Trump Scraps Vital Component Of MBA Talent Pipeline

Donald Trump

The U.S. presidential administration of Joe Biden that takes office in eight days will have another immigration issue to contend with: Whether to leave in place a final federal rule change, published January 7, that abolishes the lottery system for coveted H-1B visas and prioritizes salaries instead.

In his last days in office, President Donald Trump has checked off a couple of long-standing items on the ultra-conservative bucket list. Last week he extended a ban on work-based immigration to the end of March, meaning a continued suspension of the H-1B visa, an essential part of U.S. business schools’ appeal to international candidates for MBAs and other graduate degrees. Now, with less than two weeks before the end of Trump’s presidency, the White House has altered federal policy in such a way that some fear could cause major damage to graduate business education, by eliminating the lottery system by which H-1B visas have been granted and giving first priority to wage levels.

The change came via a modification in the Federal Register and was not accompanied by an announcement. U.S. Citizenship and Immigration Services officials say their motive is to protect American workers and help businesses by establishing more certainty about personnel decisions. But because the rule is not effective until two months after its publication, well after Biden takes office, it is widely expected that he will rescind it.


The H-1B visa is a non-immigrant visa that many who come to the U.S. to attend business school aspire to obtain, because without it they can’t work in the U.S. for longer than three years. The tech industry is particularly reliant on H-1B workers, hiring tens of thousands of them from China and India every year; among them are hundreds of MBAs from the top U.S. B-schools. But politically, the program has been controversial among conservatives, who see it as giving jobs to foreigners that could be done by Americans.

B-schools thought they had dodged a bullet in June 2020 when Trump issued a long-awaited executive order that left alone the federal Optional Practical Training program through which international students are granted between one and three years’ stay to work in the U.S. But with the same order he suspended, through the end of the year, 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.

The way they have been granted since 2008: via lottery. No longer. The new rule reads:

“The Department of Homeland Security is amending its regulations governing the process by which U.S. Citizenship and Immigration Services (USCIS) selects H-1B registrations for the filing of H-1B cap-subject petitions (or H-1B petitions for any year in which the registration requirement is suspended), by generally first selecting registrations based on the highest Occupational Employment Statistics (OES) prevailing wage level that the proffered wage equals or exceeds for the relevant Standard Occupational Classification (SOC) code and area(s) of intended employment.”

As USCIS Deputy Director for Policy Joseph Edlow told Quartz magazine, “The current H-1B random selection process makes it difficult for businesses to plan their hiring, fails to leverage the program to compete for the best and brightest international workforce, and has predominately resulted in the annual influx of foreign labour placed in low-wage positions at the expense of U.S. workers.”


B-schools have long lobbied from the position that any restriction on immigration or work visas to the U.S. would compound the challenges they have been experiencing for years with international enrollment. In 2019, the Graduate Management Admissions Council, the association of business schools that administers the GMAT admissions test, reported that 48% of U.S. MBA programs reported a decline in international applications for their 2019 entering classes; total applications to MBA programs were down 9.1% for the 2019-2020 academic year;, and international applications fell by an even larger 13.7%. Across the top 25 programs, every one reported app declines in 2019, fueled by declining interest from foreign candidates. Last year, the crisis began to abate, but international interest in U.S. management studies was still below where the B-schools wanted it. All of which is context for B-schools’ movement over the last three years toward designating their MBA and other graduate degrees as Science, Technology, Engineering, and Mathematics programs, graduation from which qualifies noncitizen for up to 36 months work in the U.S. through OPT.

In October, in a final pre-election move, the U.S. Department of Homeland Security proposed another rule change that alarmed schools, seeking to 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 have affected international B-school students studying in the U.S. who hail from nearly 60 countries across Asia, Africa, and the Middle East. But the proposed rule change was shot down by a federal judge in December.

In 2019, Dean William Boulding of Duke University’s Fuqua School of Business led an effort to advocate that making it easier for high-skilled talent to work in the United States would benefit the economy. Reached for comment after this final rule change, Boulding tells P&Q: “I am a strong supporter of immigration reform that makes it easier for high-skilled talent to work in the United States. As the collective effort from deans in 2019 demonstrated, this type of immigration reform is also in the economic interest of the U.S. However, it’s not apparent the latest immigration action from the Trump administration is a step in a productive direction.

“We will be working to learn more about efforts to end the H1B visa lottery. We will also be encouraging the Biden administration to enact true and meaningful immigration reform for high-skilled talent.”

The ending of the H-1B lottery probably won’t be decreed by a judge, because Joe Biden likely will kill it first. Trump’s new rule is not effective until 60 days after its publication in the Federal Register, on March 9; that won’t interfere with the start of the H-1B cycle, the filing deadline for which is April 1, meaning Biden will have plenty of time to kill the change, which many expect he will do — in addition to addressing numerous other controversial moves by the outgoing Trump administration.


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