The Economist Walks From MBA Rankings
Maria |
July 20, 2022

After several years on the market, The Economist has officially bid goodbye to its business school rankings. Many people are aware that they have received a great deal of criticism, particularly from our hosts from Business Casual, John, Maria, and Caroline. This criticism has primarily been directed at them because their rankings are  unpredictable and inconsistent with any accepted method of ranking business schools.

Now the question is, given their track record on these rankings, which did not speak well of the prestige and authority of the brand that they represent, will they be missed or does the business school community, which they have persistently undervalued, have a bit to celebrate?

Listen to this week’s episode of Business Casual to hear what the team thinks!

Episode Transcript

[00:00:07.510] – John

Hello, everyone. Welcome back to Business Casual, our weekly podcast that examines the business school community and world and business school programs. This is John Byrne with Poets and Quants.

 

[00:00:19.610] – John

I’m here with my co host Caroline Diarte Edwards, who is a co founder of Fortuna Admissions, and Maria Wich Vila, who is the founder of ApplicantLab. The big news we want to discuss is The Economist decision to abandon business school rankings. The Economist announced that it will no longer rank MBA programs, executive MBA programs, and Master in Management programs, starting immediately. The magazine said it was withdrawing from the market primarily for commercial reasons.

 

[00:00:54.470] – John

Many know that The Economist ranking has been subject to incredible criticism. The results from year to year are very flaky, inconsistent, unpredictable, and unjustifiable by any standard. So there’s no question that these rankings did not reflect well on the prestige and the authority of The Economist brand, which is truly one of the most esteemed media brands in the world and engages an incredible audience of decision makers and influencers throughout the world.

 

[00:01:33.560] – John

And so I imagine there’d be a fair bit of celebration among business school deans, associate deans, admission directors, career management people in the business school community who look at this ranking and say, this is nuts. It’s crazy. And after all, if you even look. At the latest ranking that was published not all that long ago, this year. INSEAD, London Business School, Oxford, Cambridge, IE Business School, and Imperial College London all decided, we’re not going to play this game anymore. We’re not going to even be involved in it, and decided not to participate with the ranking, which, of course, further eroded what little credibility it had in the marketplace. I wonder what my two critics of rankings, Maria and Caroline, think of the Economist’s decision and whether there are some mixed feelings about the decision by this magazine to walk away from the market.

 

[00:02:30.450] – John

Caroline?

 

[00:02:31.440] – Caroline

Well, my first reaction when I saw the pinky news flash about this was, oh, thank God, and how did it possibly take them so many years to realize how shoddy this ranking was? I’m a huge fan of The Economist, right? I mean, I’ve been a subscriber for years. I’m a huge fan of the organization and the quality of the journalism it produces. And it was just tremendously frustrating to see this, frankly, crap being turned out year by year, and how could they not realize how bad it was? And when I was in Sierra, I was responsible for putting together the data and liaison with the rankings organizations and providing the submissions from INSEAD. I spent a lot of time on that, and it’s not a fun thing for schools to have to deal with. And it’s incredibly frustrating that we would generally do incredibly badly in that ranking. And I think there was a lot of bad data going into the ranking from some schools that also led to the volatile results. We always play those games very straight at in Sierra, so felt that it wasn’t particularly fair because I’m not sure that everyone was playing game fairly, because some organizations are much more careful about the methodology and the quality of the data.

 

[00:04:01.040] – Caroline

Right? So FT audits the data periodically. They go around all of the schools every so often and audit the data. It’s a pretty thorough process, and organizations like the Economists never did that. And I think there were a lot of question marks about the quality of some of the data that was being used. And it’s extremely frustrating for the schools to see the brand and knowing that obviously didn’t truly reflect the quality of the program. But some people will look at that and think, oh, wow, INSEAD is number 30. They’ve really gone down the drain, haven’t they? And occasionally you have to explain that, and you have to explain to people. People are coming. As you know, with the business school market, every year there is a new generation, a new class of people who are starting to learn about business schools, and they’re new to this, and they’re learning about it. And they might stumble upon The Economist MBA ranking, and that might be the first thing that they read about. And then you have to explain to them why INSEAD is not really one of the worst business schools in the world, and you have to explain your opinion of the ranking and some of the history behind that.

 

[00:05:26.180] – Caroline

And it’s just very frustrating for people at the school to have to deal with that. So my initial reaction was, well, thank God, I can’t believe it’s taken them this long to do something about it.

 

[00:05:38.900] – John

Yeah, that’s really true, Maria.

 

[00:05:41.580] – Maria

My first reaction was, we did it, guys.

 

[00:05:47.370] – John

We’ve been pretty harsh critics, let’s face it.

 

[00:05:50.360] – Maria

We have trashed these guys year after year, rightfully so, for, I think, the reasons that Caroline mentioned. And I think, Caroline, I really have a lot of sympathy for the position that you were probably in in those days, because it’s very hard to explain to a prospective candidate why that ranking is garbage without sounding defensive, without sounding like you’re trying to overcompensate for something, but it really is a garbage ranking. And our fellow our resident diplomat here just used the word crap a few minutes ago, which is, I think, the first time I’ve ever heard of you say something that is not completely proper and prim, which is really quite a treat for me. No, I think this is wonderful. It is embarrassing for The Economist. Frankly. As a publication that a publication of its caliber. And it’s so meticulous and it’s so sophisticated and rigorous in its analyses in every other topic in the world. That when it comes to judging business schools. Which you would think might be a pretty strong source of interest for a number of its younger readers. It was just so weird that they really just did not. They kind of made it up and it just led to all these weird results year after year.

 

[00:07:11.630] – Maria

I guess if I were to look at a silver lining, is that I think The Economist could use this as an opportunity to maybe completely redo the world of rankings. Maybe they could say, okay, everyone else does this thing where they find different factors and they rank each factor, they give it a waiting and we are going to completely reinvent it. But it is kind of funny. I think people who go to business school and people who go to economics graduate school are kind of very different people and I think MBA types would have a little chuckle and say that this is very emblematic of how an economist thinks, which is not necessarily real world useful versus the way an MBA thinks, which is far more pragmatic in the real world.

 

[00:07:56.900] – John

Yeah, definitely true. And the latest list, let’s admit it was an unmitigated disaster. You have Stanford and 8th place Chicago Booth, which incidentally had been a number one MBA program according to The Economist, in 2018 and 2019 was 9th. You have Owen Business School at Washington University, which is a very good school, but it actually got its highest rank ever, 19th ahead of UCLA Cornell and UT Austin. The year before it was in 2019. Actually it was 41st. And you would go back to why the INSEAD and London Business School just didn’t want to have anything to do with it. The two giants of European business education, The Economist would routinely rank them very poorly, particularly in comparison to the Financial Times. Good example. And the last time the INSEAD participated in The Economist ranking was posted 22nd, 19 places below its current Financial Times rank. LBS was 20 517 spots under its current Ft range. And even if you look over the 18 separate rankings that The Economist has done dating back to many years when it started, neither school, LBS or c has ever ranked first. And INSEAD has only managed to rank in the top ten once in all those years.

 

[00:09:32.730] – John

So there is plenty of disaffection by very important players who believe that The Economists undermine their quality. And so I get it, but I do think we’re going to lose something. And here’s what we’re going to lose business schools have long had a love hate relationship with rankings and it’s understandable why they would when you’re ranked low. And there are these questions from applicants and faculty and alumni that are annoying to answer because oftentimes you can’t explain why a school goes down because there’s so little transparency to the rankings, it’s hard to understand what’s going on. And the truth is, the differences between and among these schools is so slight that the results underlying the numerical rank are highly clustered together and have no statistical meaning when you put an actual number against the program. So I totally get it. But here’s the deal. The Economist is a prestigious and authoritative publication. It is read and engaged with by decision makers and influencers all over the world in the fields of economy, business and public policy. The fact that it devoted its resources to pumping out these three rankings every year really telegraph to its readers that business education is important, it’s worthwhile, and there is a good being served to society no matter where your school ranks.

 

[00:11:05.570] – John

The fact that The Economist believes these schools deserve its attention on a regular basis and devotes formidable resources to get these rankings published is a sign that business schools matter. Business education is important, and I think it does make people put business school education in their consideration set. It’s a reminder that there’s value here, and boy, should I go and get this degree, should I upskill? Should I enhance my ability to lead others and enhance my understanding of global business? Should I go and acquire that network of people who will support me and I will learn from throughout the rest of my life? Yes. That’s what the Economist ranking does. When you separate the actual results from the greater meaning, the greater context of what The Economist and premature puts on the business of graduate management education. So on that level, I think we lose something. I wish that The Economist instead said, look, we’ve been publishing crap. It’s beneath our brand, it is shoddy, and we need to fix it. And here’s how we can fix it, and here’s how we can also differentiate what we’re doing from what other rankings are doing and therefore add value in the marketplace.

 

[00:12:32.270] – John

I wish that The Economist had taken that approach as opposed to just walking away. Caroline, don’t you think we lose something here?

 

[00:12:39.140] – Caroline

Yeah, I guess if you take the perspective that no publicity is bad publicity, then it is a bad thing. Although I think Prince Andrew might disagree with that philosophy. But it’s true that The Economist is such a waste publication, as you point out. It’s read by so many decision makers around the world, and it’s often read by ambitious young people. It’s often read by students right around the world. So it does have influence. And the attention that it brings to business school, I’m sure, in some way was helpful, as you say. It boggles my mind that they let the state affairs continue for so many years and they didn’t do something about it, and they didn’t turn things around. As Maria said, they are known for the quality of their analysis and the rigor, and it’s a big organization, so how on earth could they not have sorted this out? I don’t know. How many years has this ranking been going on for? I don’t even know how many years it’s been going on for, but it seems like it’s a very long time.

 

[00:13:53.510] – John

Yeah, I think it’s about 18 years, maybe, something like that.

 

[00:13:57.030] – Caroline

Right? Yeah. I mean, it’s a long time, right, to be turning out rubbish for an organization like The Economist. So I think it’s rather shabby that they didn’t sort it out a long time ago.

 

[00:14:09.410] – John

Yeah, I think one of the things that your colleague Matt Simon said to me in my obituary for The Economist ranking is that they did include many international business schools from Canada and Latin America to Europe and Middle East and Asia that were not in the Ft ranking and gave, therefore would be students more wide-ranging    worldwide study opportunities and attention, which is helpful. And the fact that they had an alternative to the FT’s Masters in Management ranking, that’s also helpful. And they took a global perspective, which, as we know, US. News, which is the predominant ranking that many watch in the US. And many people who are bound for the US. For graduate education look at, is totally US centric in that sense. It pretends that there is no other world other than the US. Still, Bloomberg Business Week from one ranking to the next changes it’s mine. But typically ranks schools that are not in the US separately. Forbes ranks them separately as well. So the Ft and the economists were the only two that had true global rankings. The other thing about the economy and this was both, I think one of the things that ended up killing it and one of the things that kind of made it special was they paid a lot of attention to student opinion of the academic experience.

 

[00:15:43.490] – John

And the problem was the small sample sizes made those responses not credible and led to a lot of the volatility in the ranking. But nonetheless, there are problems when you survey the latest graduates, including the cheerleading problem that you have, where no one wants to undermine their own school and a ranking. So even if they had reservations about the experience, they might hide them from the answers in the survey. But generally, over time, over many classes, you do get to some general period of level of truth in the student surveys. So that will be gone. And there was some value in saying, hey, we think the faculty were outstanding and seller and consistent throughout. And in other schools that was not true. But we think the quality of the educational experience we received in the MBA program was top notch. Or not, or not quite top notch. Seeing those answers was helpful. And the problem, the sample size being so small and so unpredictable, led to crazy, ridiculous results. But I think we’ll miss some of that as well. Maria, last words on this.

 

[00:17:02.310] – Maria

Don’t say rest in peace. Yes, rest in peace. We hardly knew ye. No, you just said some really nice things about all the stuff that they did and the benefits they brought. But I continue to think, sorry, guys. Garbage in, garbage out. I really think this ranking, the subjective piece of it, it’s true it’s wonderful to get the opinions of people who have gone through the program because they’re going to know it best. The problem is that most people get one MBA in their lives, so how do they know what to compare it to? They might say, well, this faculty was amazing, but maybe if they would have gone to a different school, the faculty would have been even better. And I don’t know, it’s so weird. Like, for example, just really quickly, 25% of their ranking was this student quality indicator, and number two was International University of Monaco. I would love to study a business in Monaco, but you look at that and you’re like, is it possible that maybe it doesn’t pass the rational test? So, yeah, I mean, did it maybe help get some new attention to University of Monaco? Probably.

 

[00:18:14.530] – Maria

But it also doesn’t exactly help a legitimate candidate who is really lost, new to the process and looking for truly helpful criteria upon which to gauge a business school. Monica would be great, but yeah, come on, guys.

 

[00:18:31.560] – John

Very true. No doubt about that. Caroline, your last words on this?

 

[00:18:37.190] – Caroline

Yeah, I mean, it was really an embarrassment. It was a huge source of frustration for me. I do think it’s a shame they didn’t try to turn things around. Maybe this is an opportunity for Poets and Quants. John. You created the Business Week ranking. Maybe you need to maybe you need to replace this.

 

[00:19:06.790] – John

And I do recognize that it is a dubious distinction, to be sure. But being the person who created the first full time, regularly published ranking back in 1988 at Business Week, it takes a lot of effort and a lot of work to do this with journalistic integrity and transparency. It’s a monumental effort to create a ranking that adds some value to the marketplace, and it’s useful to a prospective student. And that’s why it’s easy to be for us all, especially me, to be the armchair critic of the Sunday morning quarterback kind of person. Monday morning quarterback, rather. And it’s so much harder to actually do it. And I can get that. It would have been a mountain to climb for The Economist editors to fix it. And the other problem, I think, for The Economist was how it did the ranking. The people who did the rankings for the business schools were not the people who covered business schools. The longtime editor of the ranking, Bill Ridges, did all the other rankings and lists that The Economist did. So he wasn’t fully invested in a way that someone who covers schools regularly, day in and day out, really knows the territory, has visited the schools, and had a deeper understanding of the true benefits of a business education and how to measure try to measure quality.

 

[00:20:39.060] – John

Try I would say not measure actual quality, because that’s almost impossible. I think that divorce between those who cover the industry and those who rank the industry ultimately leads to an inferior ranking. And I think that that has long been the economist Achilles heel on these rankings. If they had someone who, day in and day out, covered the business schools, met with deans, met with students, met with faculty, knew the industry day in and day out, and then allowed those judgments and understanding to inform a new and better ranking, the result would have been very different than what it has been. So rest in peace, economist ranking. We will miss you, but we may not miss you all that much. All right, Caroline Maria, thank you very much again for your incredible insights and views. And for all of you out there, thanks for listening. This is John Byrne with Poets and Quants. You’ve been listening to Business Casual, our weekly podcast.

 

Business School News | General | P&Q Podcast "Business Casual"
The Economist Walks From MBA Rankings
Maria |
July 20, 2022

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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