U.S. President Donald Trump issued a long-awaited executive order Monday (June 22) that was, for business schools, simultaneously 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.
So much of the conversation about suspending or eliminating federal immigration programs since Trump took office in 2017 has focused on the OPT program that the relief of its stakeholders was palpable in the wake of Trump’s order. And there was another bit of good news: The order, which purports to protect U.S. workers in a time of deepening economic torpor, does not appear to pertain to current H-1B visa holders.
Yet schools have long dreaded Trump’s move, and for good reason: They felt any restriction on immigration or work visas to the U.S. would compound the challenges they have been experiencing for years with international enrollment. According to the Graduate Management Admissions Council, the association of business schools that administers the GMAT admissions test, 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; 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. All of this 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.
With coronavirus and political antagonism dampening foreign appetite for U.S. business education, the enrollment numbers at most U.S. B-schools are likely to worsen — at least for one cycle. We asked deans and others at the top schools to comment on what Trump’s executive order means for 2020 and beyond.
EXPANSION, NOT CURTAILMENT, OF H-1B CALLED FOR
Bill Boulding, dean of the Fuqua School of Business at Duke University and a leader in the effort to convince Washington of the value of OPT and H-1B, tells P&Q by email that he understands the impulse to put American citizens back to work when more than 40 million are unemployed. But, he adds, “there are other, more direct routes to address unemployment that would be more effective than shrinking the labor pool. Business school deans have been extremely vocal in explaining the importance of immigration of highly skilled talent to the U.S. economy. It’s disappointing to see the suspension of H-1B visas. Research has shown that skilled immigration actually creates more jobs for the U.S. economy. On the flip side, research also shows that if companies can’t recruit needed international talent to the U.S. they will offshore those jobs — ultimately hurting American workers by providing less opportunity in our economy.”
Boulding, who is also chair of the Graduate Management Admission Council, organized the writing last October of a 32-page white paper signed by 50 top B-school deans that called for an increase in the current cap on H-1B visas and other measures that they say will encourage, rather than stymie, the flow of international talent to the U.S. The deans publicized their stance with a full-page advertisement in D.C. edition of the The Wall Street Journal and an open letter to President Trump, Vice President Mike Pence, and the top four leaders of the Senate and House of Representatives.
“As I’ve had conversations with policymakers in D.C.,” Boulding says of Trump’s executive order, “both sides of the aisle have expressed a deep understanding of this issue and the importance of immigration to U.S. economic health. We should be expanding the number of H-1B visas available to grow our economy, not curtailing them. On a more positive note, I was pleased to see that the OPT program, which can be a critical path for badly needed STEM talent that can keep our economy competitive, was not curtailed.”
AN EARLY STEM ADOPTER PRAISES OPT PRESERVATION
At USC Marshall School of Business, interim Dean Gareth James focused his reaction on the OPT program, lauding the value of diversity in the classroom and noting that the school designated its MBA as STEM in the spring of 2019.
“Diverse international perspectives in the classroom enhance the learning experience for everyone,” James says. “Weakening the OPT program would not only diminish that experience, but also leave future business leaders without the global perspectives they need to succeed in the marketplace.
“USC Marshall was among the early adopters of a STEM certification for our MBA candidates because of the value the certification provides for both domestic U.S. and international students, including possible OPT extensions.”
USC President Carol Folt — noting that there are currently 341 H-1B employees at USC and that the school has been advocating for non-immigrant visa programs with the Trump administration and Congress — also offered a reaction to Trump’s order.
“I want to express my strong disagreement with these changes,” Folt says. “Our international community is welcome at USC and they have been vital to our success since our founding. These visa programs give us an essential edge, one that American institutions of higher learning need in an increasingly competitive global education and innovation market. Without them, our ability to attract and educate the best and brightest individuals from around the world diminishes. And we thrive from the unique talents they bring, including hundreds of faculty who teach courses in areas that require rare or highly specialized knowledge. Every single day, we see their contributions across our campuses, in our research labs, hospitals, and classrooms.
“As we see these programs curtailed, even temporarily, we are concerned that they will be scaled back even more in the future. If so, the consequences for students, research universities, and the economy at large will be severe.”
EO IS A ‘TRANSPARENT POLITICAL CALCULATION’
Trump’s order, coming on the heels of his temporary halt of green cards last month, also suspends certain J-1 visas, which are given to researchers, scholars, and other specialized categories, and L-1 visas, for executives transferring to the U.S. from positions abroad with the same employer, as well as other types of visa. All told, an estimated 500,000 people annually use the affected visas. The order is effective through December 31, 2020.
At Rice University Jones Graduate School of Business in Houston, Texas, Dean Peter Rodriguez says the executive order is the equivalent of self-harm, hobbling the economy at a critical moment. Rather than adverse, its effects on the U.S. workforce and economy are positive — and should be embraced.
“What is hard to communicate to those who aren’t familiar with the H-1B visa process, or OPT and the STEM extension, is just how competitive these programs are and what it means for the U.S. to be able to employ relatively small numbers of the best talent the world has to offer. Moreover, this executive order simply gets the economics wrong. These programs make U.S. firms more competitive and raise their productivity, thereby growing domestic jobs and domestic spending.
“This move is like shooting our most technologically advanced firms in the foot, hands, and lungs for the sake of a transparent political calculation.”
NYU Stern School of Business Dean Raghu Sundaram calls Trump’s move a “zero-sum presupposition” and says it will damage the U.S. economy in ways that will hurt all Americans. “We are deeply disappointed by the restrictions placed on high-skilled immigrants coming to the United States,” he tells P&Q, “and by the zero-sum presupposition behind this move. These restraints will restrict innovation, economic recovery, and the potential for economic growth, hurting all Americans.
“Last fall we, along with many of our peers, signed an open letter to U.S. policymakers with GMAC to stress the importance of international mobility to the global economy — a position that has taken on new urgency and by which we unambiguously stand today and re-endorse.”
AT STANFORD, A SERIES OF TOWN HALLS IS PLANNED
Jonathan Levin, dean of Stanford Graduate School of Business, says placing restrictions on certain visa categories through the end of the 2020 calendar year “is both disappointing and shortsighted. Throughout history, immigrants have made a great contribution to the U.S. economy, creating jobs and leading the way in innovation. We stand in full support of the GSB’s international alumni and students. We want to be encouraging,” Levin says, “not discouraging, these talented individuals to participate in the American economy.”
Stanford President Marc Tessier-Lavigne added his voice to the chorus of disappointment, saying the order “represents another step that contributes to the United States appearing unwelcoming to the best and brightest minds around the world. We continue to be committed to the international exchange of people and ideas, which is essential to the discovery and transmission of knowledge and the long-term strength of the innovation economy.”
Tessier-Lavigne recently wrote to U.S. Secretary of State Mike Pompeo, urging the federal government’s support for the international exchange of students and scholars, and encouraging “rejection of any policies that include blanket limitations, revocations, or eliminations of visas for international students and scholars.” Stanford, he said, will continue its active advocacy efforts on these issues before the Executive Branch and Congress.
Stanford’s Bechtel International Center has scheduled a series of virtual town hall meetings through Monday, June 29, where information on the executive order will be available for different groups within the Stanford community.
Read President Trump’s executive order, Proclamation Suspending Entry of Aliens Who Present a Risk to the U.S. Labor Market Following the Coronavirus Outbreak.