Thirty-six million Americans have sought unemployment aid since the start of the coronavirus pandemic. That number continues to climb even as some states “reopen” — and even as the Covid-19 outbreak that has killed tens of thousands continues to ravage the country.
As he grasps for a way to mitigate the economic damage, U.S. President Donald Trump is reportedly considering suspension of a program that business schools increasingly have turned to as a lifeline amid declining international student enrollment and plummeting applications overall. When Trump formally suspended most legal immigration in a presidential proclamation April 22, he promised action within 30 days — by May 22. The week after his proclamation, on April 27, Trump’s acting Homeland Security Secretary Chad Wolf said in a radio interview that the Optional Practical Training program — by which hundreds of thousands of foreign workers, including thousands of MBAs, are allowed to stay in the U.S. longer without needing a hard-to-get H-1B visa — is now an administration target.
Half a million people are in the U.S. on H-1B visas, which are limited to 85,000 annually and can only be acquired though a lottery process; the OPT program, as of last year, had an enrollment of about 223,000. According to reports in Forbes, the Wall Street Journal, the New York Times, and elsewhere, in the next few weeks the Trump administration is expected to accede to a request by Republican senators to halt the issuance of new H-1B visas and suspend all non-immigrant work permits for at least a year, or until employment levels rebound. Unemployment in the U.S. is currently at about 15%, the worst since the Great Depression of the 1930s, and “these suspensions are critical to protecting American workers as our economy gets back on its feet,” Republican Senators Ted Cruz, Josh Hawley, Charles Grassley, and Tom Cotton wrote in a letter to Trump last week, urging a 60-day or longer suspension of H-1B and OPT.
The threat to OPT comes as two dozen top B-schools have established or expanded Science, Technology, Engineering, and Math programs to lure more international students with the promise of lengthier post-graduation work stays in the United States. Through the OPT program, STEM degree holders qualify for 36 months of post-graduate work in the U.S., three times longer than otherwise. Applicants get one chance at the H-1B lottery each year; three years of OPT means three shots at the prize. Many schools are also making their STEM designations retroactive to alumni from earlier classes; at a few others, alumni are pressing for retroactivity as they face the expiration of their OPT and visa eligibility.
FOREIGN STUDENT NUMBERS, OVERALL MBA APPS ALREADY DOWN BEFORE COVID
Even before the coronavirus pandemic threw everything into turmoil in March, the situation at U.S. B-schools was dire, with international student numbers dropping and applications plunging at large and small MBA programs alike.
Since 2017, 31 schools in the top 52 as ranked by Poets&Quants have seen declines in their foreign MBA student ranks, 21 by double digits. Seventeen schools have seen increases, with an average gain of 5 percentage points and 17.7%; among the 31 decliners, the average loss is 4.5 percentage points and 16.6%, including 3.5 points and 10.9% among 16 schools in the top 25. For the most part, the elite schools have not eluded others’ fate. Four of the top 10 saw increases in foreign student enrollment averaging 3.2 percentage points (8.35%), while six saw declines of 2.6 points (7.3%). The biggest change for a top-10 school came at the University of Chicago Booth School of Business, which lost 14.6% of its international MBA student volume in three years.
In terms of overall MBA applications — a data point directly impacted by slumps in international student interest in studying in the U.S. — 2019 was the fifth consecutive year of falling applications to the overall MBA market and the second year in a row that the slump has hit the most highly ranked and selective business schools. Few expect the current application season — extended by many schools in response to Covid-19 — to improve things.
The University of North Carolina-Chapel Hill Kenan-Flagler Business School has been among the hardest-hit in this years-long storm, losing more than a quarter of its foreign student volume in three years: from 27% in 2017 to 20.1% in 2019, a 25.6% decline. Kenan-Flagler lost 38.5% of overall application volume in that span, second-worst in the P&Q top 25. These and other realities explain why UNC’s B-school late last year launched a new STEM-designated concentration in business analytics and management science in its full-time MBA program. The program opened in January and drew 52 students.
Brad Staats, associate dean of MBA programs at UNC Kenan-Flagler Business School, says recruitment in the Covid-19 era has been good so far, with the numbers higher than this time last year. UNC Kenan-Flagler extended its Round 4 application deadline to July 13 and moved back the start of the fall MBA term to August 31. “There are a lot of people who are re-evaluating their plans,” he says, “and applications have gone up as a result. So far, the class continues to come together nicely, I think. The big question that anybody who’s paying attention is certainly thinking about: What is the summer going to look like, as students either change their mind, or if international students can’t get visas? It’s that almost musical chairs-ish game that is always going on a little bit with waitlist clearing and students then changing their minds. I think everyone is trying to model what that is going to look like this year.”
Staats, who is also a professor of operations and faculty director of the Center for the Business of Health at UNC Kenan-Flagler, says impact of adding a STEM concentration has been substantial in both the first- and second-year cohorts. “We see it as a reflection of the attractiveness of analytics in the workplace, and certainly the international students’ response has been quite high, too,” he says.
‘DIFFICULT TO TELL WHAT IT MIGHT MEAN’
UNC Kenan-Flagler’s numbers may have dipped since 2017, but now they are bouncing back, Brad Staats says — and he partly credits STEM and OPT.
“The class composition right now sees a nice bounce-back, but how do we worry about what that’ll actually look like when they show up here? I think across the whole industry, part of the attractiveness of OPT is the ability to secure opportunities after graduating in the United States. And so removing that? There already have been a number of things that have strengthened our peer schools outside of the United States, and I think, not surprisingly, this would, for some, shift that decision further.”
At Georgetown University’s McDonough School of Business, the downturn in international student interest has not hit as hard, with MBA apps down just half percentage point from 2017 to 2019 (32.7% to 32.2%). But as an international hub — and as a school that lost 22% of app volume in three years before launching its own STEM Management Science major in the full-time MBA in 2019 — McDonough sees few positives from major visa or OPT restrictions, says Prashant Malaviya, senior associate dean for MBA programs.
“At Georgetown, we created our STEM-designated management science major in our MBA because it was valuable to all of our students,” Malaviya tells P&Q. “It is a reflection of the future of business, of who we are and the evolution of our curriculum over time — we actually did not add or change any classes to meet the requirements of the STEM designation. In the end, the knowledge taught in our core and elective STEM offerings are valuable to employers around the world, and having this designation on our students’ transcripts will certify to employers that Georgetown MBAs are prepared to lead their workplace into the future.
“We have little influence on the policies of the presidential administration, but we can continue to be innovative in our programming as we anticipate the knowledge and skills the business world will require in the long-term.”
Peter Johnson, assistant dean of the MBA program and admissions at the Haas School of Business at UC-Berkeley, says he and colleagues are keeping an eye on political developments — unsurprising for a school that lost 16.5% of application volume over the past three years.
“We’re definitely paying attention to it, as we do on any policy proposals or statements that would impact higher education in general and our program in particular,” Johnson tells P&Q. “Suffice to say, we’re keeping an eye on it. It’s hard to predict what will actually occur, if anything. I think there have been a lot of statements made by the (Trump) administration this year that are simply posturing for political purposes that don’t, in the end, become anything. So, it’s difficult to tell what this might mean.”
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