Editor’s note: This story has been updated to include a lengthy statement from Stanford University.
This summer, business school leaders felt they dodged a major bullet when President Donald Trump’s long-threatened changes to the visa system in the United States amounted only to a temporary suspension of the H-1B program, through which high-skilled, non-immigrant workers — particularly tech workers — stay in the U.S. In his executive order in June, Trump did not make any changes to the Optional Practical Training program through which many MBAs lengthen their stays in the U.S.
But now Trump’s government may be closing the door to skilled immigration even further — even as graduate business education struggles to reverse dramatic declines in international student enrollment.
In a move with direct implications for B-schools, the U.S. Department of Homeland Security is proposing a rule change that would eliminate a longstanding policy allowing students and scholars to remain in the U.S. for the duration of their studies, also known as “duration of status,” and limit the period of stay to four years — and for some students, only two years. The move would affect international B-school students studying in the U.S. who hail from nearly 60 countries across Asia, Africa, and the Middle East. Comments on the proposed changes are due October 26.
The proposed rule, published last month, “has raised concern among our students, faculty and staff, and we are preparing to submit a public comment firmly opposing it,” says Annelise Riles, associate provost for global affairs at Northwestern University. “If enacted, the rule would place significant burdens on many F, J and I nonimmigrant students, and could greatly limit the number of students and scholars seeking an education in the United States, making the U.S. less competitive on a global scale.”
DEANS: VISA RESTRICTIONS SLOW ECONOMIC RECOVERY
In June, President Trump issued a long-awaited executive order that was, for B-schools, both not as bad as expected and deeply disappointing. While the order left alone the federal Optional Practical Training program through which international students are granted between one and three years’ stay to work in the United States, it suspended, for the next six months, an array of visa programs including H-1B, which is the goal of many graduate school alumni in OPT. More than 220,000 places are available in OPT annually to eligible non-citizens; only about 85,000 H-1B visas are granted, via lottery.
B-school leaders were unhappy about the changes but also relieved. Bill Boulding, dean of the Fuqua School of Business at Duke University and an outspoken critic of the Trump administration’s approach to immigration, told Poets&Quants, “We should be expanding the number of H-1B visas available to grow our economy, not curtailing them.” Peter Rodriguez, dean of the Jones Graduate School of Business at Rice University, said the move was “like shooting our most technologically advanced firms in the foot, hands, and lungs for the sake of a transparent political calculation,” and Raghu Sundaram, dean of the Stern School of Business at New York University, added that Trump’s executive order was a “zero-sum presupposition” that would damage the U.S. economy in ways that will hurt all Americans. “These restraints,” Sundaram said, “will restrict innovation, economic recovery, and the potential for economic growth, hurting all Americans.”
Now come further restrictions, which the Trump administration says are necessary for security reasons. The latest proposal, if enacted, would impose fixed end dates rather than allow visas to remain valid for the duration of a student’s studies; currently, F-1 visa holders can stay in the U.S. until finishing their program, as long as they continue to meet program requirements. Under the proposed rule, students in programs that exceed the new limits must reapply to stay in the country.
The rule change proposal has drawn more than 24,000 comments so far.
The American Institute of Physics and 36 scientific associations and societies urged the Trump administration not to make the change that it says would repel science and technology talent that would otherwise spur scientific breakthroughs and economic growth of the U.S.
“This proposal gravely threatens America’s long-standing role as the world’s leader in training the next generation of mathematicians, scientists, and engineers,” Brian Greene, professor of physics and mathematics at Columbia University and the co-founder of the World Science Festival, said in a October 22 news release from the American Immigration Council. “Graduate training requires years of dedicated study and research which cannot be carried out effectively under the cloud of government scrutiny and the prospect of deportation. Fundamental research is the engine of economic prosperity, and so this proposed rule, if put into effect, puts America’s future in jeopardy.”
‘DEATH BY A THOUSAND IMMIGRATION CUTS’
International student numbers are already in a trench at U.S. B-schools, made worse by the coronavirus pandemic. After dropping nearly 14% in 2019, the numbers have fallen still further after the global health crisis led many schools to offer, and many foreign students to accept, deferments, dropping international numbers dramatically at many top schools even as applications overall climbed. At Harvard Business School, international enrollment dropped from 37% last year to 33% this fall. At Northwestern, which Associate Provost Annelise Riles says is “committed to the personal and intellectual growth of its students in a diverse academic community,” foreign student numbers at the Kellogg School of Management dropped from 32% to 26%. At the Wharton School at the University of Pennsylvania, internationals nosedived to 19% from 30%. At Stanford Graduate School of Business, foreign MBA students fell from a school record 43% last year to 35%, even as GSB enrolled its largest-ever class. (See the next page for comments on the DHS rule change from Stanford President Marc Tessier-Lavigne.)
The drop-off was even more keenly felt further down the rankings, where smaller programs could ill afford the temporary losses becoming permanent. The University of Washington’s Foster School of Business saw its international enrollment fall from 29% to 24%, prompting the school to launch a new STEM pathway in its MBA program. At USC Marshall School of Business — where the highest rate of MBA applications of the 2019-2020 cycle occurred — international numbers cratered, falling to 12% from 32%.
Paul Bodine, founder and president of consulting firm Admitify, says the Department of Homeland Security’s new rule could lead to further erosion of international enrollment at a time when U.S. schools can scarcely afford it, calling it “Another example of the Trump administration working to sap one of America’s greatest weapons — its magnet-like attraction to the smart and gifted — via death by a thousand immigration cuts. The benefits that highly skilled students/workers bring to the U.S. (and by doing so deprive our competitors) have been proved over and over by research (e.g., NBER’s ‘High Skilled Migration to the U.S. and Its Economic Consequences’). These people enrich and invigorate us economically, period. The rule’s malicious arbitrariness is signaled by its ham-handed four-year limit: the most economically value-adding students (graduate/professional level) enroll in five- to seven-year programs, not four-year programs. Any foreign student contemplating a five- to seven-year graduate commitment would have to worry that it will be interrupted four years in — which is probably the DHS’s intent: to discourage them from even starting.
“The DHS claims the rule will prevent ‘foreign adversaries from exploiting the country’s education environment’ but the way to do that is by focusing greater DHS manpower and scrutiny on students who apply and enter, not by imposing a one-size-fits-all blunt instrument that punishes everyone. Under the guise of ‘oversight’ and ‘national security’ the DHS proposes to damage the country it purports to protect, all to prove to the administration’s xenophobic base that the ‘elites’ will be punished for audaciously pursuing education and professional success.”
PROPOSED RULE COULD ACTUALLY INCREASE INTEREST ABROAD IN A U.S. MBA
Stacy Blackman, founder of Stacy Blackman Consulting, tells P&Q that the Trump administration’s move would “further the unfortunate xenophobic characterization that many internationals now have of the U.S. political administration. The rule, if implemented, would undermine the academic strengths of our U.S. college institutions; so many internationals rely on continuing their education to higher degrees in medicine, law and science and thus require a longer than four-year stay.
“Higher education is deeply valued among internationals. We know that Europeans, Asians, Indians, and other cultures view higher education — beyond the undergraduate — as the gold standard. Most Europeans stay in Europe for a merged undergraduate and master’s program, whereas Asian and Indian ethnicities often turn to the U.S. to realize their higher-education goals. Accordingly, these ethnic groups would be disproportionately affected by the proposed rule, based on sheer numbers.
“However, it’s unclear how the proposed rule would actually affect MBA applicants because 99% of MBA applicants take two to five years upon college graduation to gain full-time work experience, which has always been an expectation for applicants to top MBA programs. MBA students at top programs almost never matriculate directly from college to the business program; the need for a four-plus-year stay is not applicable for top MBA seekers.”
But Blackman sees a silver lining.
“While it may be counterintuitive, we are actually seeing an increase in U.S. MBA interest among internationals; these internationals are undeterred by any proposed DHS changes,” she says. “There are many internationals who seek the U.S. MBA brand and have flexibility to return to their home country afterward for their professional path. For example, we are seeing a surge in interest for the U.S. MBA for internationals who come from major family businesses abroad. We are also now seeing greater interest in the U.S. MBA among internationals who have multiple (3+) citizenships, including a U.S. passport.
“The pending constraints on the immigration policies may end up increasing interest among some niche groups of internationals who see a U.S. higher education as even more coveted now that the U.S. education may not be as accessible to all. All eyes are on the upcoming U.S. election, as the DHS can certainly reverse course depending on the election outcome.”
VIEW FROM EUROPE
Candy Lee Laballe, head of Laballe Admissions, a boutique MBA application consulting firm in Europe, says most of her clientele is unfazed by the proposed change in the U.S., though she has her own concerns.
“I sent a message about it to 12 of my current clients, seven replied, and all said that the ruling is not having an impact on their decision to apply to the U.S. One said, though, that if Trump gets re-elected and he is accepted, he may rethink his decision to attend. Another who is applying to both U.S. and London said he is more concerned about Brexit than the U.S. immigration rules. However, what I see and they don’t is a shift in where they are applying.
“I’ve been in this gig about 15 years and in general my EU-based clients tend to go for the M7, maybe T10 in the U.S. for the first two rounds and then apply to one or more of the three big EU schools as a backup. The reasoning being that if they are going to go the U.S. for business school, and spend close to a quarter of a million USD, then they want to make sure they have a good brand name for a long-term ROI back in Europe. If they cannot get into a T10, then they prefer the top three EU schools, which have prestigious brands and sure networks in Europe (INSEAD, IESE, LBS).
“However, this year the majority of my clients have made their U.S. choices even smaller. They are not going for the breadth of M7 or T10, they are applying only to a handful of the most elite U.S. programs (ie. HBS, GSB, CBS, Wharton) and applying to one or more of the big three EU schools as a backup. I interpret this to mean that all the hassles and cost of U.S. study will be worth it only if it is one of the most elite programs. Actually several of my clients tell me this.”