The Demise Of The MBA + How Schools Are Dealing With The Supreme Court’s Affirmative Action Decision
Maria |
July 26, 2023

In this episode, our hosts dive into two super important topics related to the recent Supreme Court ruling. First off, they tackle the whole MBA scene, the perceived decline of MBA programs, and what that means with fewer applications and program closures in US MBA schools. They’ll also shine a light on the positive side, talking about the resilience of MBA enrollment and the growth of online MBA programs that make up for it. They also take a look at the rising popularity of MBA programs in China and India, and why they’re becoming promising alternatives after the Supreme Court ruling.

To wrap things up, they talk about the aftermath of the Supreme Court’s decision on affirmative action and share how certain business schools are tweaking their essay prompts to get a better picture of candidates’ backgrounds without straight-up asking about race or ethnicity.

Listen in as we break down how the recent Supreme Court ruling impacts MBA education and affirmative action!

Episode Transcript

[00:00:06.970] – John

Well, hello, everyone out there. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co hosts Caroline Diarte Edwards, Maria Wich Vila. We’ve got two topics for you today. One is the MBA’s demise, and we’re going to talk about that in the context of a column written by the former CEO of GMAC, Sangeet Chauffla, who entitled his essay reports of the MBA’s demise are greatly exaggerated. We’ll explain why he thinks that and what we think of his perspective. And then we want to talk about the aftermath of the Supreme Court decision on affirmative action and how some schools seem to be responding, changing their essay prompts, and getting that things that may help them admit a diverse class in the aftermath of a ban on outright affirmative action. First, let’s talk a little bit about the MBA’s demise. We know, obviously, that we’ve had a few years of declining applications to US. MBA programs, and there have been a number of program closures as well, which is partly the reason why some people might think the bloom is off the rose of the MBA degree, which, as Sangeet points out and this is really true.

[00:01:30.900] – John

It’s the greatest educational innovation of the 20th century because it is, in fact, still the number one graduate degree in America today, despite some decline. His argument is that you need to look at this in a global context. So while residential full time MBA programs in the west have declined and some have fallen to the wayside things in China and India have heated up, schools have gotten better there, and the market has shifted in the same way that the market in the automobile industry shifted from GM to Toyota to Volkswagen to BYD in China. And what we’re seeing here is nothing more than the ebb and flow of the economy and how that changes the dimensions of the demand for the MBA. And at the same time, he’s pointing out, which is something that we’ve pointed out in the past, that if you look at the growth of online MBA programs, you have seen explosive growth in the US. That more than makes up for any possible decline. And in fact, overall enrollment in MBA programs is probably at record levels, given the online MBA phenomena. Maria, what do you make of all this?

[00:02:48.150] – Maria

I think that he makes some really excellent points in his article, so everyone should go check it out, because I think he’s really thoughtful, and I think that it’s easy for people to fall into a pattern of hand wringing over everything. These numbers are down and these numbers are down. But he brings up really good points about the points that you brought up, about the overall numbers going up and just the demand and the locusts shifting more to Asia. The other point that he made that I thought was really insightful was that when a company is growing, it tends to hire MBAs because the MBA has sort of a general management strategic perspective versus when a company is cutting costs. They tend to hire people from the specialized Master’s programs, which are shorter in duration, much more tactical, much more hands on in one specialized area. And that was sort of a differentiation that I had never thought of before. So I think the overall category, I not only think that overall enrollment in MBAs total is probably the same or going up, as you pointed out, but in fact, if you broaden that umbrella to cover graduate education in business related topics, I think it’s overall very strong and will continue to be strong.

[00:04:00.840] – John

Yeah, very true. He makes a point too, and this is kind of interesting, is that for every MBA program in the US. That is closed with 50 to 100 student intakes, they’ve been essentially replaced by programs in the east with 500 to 1000 Cohort programs. Which is true. In fact. Caroline, you’re our global expert. What do you think?

[00:04:24.870] – Caroline

Yeah, I thought it was an excellent article, and I agree that it was a very interesting point, as Maria said, about his distinction of how companies will often recruit MBAs versus specialized masters. And then, of course, it’s true that a lot of those specialized masters are offered by business schools. So business schools have innovated, and they’re offering different programs beyond just the traditional full time MBA programs. So whilst there may be closures of some MBA programs, there are also new programs opening all the time. So it’s not as if there is a demise of the business course sector as such. Definitely not in the US. And I liked his segmentation of the market in how he talked about you have the elite programs in the US. Particularly, that are doing incredibly well and will continue to do incredibly well, and then you have the international programs that are in the one year programs and therefore more attractive to candidates who are looking for a lower cost option, and then you have the online programs. Right? And so there seems to be a sort of segmentation where candidates are choosing one of those three different options.

[00:05:45.470] – Caroline

And if your program doesn’t fall into one of those categories, then, as he says, you may find yourself in the mushy middle, and that’s not a comfortable place to be. And so I think that’s why we have seen the demise of some programs, particularly in the US. Where they struggle to compete with the other options that candidates have now, right. Which they might not have considered in the past. It’s a much more global market than it used to be, or any in the US. Or a much more national market in the US. For candidates who may not consider going abroad, but they may consider other options in the US. Beyond their local area than they might have considered in the past. And so some of those more local options struggle to attract candidates because, for example, why not do a great online program from a prestigious MBA versus choosing a local no name business school MBA option? So I thought that segmentation into those three buckets was quite interesting.

[00:06:51.490] – John

Yeah. And yesterday we had the second day of our online MBA festival. And what’s interesting is we interviewed current students along with admission officials, and many of the students were in that 20 something pocket, which is usually obviously the sweet spot for a full time residential program. And for whatever reason, maybe it’s through the sole earner in their family. Maybe it’s because they just have a job. They don’t want to leave. They’re happy there. They don’t want to go off for a year or two years and would prefer to get the degree online. So you’re also seeing some of this different kinds of segmentation, even in the online MBA market, that’s drawing some people away from the residential full time market. I had to laugh, Caroline, at your use of the word mushy and, of course, your English accent, because it brought me back to the days of stopping by a pub on a road trip in the UK and having fish and chips with those mushy peas.

[00:07:52.970] – Caroline

Mushy peas. I love mushy peas.

[00:07:55.750] – John

There you go. The other thing I think that needs to be pointed out, too, is that we obviously follow very closely and speak most about what I would call the elite programs, the most highly selective programs in the world. And even though in those programs applications may be down, they are still highly selective. Their applicant pools are incredibly deep. It’s very competitive and very hard to get into those schools, which is why Caroline and Maria are in the business that they’re in, helping people get into them because they’re not very easy to get into. And there’s no shortage of demand for programs that have great brands, terrific alumni networks, the best and brightest faculty, and in fact, the best and brightest students. So there is that truth in the marketplace. So when you read the naysayers out there about the decline of the MBA, you got to remember, they may be talking about the closure of a second or third tier MBA program that had 50 people going to it once a year and was in the red. They’re not referring to Harvard, Stanford, Kellogg, Columbia, Dartmouth, et cetera, which is at the high end of the market and still is incredibly strong and robust.

[00:09:19.400] – John

The other thing about business education in general is business schools, I think, have never been stronger, and here’s why. Most schools have capped their undergraduate enrollment. So if they have undergraduate business students, there are so many people who want to major in business today that they can’t accommodate all of them. So in most of the schools, there are limits, quotas that prevent many people who want to major in business from majoring business, because there’s been such an explosion in undergraduate enrollment. And Maria mentioned the specialty masters market. That market has exploded with specialty degrees now in sustainability, in, obviously, supply chain management, which is a very hot topic, business analytics and the traditional finance, accounting, and marketing specialty master’s degrees. Most of the schools out there have a large portfolio of these degrees, and they’re quite popular, and the employment rates out of them are very good. So you look at the overall picture, and business schools probably have never been in a better position. Let’s talk about the Supreme Court’s decision. After the Supreme Court made its decision on affirmative action, we had a podcast and we did an instant analysis. Now we’re seeing more of a market response out there.

[00:10:38.910] – John

Caroline, what are you seeing?

[00:10:40.640] – Caroline

So there have been a number of changes to essays, so some new essays or tweaking of the wording of existing essays. And I found this very interesting because maybe I’m reading too much into the tea leaves, but I do think that a lot of this is in response to that decision. Well, so one obvious change is that HBS has actually taken out a question relating to candidate background. So they have taken out a question that read, we understand that your racial, ethnic, and cultural background may not be fully captured by the above options. So that was referring to the checkbox, right? The racial ethnic checkbox. Please feel free to use the space below to share more about your racial, ethnic, or cultural identity. So they have taken that out. But on the other hand, other schools have asked questions where they seem to be inviting candidates to say more about their background. So it’s interesting that HBS is taking question out and other schools are adding questions in.

[00:11:42.660] – John

And they may be more sensitive to this because the two cases involved Harvard and UNC at the Supreme Court. So they’re probably in the overreaction stage.

[00:11:53.590] – Caroline

Yes, they’re in the hot seat, right? So they probably deleted that pretty quickly. So, number of changes. So I’ve noticed changes at Kellogg, Tuck, Fuqua. I’ll start with Kellogg. So Kellogg has two brand new essay questions. So the first essay asks about so it says, Kellogg leaders are primed to tackle today’s pressing concerns everywhere from the boardroom to their neighborhoods. Tell us about a time in your life where you’ve needed a combination of skills to solve a problem or overcome a challenge. Which skills did you use and what did you accomplish? So I think that the use of the word neighborhoods in there is interesting, right? It’s looking at the context of people’s life experiences beyond work. It’s not just looking for stories about their professional experience. It’s looking at their life experience as well. So I think that’s quite an interesting addition to the wording there. And then essay two is more pointed. So the new question is, at Kellogg, our values are based on research that concludes organizations comprised of leaders with varied backgrounds and perspectives outperform homogeneous ones. How do you believe your personal and professional experiences to date will help to enrich the Kellogg community?

[00:13:21.730] – Caroline

So that’s really looking to tease out stories about how candidates have been in diverse environments or perhaps they have a diverse background. So I think schools are really trying to signal to candidates that they want to know about their background. They want to understand their stories of what has shaped them. They want to really understand their personal story and not just their professional story, and to send a message to candidates that they are committed to building a diverse classroom in the context where they know that candidates know that they are not able to take those checkboxes into account. I think, you know, they have tried to be more explicit in the essay questions to signal to candidates, please tell us your personal stories. Right? And so with Tuck, for example, they have a new question tell us who you are. How have your values and experiences shaped your identity and character? How will your background contribute to the diverse Tuck culture and community? And then they also have a new question describe a time you meaningfully contributed to someone else’s sense of inclusion in your professional or personal community. And CBS has also reintroduced an old question about diversity equity inclusion, which they had dropped, I think, for a couple of years, and they’ve reintroduced that.

[00:14:56.430] – Caroline

So the question is about let me just bring this one up. So the new question is the Phillips Pathway for Inclusive Leadership is a co curricular program designed to ensure that every CBS student develops the skills to become an ethical and inclusive leader. Through PPIL, students attend programming focused on five essential diversity equity inclusion skills. It describes those. Tell us about a time when you were challenged around one of these five skills. Describe the situation, the actions you took, and the that’s, you know, clearly a dei question that was dropped and then has made a comeback. So I think know the schools are looking to signal to candidates that they know they’ve made statements as well, right, right after the ruling came out from the Supreme Court that they remain committed to building a diverse classroom. But I think that they are trying to signal to candidates that they are explicitly looking for those stories from them in their essays because they will be blind to those racial ethnic checkboxes. Right. So they need the candidates to be more explicit in telling them about their backgrounds in those essays.

[00:16:14.910] – John

Right. Caroline, do you think your tea leaf interpretation is on the mark? I think it is. The other thing is, I think people are looking for more detail so that they can admit a diverse class without saying it’s a minority. Right. So, in other words, if you put more emphasis on, and we mentioned this before, income or first generation or you get more information on one’s backgrounds and the adversity that they had faced, it’s more colorblind, but it’s still looking for people who’ve been able to overcome difficulties in a way. Right?

[00:16:52.530] – Caroline

Yeah, that’s right. I think also schools have been preparing the ground for this for some time. And of course, this legal case, I think has been running for like ten years. Right. It’s been running for ages. And so schools knew that they knew that this was going to happen and they knew what the likely outcome was. I was talking with someone from MIT recently and he well, actually, I was talking to him the day the decision came out and he, you know, we’ve been anticipating this. Right. They knew it was going to course, you know, they have a lot to digest because it’s a very complex ruling, it’s a very long ruling and there’s a lot for them to figure out in terms of how they implement this. But I think it’s interesting, MIT last year, they introduced an optional short answer question and I think that that was in anticipation of this decision. So they introduced a question last year which reads, how has the world you come from shaped who you are today? For example, your family, culture, community, all helped to shape aspects of your identity. Please use this opportunity if you would like to share more about your background.

[00:18:05.200] – Caroline

So that’s an optional question. 250 words. Right. So it’s about half a page. So I think that they were anticipating that at some point they’re going to be looking to the essays to learn more about people’s backgrounds because they won’t have access to that checkbox anymore.

[00:18:23.180] – John

Right. Maria, your take.

[00:18:25.490] – Maria

Yeah. In addition to all the changes that Caroline pointed out, there was a subtle thing that I recently, only recently noticed about the Columbia Diversity essay. This was an essay that did exist a few years ago and they brought it back. But I think it’s interesting that there are some little subtle changes to the wording that I think means that the bar is being raised. So I think schools when some of these issues really started to come to the fore of the national consciousness or perhaps international consciousness a few years ago, and schools began sort of introducing some of these diversity essays, it was more around talk about exposure that you’ve had to diverse people. And now I think the bar is getting progressively higher for OK, it’s been a few years now that we are all more aware of these topics. So are you actually doing things about it? So, for example, this is so subtle, but the CBS diversity, the Phillips Pathway for Inclusive Leadership, it used to say, it listed out these five different creating an Inclusive Environment, mitigating Bias and Prejudice, and these sorts of five topics around diversity. And first of all, they’ve updated the language a little bit.

[00:19:38.620] – Maria

So before there were a few opportunities for you to be a little bit more broad. Like one of them was called Managing Difficult Conversations and it’s been changed this year to Managing Intercultural Dialogue. So I think maybe when they first had this question a few years ago, people who had not done anything with people who were different from them were like, oh, a difficult conversation was a time that I told my boss that I wanted to raise. But now they’re making it more specific so that people can’t kind of wiggle out of it. And the core question used to say, tell us about a time you were challenged around one of these five skills and now it’s describe a time where you had the need to utilize one or more of these five skills. So before you were challenged around one of them and now it’s like utilizing to me has a much more proactive connotation. And so I think that they are really trying to raise the bar and I think there are a few other little subtle examples as well. Another school that has changed its essay questions to I believe also incorporate places where people can talk more about their background is Yale.

[00:20:46.130] – Maria

So for years, Yale’s question, they had one question and it was describe the biggest commitment you’ve ever made. And now they’ve got a couple of different options where you can still answer that one if you want. But they gave you an opportunity to talk about a community that you’ve contributed to and learned from and also the biggest challenge that you’ve ever faced or a big challenge that you’ve faced. And so I think that they’re basically opening the door for people to talk about what’s meaningful to them, but just perhaps in slightly different ways. My take on it is that they are still fundamentally the same question. They still want to know what’s important to you but they’re kind of providing different flavors of it so that you can talk about things like coming from let’s being the first in your family to go to college, for example, or coming from a less affluent background, for example.

[00:21:37.710] – John

Right? Yes. And I’m sure that more schools are going to be changing things around a little bit more. Probably we’d see more of an impact next year because in some cases, even though the Supreme Court decision was anticlimactic, everyone assumed that the court would ban affirmative action admissions policies. The full brunt of that and much of the thought about it and how to change admissions policies still lags to some degree. I know some admissions officials who told me they’re having trouble getting real guidance from the legal department about what they can and what they can’t do, just like within weeks before the decision was made. So they felt paralyzed, in fact, to change or do anything about it until a decision was rendered. People could read the decision closely and see if there are other ways that they could sort of get at what they need to get at in crafting a good class. So I would bet the biggest changes will occur in the next admission season when people have had the time to really think about this and figure out, okay, how do we still recruit, admit and enroll a highly diversified class of MBA students?

[00:22:59.450] – John

So we’ll see that, I’m sure, in the next round. Okay, so there you have it. Is the MBA in demise? No. Are business schools in trouble? No. Are business schools changing what they ask of applicants to get a better read on them and make better selections? Yes. All your answers to all the MBA questions are answered here at Business Casual. Thanks for listening. This is John Byrne with Poets and Quants.

Business School News | General | P&Q Podcast "Business Casual"
The Demise Of The MBA + How Schools Are Dealing With The Supreme Court’s Affirmative Action Decision
Maria |
July 26, 2023

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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