GMAC Says Trump Effect Is Real — And Growing by: Marc Ethier on May 15, 2017 | 4,165 Views May 15, 2017 Copy Link Share on Facebook Share on Twitter Email Share on LinkedIn Share on WhatsApp Share on Reddit A new survey shows that a growing share of international candidates are less likely to pursue a graduate business degree in the U.S. because of the U.S. presidential election results and the new administration’s immigration policies The Trump effect is real. International students are less likely to seek an MBA in the United States after the election of the New York businessman, and the Graduate Management Admission Council has the numbers to show it. The U.S. remains the preferred destination of prospective business students worldwide, despite half of the top B-schools in the world being located in other countries according to the latest Financial Times rankings. That’s one of the key findings of the annual Prospective Students Survey Report, released today (May 16). But a shift has been occurring, and the U.S. is losing ground. Why? Research points to Donald Trump’s election as President last November and his pursuit of stricter immigration policies. “There’s actually a rising share of prospective students planning to apply outside their home countries,” Gregg Schoenfeld, GMAC research director, tells Poets&Quants, pointing out that 59% of survey respondents indicated an intention to apply outside their country of residence, up from 44% in 2009. “But they are looking elsewhere, not at the U.S., for their preferred destination.” AN UNMISTAKABLE DROP, ACCELERATED BY TRUMP’S ELECTION Gregg Schoenfeld, GMAC research director If those stated intentions become real, the coming 2017-2018 admissions season for leading schools could mean there will be less competition for domestic applicants to the very best schools for the first time in many years (see 2017-2018 MBA Application Deadlines). GMAC’s survey shows that after last November’s U.S. presidential election results, a growing share of international candidates say they are less likely to pursue a graduate business degree in the U.S. A short-term or reversible trend might diminish with time, but between November 2016 and April 2017 the percentage of non-U.S. citizen registrants on GMAC’s website who say they are now less likely to study in the U.S. has grown from 35% to 43%. The report continues, “An additional survey of nearly 700 non-U.S. GMAT test takers who sent at least one GMAT score report to a U.S. business school in Q4 2016 shows that two in three (67%) would reconsider their study destination if they are unable to obtain a work visa after completing their degree.” Work visas are a particularly important decision factor for Indian candidates, the study found, of whom 82% say getting a work visa after finishing school is a major factor when selecting a study destination. Schoenfeld says the U.S. is still the top destination of prospective full-time MBA students looking to study outside their country of citizenship, with 58% preferring to study there. But that number shrank from 61% in 2009, even as the number of non-MBA master’s degree seekers who prefer the U.S. has fallen to 47% from 57%, indicating that a major shift in perceptions is underway. “The U.S. remains the most preferred, but it is on the decline,” Schoenfeld says, adding that politics isn’t the only factor in play: More reputable, quality programs are growing around the world, drawing talent that might otherwise head to the U.S. CANADA PICKING UP SOME OF THE SLACK Nearly three in five prospective business school students (59%) intend to apply to programs outside their country of residence, GMAC found, up from 44% in 2009. This represents a huge, essential source of tuition revenue for B-schools. And while most candidates seek study opportunities outside their country of citizenship to receive a higher-quality education (63% of respondents), to increase their chance of securing international employment (58%), and to expand their international connections (51%), fully one-third (34%) hope to seek employment in the country where they attend school. A country that posts a “Not Welcome” sign risks pushing away this influx of talent. Who benefits from the shift in international business student talent away from the U.S.? Much has been made of Europe standing to gain an influx of students, especially in the wake of the UK’s own political temblor, Brexit (more on that below). But another beneficiary is Canada, Schoenfeld explains. Since 2009, there has been an increase in MBA candidates preferring to study in Canada (4% in 2009 versus 7% in 2016), as well as an identical rise in the number of candidates considering non-MBA business master’s programs in Canada (4% in 2009, 7% in 2016). “Canada is actually growing as a study destination,” Schoenfeld says. “A lot of it is because they are more lax on visa policies for work and study. Canada has grown in preference since 2009 among people in Africa, Australia, Central and South Asia, even Southeast Asia. So even though the U.S. is still the top preferred destination, the election results have caused a decline, and Canada is picking up some of that slack.” The U.S. still feels the love of its own citizens, with more than 9 in 10 U.S. candidates prefer to study domestically (96%), GMAC found. BREXIT BAD FOR UK BUSINESS SCHOOLS The other big geopolitical event of 2016 that reverberated around the B-school universe was Brexit. Like Trump, United Kingdom voters’ decision to leave the European Union has been widely expected to make it more difficult for non-citizens to obtain student visas or obtain work visas after graduation — one of the main reasons for studying in a country. Early indications are that the Brexit vote “may negatively impact international candidate demand to apply to UK business schools,” according to GMAC. “In December 2016, among nearly 1,300 non-UK (Graduate Management Admission Test) takers surveyed about the Brexit vote, 45% indicated that the Brexit vote has made them less likely to study in the UK.” Indian candidates were found be the most negatively influenced by the Brexit vote, GMAC found, with 58% reporting that it has made them less likely to study in the UK. “GMAC launched a second survey of non-UK GMAT test takers on March 29, the day the UK triggered Article 50 of the Treaty of Lisbon, which allows the UK to unilaterally quit the European Union,” the report reads. “This survey closed on April 7 and showed the same percentage of candidates would be less likely to study in the UK.” Schoenfeld offers a case in point: In 2009, 19% of Eastern European students wanted to study in the UK; seven years later that number had fallen to 13%. Analysis in the 2017 mba.com Prospective Students Survey Report is based on survey responses provided by 11,617 individuals who registered on mba.com between February and December 2016. (See the following page for GMAC charts showing international student preferences in 2009 versus 2016.) Continue ReadingPage 1 of 2 1 2