – John

That means, according to this survey of applicants, that applicants value rankings three times more in selecting the program than faculty quality. Faculty quality got 21%. The cost of the program got 23%. GMAT or GRE scores attained, meaning it affects where you apply, 27%. Think about that. 63% said ranking, 63% said reputation. They both go hand in hand. It’s kind of remarkable, frankly. And then when GMAT surveys its folks and they did so in 2021, earlier this year, they found that rankings was a key information resource for researching programs. 45% of domestic MBA applicants said it was 49% of international MBA applicants said it was. So it’s clear that these rankings sway people one way or the other because they do affect your impression of brand. And this is particularly true when you get past Harvest Erin Wharton, and then you start getting into the other schools, which, after all, enroll and get applications from far greater numbers of people than the combined numbers at Harvard, Stanford and Wharton, where I think no matter what their rankings are, it really doesn’t matter because people won’t believe that they’re ranked poorly. No one’s going to believe Wharton’s current rank of nine in Bloomberg Businessweek, and no one would believe the reconstituted ranking, which shows Wharton is number 28.

 

[00:12:45.070] – John

So it doesn’t matter for those schools, but it matters for everybody else pretty much. And then you have this sense that, look, you know, it matters because people cheat. Next month, the former Dean of Temple University’s business school is actually going on trial in federal court for allegedly cooking the books and providing fraudulent data US news that allowed his online MBA program to be ranked number one for four consecutive years. And this is a criminal indictment. It’s the first time the government has actually gone after a school. And it’s been for alleged fraud, which is pretty darn remarkable. And that trial is going to be getting a Philadelphia courtroom, I believe, in the second week of November. Sorry. But Marie, when you chose the school, you weren’t thinking about rankings, were you, because you went to Harvard?

 

[00:13:50.850] – Maria

No. You know, it’s funny. I basically looked at, like, people I admired and where they had gone to school. And then also I looked at people that I didn’t like so much. And a lot of them all randomly, perhaps coincidentally, had all ended up going to another well known school. And so I was like, well, that helps me narrow it down pretty considerably. And yeah, actually, I believe at the time Wharton I mean, Harvard has always been obviously, because it’s Harvard. But Wharton at the time I was living in Asia, and my boss was like, well, Wharton is a better school. Right? And I was like, I don’t know. Wharton is sort of famous worldwide for being like the business school. And so I don’t even know if I looked at the ranking. We’ve talked in the past about why we chose our respective schools, but the people around me were at least my boss at the time was like, oh, I thought Wharton was the better. I’m surprised that you’re taking Harvard INSEAD, but they were just such different programs that I chose the one that I thought was best for me. So I don’t know.

 

[00:14:53.650] – Maria

It’s a shame because I do think that it’s interesting that the three of us have spent so many years in the space, and we’ve seen not just the fluctuations in the rankings, but we’ve seen clients or people that we’ve interviewed or anyone like that who goes to different programs. And many of them have wonderful career outcomes, really, regardless of whether they go to a school that one year is ranked second and the next year is ranked 7th. And so we can see that the rankings themselves, in terms of outcome for your life, don’t really matter a ton. But every year, people coming fresh into this process, it’s a fresh batch of people every single year. And so it’s brand new to them. And so it’s understandable that the rankings is the first place they would look. And I guess it’s understandable that they would place a lot of weight on it. It’s just sort of a shame that we can’t sort of transmit our collective wisdom into their brains and feel like it’s not nice, but it’s not the be all and end all of the experience.

 

[00:15:53.530] – John

That’s really true. And Caroline, obviously you picked INSEAD because you wanted a far more international global experience, and that’s what you got there.

 

[00:16:02.450] – Caroline

Yeah.

 

[00:16:03.550] – John

INSEAD great school was a terrific MBA program. It has been for a very long time. I’m sure rankings didn’t come into the picture for you either.

 

[00:16:14.240] – Caroline

No, they didn’t. I don’t remember consulting the rankings, but I think people it’s something that’s sort of in the background.

 

[00:16:20.490] 

Right.

 

[00:16:20.750] – Caroline

People are aware of them, and I know that it does create a reaction. So I’ve seen that when I was working at it yet that when the score went up in the rankings, stakeholders get very excited. And when the score went down in the rankings, they’d been knocking on the Dean’s door and wanting explanations. So people do take notice. Right. Even people who know these schools incredibly well. Alumni, donors, et cetera. They do keep an eye on these things and they want to understand what’s going on. So even though you may know it’s all very well and appreciate its value, regardless of what particular publication says, people are aware of the impact of the rankings have on other people. So the influence that that has and they care about the sort of public reputation of the schools. And so I do think the rankings have disproportionate influence, unfortunately.

 

[00:17:29.450] – John

Absolutely. Well, no matter how this plays out, meaning, will Businessweek ultimately concede that it made an error or will it never do that? And the argument will just be out there? I think the one good outcome of all this is that it makes us do exactly what we should be doing treating these lists more skeptically, looking at them probably more for entertainment value than for the reality that this school is number three and that school is number five and the other school is number eight. Again, I’ll always say the benefit of a ranking is generally the underlying data that comes with it. And without rankings, I don’t think we would have had the kind of disclosures that we’ve seen in the last quarter of a century where you know what the average GM out of entering classes, you know the average GPA, the number of years of work experience, you know what the outcomes are going to be in terms of average salary, signing bonus, percentage of people who have a job offer at graduation and three months later. These are all stats that often go into rankings and they are public because the rankings exist.

 

[00:18:48.140] – John

And I think that’s a positive thing for people to help make informed decisions about where to go. Meantime, pop your popcorn set in your sofa and read all the stories and Poets and Quants in the back and forth between Bloomberg this week and Anjani Jain and make up your own mind. That’s all makes sense. All right, Maria Caroline, thank you so much. Watch again for your wisdom and your smarts. This is John Byrne with Poets and Quants you’ve been listening to Business Casual.

 

Business School News | General | P&Q Podcast "Business Casual"
The Businessweek MBA Ranking Controversy
Maria |
October 19, 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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