The Latest MBA Acceptance Rates
Maria |
May 31, 2023

In this episode of Business Casual our hosts delve into the average acceptance rate for the top ten programs. This has recently reached a new high, indicating a shift in the competitive landscape. However, an intriguing twist arises as the number of students enrolling shows a decline. The yield, measuring the percentage of accepted students who ultimately choose to enroll, has thus noticeably dropped. Business schools are adapting by enrolling smaller class sizes, which is reshaping the dynamics of the MBA landscape.

In this episode, our hosts dig into these stats, highlighting notable examples such as Chicago Booth, where acceptance rates have experienced a significant increase. They aim to provide you with a comprehensive understanding of the ever-changing world of MBA acceptance rates and its implications for both applicants and business schools.

Get ready for insights that will reshape your perspective on the journey to your MBA!

Episode Transcript

[00:00:07.130] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co hosts Maria Wich Vila and Caroline Diarte Edwards. Caroline, of course, is the former admissions head at INSEAD and the co-founder of Fortuna Admissions. And Maria is the founder of Applicant Lab and our resident Harvard MBA. We’re going to talk about acceptance rates. We just ran a story on acceptance rates in last year would be, of course, because we don’t know what the numbers are going to be for this coming year because no one has applied yet, really. And these are us. MBA. Programs that we really looked at. And one of the really interesting things is that the better school saw fairly significant drops in their acceptance rates. Just to give you a quick snapshot of what happened is last year for the top ten US MBA. Programs, the overall average acceptance rate was 22.2%. That’s up from 18.4 the year before, and it’s way up from 14.5 back in 20, 16, 17 years ago. More people are being accepted, and yet yield, that is, the number of people who actually accept an offer and enroll in a school is down.

[00:01:38.510] – John

It’s down to 54% in 2022. Last year. The year before that, it was nearly 58%. And going back a few years back in 2018, for example, it was 65%. So one result of this is that schools have enrolled smaller classes. Many of the best schools, in fact, entered cohorts that were 50 to 40 students less than the year before. And in terms of schools and their actual application acceptance rates, well, Chicago Booth, for example, is an interesting one. The acceptance rate there grew to 30.1% from 22.6. That’s an increase of a third. That was the biggest jump in the admin rate for any top ten school. So, Maria, what do you make of these numbers?

[00:02:33.490] – Maria

It’s funny, I almost want to stop saying things like, well, last year sure was an anomaly because every year for the past three years has just been a more anomalous anomaly than the anomaly before. What I think might have happened last year, just off the top of my head, why were the acceptance rates so much higher? Well, it’s because the number of applicants was lower. And I think that it’s because last year, 2022, the world was, quote unquote, reopening again. A lot of businesses were going back to you have to start coming back into the office. We’re going to start gearing up again to sort of pre pandemic working styles and workloads. And I think a lot of employers, realizing that a lot of talent was not into going back to work, they started sweetening the deal by offering retention bonuses or salary increases. Right. Because the war for talent at some point last year was really a top of mind thing for a lot of companies. And so I think a younger person considering business school might say, well, gee, I was going to go to business school to get an X percent increase in my salary or to get that promotion to that higher level of management.

[00:03:51.390] – Maria

But my employer just offered that to me anyway, if I stick around. So why would I forego a year or two of salary? And why would I do the tuition? I think a lot of people were getting, if not post MBA equivalent job opportunities. They were certainly getting much sweeter job opportunities than what they had had before. And so I think in that environment, looking at the MBA versus staying in your normal job, I think that the MBA lost its luster. And so that’s why I suspect the numbers were down.

[00:04:21.480] – John

Yes. Caroline, your take.

[00:04:23.780] – Caroline

Yes, I agree. So I think that it was a combination of factors. So post Pandemic, as Maria said, a more favorable job market, which means that it’s a less attractive environment for people to quit their job and go back to graduate education. So we know that the MBA market is countercyclical and people are more inclined to head to business school when the job market is not so great, because that could be a good time. If you’ve been laid off or you’re not getting a promotion that you were hoping for, you’re not getting the next job offer that you were hoping for, that could be a great time to go back to business school. And conversely, if you are getting those opportunities, then you may be less inclined to quit and invest in your education at that particular time. So I think it was a combination of the strength of the job market, which has since weakened, of course, but also we did see a deluge of applications during the Pandemic, and so I think it was a hangover after that. The MBA market is cyclical.

[00:05:27.750] – Maria

Right?

[00:05:28.350] – Caroline

I saw that at NCI. Looking at the application volume over the decades, there are cycles that correlate with the economic cycle. The Pandemic was an unprecedented shock, which created just turned on a tap of applications which we’d never seen before. And so some of those people might have applied a year or two later. Has the pandemic not happened?

[00:05:54.560] – Maria

Right.

[00:05:54.850] – Caroline

So effectively, you pulled forward some candidates to a certain point in time, and they applied during that period, whereas they might have applied a year or two later had the pandemic not happened. And so they weren’t applying last year. Right. They were applying the year before because of those particular circumstances. The pipeline had diminished because of that effect. But I do think that the pipeline is now increasing. So I think that these numbers will turn around a bit for this year when we see the next round of statistics from the schools.

[00:06:32.890] – John

Yeah, and I think these numbers confirm what we had been saying all along during last season’s admission cycle, that now is the time to apply because fewer people are actually applying to business school. And I think it needs to be pointed out that, let’s face it, it’s still not easy to get into a great school. So, sure, at Stanford, the Admin rate went from 6.2 to 8.6. Big deal. There’s an awful lot of people who are getting rejection slips with an 8.6 acceptance rate. And at Harvard, 12.6 the year before, and now it’s 14.4. So over 85% of the people who applied the Harvard Business School last year got rejected. And the same is true at MIT, where the admit rate was 14.8%, almost equal to Harvard, and it had been 12.1% the year earlier. So, yes, these rates are up in some places. They’re up a lot more, like a Chicago booth, which I mentioned before, was 23 and has over 30, or a Kellogg, which was 26 and now is over 31. But by and large, it’s still hard to get into these schools. You still need really good application with a good profile to surmount the odds because you are in a very competitive place.

[00:08:03.050] – John

One of the weird things about the data that we’ve discovered is that many of, like, the second tier schools actually became more selective. And I’m not sure why that would be so, but if you look at a number of schools, including Rochester Simon, their acceptance rate actually went down, which I would not have expected. Indiana Kelly, their acceptance rate went down. So Emory went from 53% to 37%, washington Olin in St. Louis from 34 to 26. So it’s not all down. And you wonder how come the second tier schools, many of them actually had lower acceptance rate. I know that, of course, class size has shrunk, so that had played a role in this. But Maria, can you guess as to why this would be the case?

[00:09:06.510] – Maria

I mean, if I had to guess, I would say maybe what happened is that perhaps people who were applying really were committed to the process, and maybe they decided that they were going to try to spread the risk around instead of only applying to one or two programs. Maybe they said, well, I’m going to also throw in applications to an Emory or Washington Olin in order to just be sure that I’m spreading my risk. And so perhaps those schools saw some increases in applicants along with what you mentioned before. I do know that some schools were talking about and in fact implemented smaller class sizes in anticipation of lower applicant numbers. So it could also be some combination of those two things. But it’ll be fascinating. I’m not sure, maybe you, John, someone on your team, one of your intrepid detectives on your staff, can start digging around and really trying to get to the bottom of this, because it really was when Caroline mentioned that, it was quite an observation. And I was like, wow, that’s surprising.

[00:10:09.400] – John

You look at Rutgers, 44% the year before and down to 26%. Now that’s a real head scrub. Now, I wonder if in fact, in 21, because of what happened in 2020, with COVID and many international students unable to start the program because of visa restrictions or travel restrictions, schools just really bumped up their acceptance rates in 2021 and then brought them back to a more normal state in 2022. At least the second tier schools. That could be one possibility, but wow, that is just a weird, weird state of affairs. Caroline, do you have any explanation for it?

[00:10:56.260] – Caroline

Yeah, I think we’d need to look at the longer term trend. Right. As you say, John, we’re looking at acceptance rates for 2021 versus 2022, and so we don’t have that pre pandemic data to compare it to. And it may be possibly that they were harder hit by the Pandemic than the very top schools. And so now that they’ve recovered, their acceptance rates have gone back possibly to the level that they were pre pandemic. So I think we need to dig into that pre pandemic data. But I’m glad that you asked, Maria, before you ask me.

[00:11:38.110] – Maria

You’re welcome, Caroline, anytime.

[00:11:43.970] – John

Let’s attribute it to smaller class size and let’s attribute it to an overcorrection on the Pandemic affected admission cycles in 2021. I think that can only be the possible explanation. But then why would the top ten in the best schools in a ranking at least have the opposite effect? And that is just weird. Just totally weird. That’s just amazing. So what do we expect in this coming year? Because many of our listeners are busy preparing their applications for round one, which will come soon enough in September, or they’re about to begin once they take a little break for their summer. What do you think is going to happen, Caroline?

[00:12:33.640] – Caroline

I think we’ll see an increase in applications in the coming season due to particularly layoffs in various industries, particularly finance and tech. So we’ve seen an increase in inquiries this year compared to last year. So I think that’s indicative of a turnaround in the market that started to happen around the very end of last year. So I think it’s very much linked to the job market and firms that employ young professionals who are very ambitious and potentially very good candidates for business school, who have hit tougher times and therefore have been laying people off or not able to offer them the opportunities that those young professionals would otherwise hope for. And therefore, now is a great time for them to apply to business school.

[00:13:24.500] – Maria

Maria, I almost don’t want to make a prediction because every time I predict something, I’m like, well, we’ve been talking we’ve been talking about a recession now, right? Remember it was like, oh, there’s going to be a recession in 2022, and then it didn’t really happen, but then it sort of started happening, but it happened too late to really impact applications. So I don’t know, I think that it’ll go up again, as Caroline said, because I do think that we are starting to see substantial layoff. I think the ones in the smaller regional banks that are struggling in the wake of Silicon Valley bank collapse, and perhaps some of those banks might be shedding employees who might not be easily able to find other work. In particular, I know a lot of tech people have also been laid off, but there do tend to be maybe not first choice type jobs, but tech. Tech employees, I think, do often tend to find work a little bit more easily perhaps than someone perhaps working at a smaller regional bank. I also think not to segue the conversation, but I also wonder if the release of the newer GMAT, the GMAT Lite, might help.

[00:14:29.030] – Maria

And I think, John, you might have to key this up for you, but I think you mentioned that GRE is also responding with perhaps a shorter version of the test. I wonder if less onerous testing options that are being announced right now might start enticing people into the application process. Because as we know, oftentimes the thing that tends to dissuade people the most is the thought of either taking the test or spending the dozens or hundreds of hours it takes to prepare for the test.

[00:14:59.070] – John

Yeah, that’s really interesting. So the GRE is really going to be cut down dramatically, just as the GMAT was. But the GRE test will now take less than 2 hours to complete, which is roughly half the time of the current test. GRE is removing the analyze an argument task in the analytical writing section. It’s reducing the number of questions in the quant and verbal reasoning sections, and it’s removing the unscored section of the test. Among other things, they’re going to promise to give test takers their official scores in just eight to ten days. Previously it was ten to 15. In other words, they’re really trying to reduce the friction of taking the test and applying to a business school. And that also should have, to some degree, some effect on people applying because the general belief is that standardized tests does hold people back because it takes longer for them to have to prep to get a good score. And as we know, for years the scores have been going up in the class profiles. So even though you have some schools that are test optional or some schools granting waivers, still most of the highly ranked, highly selected schools still require standardized test.

[00:16:24.410] – John

The fact that it’s going to be easier to take it and incidentally, presumably easier to study for it since it’s not as long, could actually open the doors to a lot more potential applicants. Caroline, you think that’s true too?

[00:16:39.380] – Caroline

Well, I’m sure that’s what the test administrators are hoping for in terms of turning around the test volumes. And I’m sure that’s the hope of the schools as well, that it will make it easier for people to tackle the test and therefore lower that barrier to entry to applying.

[00:16:58.860] – John

Yeah, interesting.

[00:16:59.930] – Caroline

Yeah, it seems probable, right? So it looks like it would be less intimidating as a test. So hopefully that would encourage more people to apply.

[00:17:12.330] – John

And the GRE, the shorter GRE will be available to actually take and sit down on September 22. So I believe that actually beats GMAT to market because I think the shorter GMAT test is while you can register for it by then, it might take until the fourth quarter to actually come about. Wow, interesting stuff. I, too expect applications to go up, but not by a lot. I think that the layoffs will put more people in the market for graduate degrees. And while some of them can bounce back quickly from a tech layoff, I think the layoffs have now gone through the entire economy. So you’re seeing more people who are in that perfect window of age, 25 to 28, who may have lost their job. Or the other thing that happens when you see layoffs is people who are in the workforce and doing okay start to think about, well, look, this company has very little loyalty to people that it hires, and next time it could well be me, so I’m going to go out and get some protection through a graduate degree. And we know from the research that people who have higher level degrees tend to be laid off a lot less than those who don’t.

[00:18:45.410] – John

So even if you’re not laid off, there’s also an impact psychologically on those who keep their jobs and then become more willing to go and quit and get a graduate degree almost as insurance for their future careers. So I think we’ll see an increase. I don’t think it’s going to be really dramatic because we don’t have, at least until now, thank goodness, a full fledged recession, which is what really typically drives a significant increase in applications. But it will probably become slightly more competitive next year as we enter this new admission season in September. Well, there you have it. If you want the nitty gritty detail on those acceptance rates as well as yield, which I find fascinating. I didn’t mention this, but this is worth mentioning. A year earlier, Stanford for the first time, had a better yield rate, significantly better than Harvard. Harvard bounced back and had a yield rate this past year that was better than Stanford’s, actually, significantly better. And yield is something that admissions directors really look at closely. Am I right, Caroline?

[00:20:02.260] – Caroline

Absolutely. Schools work very hard to increase their yield, and they monitor it very carefully because, of course, fluctuations in the yields make it very difficult to craft the class. Because if you have wild variations in your yield, how do you know how many students to admit to your class? And of course, if you’re admitting people, you really want them to attend your school and not go to your competitor school, and you want to admit the best people have the best students from your pool coming to your program and not deciding to go elsewhere. So schools have greatly increased their efforts to woo their admitted candidates and make sure that they attend their program and that they don’t go somewhere else. Yes. So they do monitor that yield. That is a critical KPI for the admissions office.

[00:20:52.050] – John

And at Harvard last year, the yield was 85.5%, which meant that only 15% of the people who actually were accepted decided not to go. In some cases, that’s for personal reasons. Something crops up, you get an immediate increase in responsibility or a new assignment that you really want to fulfill. Decide at the last moment, no, I’m not going to go. Or maybe there’s an illness or something. Or maybe the most plausible reason, of course, is you were accepted by another school that you preferred over the one that accepted you. And at Stanford, incidentally, it was 80.3. So 85.5 at Harvard, 80.3 at Stanford. Yale, interestingly enough, is 38.8, which just shows you a lot of people who are applying to Yale are also applying the Harvard, Stanford, MIT and other schools. And when they get in, they seem to prefer those schools for whatever reason. Fascinating numbers, though. Tells you a lot about where schools are, who’s in demand, who’s not. And I love these numbers and eat them up because I’m in the weeds. I’m a little bit of a nerd about all this stuff, frankly. So, Caroline and Maria, thank you so much for your analysis.

[00:22:15.710] – John

And for all of you out there, good luck applying. While these rates may go up a little bit next year, we don’t think they’re going to go up a whole lot, so that probably bodes somewhat well for many of you. Good luck.

Business School News | General | P&Q Podcast "Business Casual"
The Latest MBA Acceptance Rates
Maria |
May 31, 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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