In a deep dive into a recent GMAC report, John Byrne, Maria Wich-Vila, and Caroline Diarte Edwards explore the dramatic decline in international applications to U.S. business schools linked to the Trump administration. Dubbed “The Great Rerouting of Global Business Talent,” the report highlights a significant shift in interest among international students, particularly from major talent sources like India and China. With a 45% drop in U.S. enrollment from Indian students alone, the global education landscape is poised for a shake-up.

Maria emphasizes the severity of the situation, noting it’s not just rhetoric but concrete policy changes leading to challenges like visa delays. The ripple effect of these policies is clear: the U.S. is losing appeal, while countries in Western Europe and Asia gain ground. For domestic applicants, however, this could translate to better odds of admission as schools dig deeper into the applicant pool.

Caroline shares mixed feelings, acknowledging the negative impact on U.S. institutions while Europe stands to benefit. The situation underscores a broader trend: as geopolitical climates shift, so too do the dynamics of global education. For MBA hopefuls, understanding these trends is crucial as they navigate their application strategies in an evolving educational landscape.

Episode Transcript

Note: This transcript was generated by AI and may contain minor inaccuracies.

[00:00:06] – John

Well, hello there. This is John Byrne, Poets of Quants. Welcome to business Casual, our weekly podcast with my co-host, Caroline Diarte Edwards and Maria Wich-Vila. We are going to talk about a brand new report on applicants to graduate business education programs from the Graduate Management Admission Council. You GMAC, which is the administrator of the GMAT test, probably does the best research out there on application trends and admissions for people who are interested in getting a graduate degree in business, whether it be an MBA or a specialty master’s degree. This report is entitled The Great Rerouting of Global Business Talent. It was just issued. We’ve just written about it. The headline will tell you a lot, Trump Effect: 40% of international candidates now are less likely to study in the US. That comes from data that they’ve gathered from people who intend to apply to a graduate management program within the next year or two years. And that data was collected before the world saw the videos of of immigration officials in Minneapolis beating up people on the streets and killing two American citizens. So you can only imagine that this is only the beginning of the decline.

[00:01:45] – John

We’ve noted earlier that international applications are already plunging in this cycle and that the processing delays on student visas and other things that occurred in the early days of the Trump administration led many schools to have problems bringing all of their international admits over in time to start last fall. And this report gives you basically good numbers about it. It says that in August of 2025, total new international enrollments across US higher education fell by 19% year over year. But there’s some really dramatic increases increases in that decline. Among students from India, for example, which we know is the single largest pipeline into most MBA programs, the drop in the US, 45% in enrollment from Indian applicants and prospective students. Declines are also recorded from China, South Korea, Iran, Syria, and Nigeria. China and Nigeria, incidentally, pretty significant suppliers of talent to US business schools. That’s pretty dramatic. I can only imagine how it’s going to be a year from now because obviously, all this data is reflective of 2025. When you’re going to look at the real impact, it’s going to really be a hard felt. What this all means Of course, is what we’ve said before, domestic applicants and those who want to shoulder whatever risk is involved in coming to the US in particular, in the near future, you’ll have greater odds of success because frankly, there’s going to be far fewer applicants to compete against.

[00:03:51] – John

All schools, no matter where they are in the totem pole of whatever ranking you look at, are going to have to dig deeper in the applicant pool to fill their classes. I would suspect that some will actually decrease the size of their incoming classes this fall, probably. Maria, what do you How did you make of this?

[00:04:17] – Maria

I mean, it’s shocking in terms of its magnitude, but it’s not surprising that it’s happening. I mean, the rhetoric has been loud and it has been aggressive, and it has also been paired with policy moods, problems getting student visas last summer, et cetera. It’s not just about the bark and the bite. It’s not just that he’s spewing this rhetoric, but not actually following through with it. No, there are real risks. I think we’re seeing that play out, and I think it’s just the tip of the iceberg. This report, once again, GMAC knocks it out of the park with some fascinating research. Your article covers a lot of it, and the report itself has so much interesting information in it. There’s one chart that shows that actually in the months immediately after the election of 2024, there was actually increased. There was more likely to pursue, or significantly more likely to pursue, education in the US for about a couple of months. Then after February of 2025, in March of 2025, was when all of a sudden we started seeing this really dramatic It went from 30% of people either more or significantly more likely to pursue graduate education in the US to 8%.

[00:05:37] – Maria

Then that also, of course, was mirrored with the parallel now increasing lack of interest. I mean, America’s loss is going to be other countries’ gain. I think we’re just going to have to hold on for a bumpy ride ahead.

[00:05:55] – John

Yeah, the report does show, in fact, that there’s increases in Western Europe and Asia, also big decreases in Canada, really severe decrease in Canada, and we’ll get into that as well. Now, Caroline is a big fan of the European program, so you got to be cheering this on, right?

[00:06:18] – Caroline

Well, I live in California, so I’m an American citizen as well as a British citizen, so I’m not thrilled to see the negative impact for the US institutions. I would rather that it was a rising tide for everybody. So, yeah, it’s really bad news for the US. I think it’s a combination of bad policy, the mess last year with the student visas, which was very disruptive to, of course, some students to not be able to start their studies on time, and there was a lot of concern about how that would play out over time. The H-1B visa is under threat, and policy hasn’t yet changed. But of course, people are very concerned about the risk of investing a huge amount in a US education and then not being able to work in the US. And that completely changes the the ROI calculation. And combined with a perceived unwelcoming climate, as you mentioned, the headlines have been incredibly negative in terms of PR for the US internationally. So I think many families, especially from countries from India and Asia and so on, and even Latin America, those families would be reluctant, quite frankly, to send their kids to the US.

[00:07:54] – Caroline

And at the same time, who has to come to the US as an international candidate? There are great alternatives internationally. So fantastic programs in Europe, and some of which are benefiting from the decline in the US. And then, of course, Asian programs programs which have really established themselves as serious players and as serious alternatives to top international programs. And so I think more of the Asian candidates are considering local options, which offer fantastic programs. And at the same time, you’ve got growing economy in countries like India. So candidates can consider staying domestically, getting a great job when they graduate, and getting good return on their investment by staying local in a way that perhaps they wouldn’t have considered 10 or 20 years ago. So it’s a very bad scenario for the US, where the US has shot itself in the foot, and candidates are voting with their feet, because why come here if you have concerns about the US as well as great alternatives elsewhere?

[00:09:15] – John

Yeah, and the cost is high. I mean, come to the US because of the tuition and the opportunity costs for a two-year MBA program, especially if you don’t think you’re going to be able to get a job in the US, Which, of course, would pay much more than, let’s say, a job in India. If you had to return to India with a US MBA not getting a major discount on the tuition, you’re going to be paying debt off for an awfully long time, and that’s just not going to work for you. The decline in Canada is the result of an introduction of a student enrollment cap on internationals that went into effect in January of 2024, which then led to sharp drops in study study permit applications and approvals across every single education level. In fact, new enrollments even fell well below the cap that was set by the government of Canada. The cap in 2024 was roughly 360,000 new study permits, and that would include undergraduates as well. But that was a 35% drop from the previous year in 2023, and it’s since moved to extend and tighten those limits through 2027. Canada has become less a destination for international students as well.

[00:10:41] – John

And applications and enrollment at the United Kingdom for international students also down, not as severely as Canada or the US, in fact. And that’s a function of a one change that was made. Of course, there’s been a lot more rhetoric about this in immigrants in the United Kingdom, but the one big change was eliminating visas for families that may want to come with someone who is going to be a graduate student in a program in the United Kingdom. I can’t imagine that that’s as big a hassle as the cap in Canada or what has gone on in the US because you could, in fact, come on a tourist visa, probably to attend in the country while your spouse doing the degree and maybe just come out once or twice. That shouldn’t be as big of a hurdle as some of the problems in the US and Canada. Is this going to get any better or will it get worse? Maria?

[00:11:45] – Maria

I know that everyone would like for me to say it’s going to get better, and sunny days are around the corner. I don’t think that that’s true, though. I think it’s going to get worse for the US. And similarly for Canada and the UK, I the signaling, even if tomorrow we wave a magic wand and we’re like, Ha ha, just kidding, everyone. We’re undoing it all. It was just a bad dream. Like the terrace. Yeah, exactly. Well, that’s another podcast for another day. But yeah, it’s like if you wake up and it’s like, Oh, it was all a bad dream, honey. It doesn’t matter because I think the damage has been done to the reputation, the idea that, yeah, maybe the student visas, maybe OPT, maybe in the United Kingdom, their postgraduate visa, the graduate route. Maybe we’re going to put it back, but maybe we’re going to pull the rug out from under you at any moment. With that uncertainty, it’s becoming now even more of a gamble. I think that all three of those, I think the US and Canada and the UK, are going to continue to struggle unless some big changes happen soon and unless there’s a way to signal or guarantee that those changes are going to be permanent and not to have this insane volatility roller coaster of uncertainty.

[00:13:04] – John

Yeah, and we’ve said this before, but it’s worth saying again because it shows up in this report, the impact on yield. I think a lot of people who already had their applications in process and applied and then were admitted, actually decided not to come in the fall. And that’s beyond those who had trouble getting the visa because they saw what was happening under Trump. And you can imagine that there are plenty of people who probably have applied who, as these riots occurred in Minneapolis with all this misuse of military people, the yield damage is going to be really significant in this current cycle. This report notes that people who actually were accepted but decided not to come were a A good number of people, and it was especially pronounced from India. Nearly 90% of schools in the US and in Canada said the largest drop off between admitted students and actual matriculation came from Indian candidates. Almost 50 % cited similar drop offs from China and Nigeria, suggesting that visa friction is converting the admits into no shows. I think we can expect a lot more of that in the current year, don’t you think, Caroline?

[00:14:32] – Caroline

Yes, unfortunately, I agree. We’ve definitely heard from even the very top schools over the past few weeks that they’ve been very disappointed with application volume for round one and round two, and that is largely driven by the international pool. So I think that the trend that is highlighted in this report will only continue, and it becomes very painful for the US programs, where, of course, the international students bring such an important injection of diversity of experience and perspective and opinions and enrich the program for everybody. And I think we’ll see not just the impact on the applicant pool, but probably a dramatic impact on the class profiles when we finally get the data for the incoming classes later this year. I think that these trends that highlight in the report will actually really start playing out in the class profile and possibly even class sizes.

[00:15:41] – John

Yeah. It’s really too bad because obviously, we all believe in the MBA degree in particular, in graduate management education overall. We know the value these degrees have for people and the possibility of truly transforming one’s life as a result of this experience. And yet governments are doing everything they can to discourage people from taking advantage of what is really a great thing in the US, Canada, and in the United Kingdom. I guess if there’s any positive news in the report, it’s simply that things are getting even better for the European schools outside of the UK, and those schools are going to see increased talent in their applicant pools. And people who do go to these schools in Europe, in France and in Spain and Germany and Italy, are going to find probably an increase in the quality of their classmates as a result of these changes in the flows of global business talent. I think that’s the positive. It’s for those schools in European nations that have done a really good job putting together stellar programs. Now we’ll have the benefit of more talent in the world flowing their way, which also, incidentally, makes it a great time to go to Natchisé, Paris, to an ESA in Barcelona, or I in or SMT Berlin in Germany or any number of other schools.

[00:17:39] – John

Don’t you think, Maria?

[00:17:41] – Maria

Yeah, absolutely. And in fact, we’re seeing this. Spain has actually implemented a new visa for people who have been impacted by changes to the US visa policy. Apparently, Germany and the Netherlands are also actively starting to think of new ways to How do we take advantage of this exodus? If these other countries want to shoot themselves in the foot and turn away the world’s top talent, we’ll take them. It’s like going to a thrift store and finding a Cartier watch. Oh, my gosh, let’s find these diamonds in the rough and welcome them now to our country so that they can at a minimum study here and perhaps stay here and contribute to our economies. I think it seems that Europe is not sleeping on this. It seems like several European countries are actively trying to find ways to become the beneficiaries of this. It’ll be interesting to see also if India follows suit. The GMAC report cited that I think there was a 25% increase in international interest in India. India does not currently have an easy pathway for international graduates to stay in the country, but if they can quickly throw something together, they might start being the next hotspot for global talent to go to, especially if the economy continues growing there the way it has been.

[00:19:13] – Maria

I’m sad as an American, but I think overall, it’s going to be real opportunities for some other countries.

[00:19:20] – John

For many, I think there’s a choice here. One is, do I apply to a great European school and go? Do I stay home if I’m in Asia and go to one of my home business schools? Or the third alternative, frankly, is, let me wait it out. What the United States is going through, what Canada and the UK may be going through, if I wait, it might change. The likelihood of change in the US is very high. Let’s face it, if you are in the pool that will apply for next year, by the time you come and you matriculate, there’ll be a new administration here. It’s very likely the tax on the H-1B visa will go away. There’ll be no threat to OPT. It’ll be easier to get an extended visa. If you wait even a little bit longer, easier to get a student visa and not have everything you’ve written on social media screened and scrutinized for anything that’s anti-Trump. That would give them a reason to say, No, we’re not watching here. Caroline, what’s your advice? Do you wait? Do you simply apply to another school that otherwise you would not have gone to?

[00:20:52] – John

What do you do?

[00:20:54] – Caroline

Well, waiting isn’t always the best strategy because for many candidates, there is is a window when it’s a really good time for them to head off to business school. And if they wait too long, then their chance of getting into a top program might actually diminish, and the return on investment might also diminish. So I’m not sure that… Waiting a year, maybe, but waiting much longer than that is probably not the best plan. And as you say, the timeline when you’re contemplating business school is quite long, especially if you’re thinking about doing a two-year program because the time it takes to prepare for the GMAT and do your applications and then get to campus, and it’s a two-year program. And so it’s a several multi-year process. Now, the problem is, as you say, things may get better in the US, and hopefully they will, but there’s no certainty, to be honest. And uncertainty is a deterrent because it’s such a big investment to come to the US and embark on an MBA program unless you have financial aid and substantial scholarship support, which, of course, some candidates do get, but otherwise, it’s $200,000 plus. And so uncertainty just undermines confidence.

[00:22:24] – Caroline

And even though we think that things may get better in the US, there is no guarantee. And I think given the longer time frame that you have to plan with as an MBA candidate, you have to factor in uncertainty to that equation. So I think it makes sense right now for candidates to keep their options open. And if they’re interested in the US, then definitely apply, but also apply to some of the international schools as well.

[00:22:55] – John

So let me ask you about this strategy. I’m just thinking about this. I’m saying to myself, Well, what if you apply to US programs because you really want to come here? Your safety strategy is you apply to a few of the better European programs. But if you get accepted in the US program, you defer. In other words, you would be competing in a pool that’s more advantageous for you to get into a good school. But then once you get admitted, couldn’t you try to defer your admission? So You basically get your acceptance in a less competitive pool, and then you finally go, and maybe you won’t… Another year gives you a little more time for some positive change to occur or whatnot. Is that a crazy strategy or not, Caroline?

[00:23:51] – Caroline

Well, most schools won’t grant you a deferral. It’s quite common for schools to get deferral request, and I saw that a lot when I was at INSEAD. And that’s partly because it’s the very nature of MBA candidates to have great opportunities. So it would often be the case that people would come to us and say, I’ve just been offered a job I cannot refuse, or I’ve just had a fantastic promotion, or my boss needs me to stay on, so I want to defer for a year. And that’s just the nature of MBA candidates. They are young, successful people who have more than one opportunity, right? And so the attitude of schools is, well, you have to decide what is most important for you now. Yes, you may have to turn down that great job opportunity to come to business school, and you have to decide what is best for you in the medium to long term. So unless you’ve got some medical crisis that means that you cannot attend, you’re highly unlikely to get your deferral request granted. Now, I don’t know whether that might change a little bit this year. If schools are particularly desperate for international candidates, maybe they might be more flexible than they would normally be.

[00:25:06] – Caroline

I don’t know, but I don’t think that you can count on that.

[00:25:10] – John

Yeah, and that’s especially true of the schools that we talk about all the time. In the schools That’s the case that most candidates want to get into, we’re talking about the most highly selected schools in the world. I imagine at a second-tier school or something like that, it might be a lot easier to get a deferral than it would be from a Harvard or Stanford Award in a Columbia, Kellogg, Chicago Booth, or MIT. That’s just the nature of the beast. Maria, you’re going to say that my strategy idea is awful as well, right?

[00:25:43] – Maria

Well, because Caroline is back this week, and she is like a calming diplomatic influence, I am not going to say that it’s a terrible idea. I will simply say that it may not be the most advised path forward because I agree with Caroline. I don’t- Now you’re the diplomatic Caroline, when you were gone, we took the gloves off, so to speak. We got a little saltier. But yeah, normally schools don’t grant deferrals because now you’re just introducing even more lack of certainty. Now I need to not only worry about my incoming applicants for the upcoming season, but now, okay, of the people I granted deferrals to, how many of them are actually going to show up? Is it 100%? Is it 0%? Why would I… I don’t know. Like Carol, I said, I think, look, if you’re super desperate and you’re like, Let’s keep them on the back burner and hope for the best. But it just introduces even more uncertainty into an admissions officer’s life in terms of yield and that stuff. I don’t think deferrals are… I wouldn’t count on one, put it that way.

[00:26:46] – John

There you have it. Either you put on a brave face and you apply any way and assume the risk, or you take the option of applying to a great European program and go there, or Maybe you wait one year and just see what happens. There may not be dramatic change in one year, but there probably will be some change. I mean, one of the big signals of change in the US, for example, is the midterm elections, which will occur in November, which could show a major shift in the House of Representatives toward the Democratic Party, which would effectively really halt a lot of this crazy from going on because it would give the House Democrats much more power to exercise oversight and investigation into the current administration. It wouldn’t eliminate all the problems, but it would really hold up things and make this administration less able to cause any more havoc. And that would be a good sign because if that occurs, and most people expect it to occur, it would bode well for the next presidential election. But that’s all the politics we want to talk about today. Mainly, it’s how international applicants are getting rerouted away from the US, away from Canada and the United Kingdom.

[00:28:20] – John

So read the story. It’s called Trump Effect: 40% of International Candidates Now Less Likely to Study in the US than Merely a Year is John Byrne with Posts Quants. Thanks for listening.