On the surface, the picture is far from rosy. US business schools are in decline. Donald Trump’s pugnacious rhetoric is putting international MBA applicants off.
Even domestic applicants are looking elsewhere. And INSEAD sits atop of the Financial Times’ Global MBA Rankings for the second consecutive year.
According to GMAC, applications to traditional, two-year MBA programs fell in 53% of US business schools in 2016, while 74% of one-year MBA programs in Europe reported growth.
Still, US admissions departments are resilient, working hard to keep their large and established share of the market. In the US, both top and mid-tier business schools continue to attract top-quality international applicants to their MBA programs.
“We’ve seen continued growth in international applications this year, despite a generally shaky market,” says Laurel Grodman, director of admissions at Yale School of Management.
3,649 people applied for Yale’s full-time MBA program in the 2015-to-2016 application round, with the school accepting 19% of applicants. Yale has already exceeded those numbers in the current cycle.
46% of the 334 MBA students in the graduating class of 2018 are international passports holders. Although international applications have not grown quite as quickly as domestic applications in the past two years, Laurel is yet to feel any ‘Trump Effect.’
“It’s certainly a concern,” she continues. “One of our core values is having a diverse and global student body. So, any challenge to that is something we need to be mindful of.
“We haven’t seen any changes play out in the numbers to date. But it will be interesting to see what happens in the years to come.”
For now, Laurel’s main challenge is continuing to convince international applicants that Yale’s two-year MBA – ranked the 15th best MBA program in the world by the Financial Times – is still a valuable degree in the midst of a packed and varied market.
“We do speak with international students who are considering a one-year MBA program versus the two-year,” she admits.
Asia tends to be the Yale’s largest source of international applicants, typically from China and India. This year, they’ve received an increasing number of applications from smaller Southeast Asian countries like Thailand as well.
Rebekah Lewin, assistant dean of admissions at the University of Rochester’s Simon Business School, has also seen international MBA applications continue to grow.
Simon’s full-time MBA program receives 900-to-1000 applications each recruitment cycle. The school’s acceptance rate is around 30%.
105 MBA students enrolled in the fall of 2016, representing 17 different nationalities. MBA classes are typically around 40-to-50% international.
“We’ve actually been going against market trends,” says Rebekah, who enrolled on the Simon MBA program herself back in 2000. “There’s been a real big push on our part in terms of opening our applicant pool and growing our enrollment.”
One tactic that’s worked well for Simon Business School has been the hosting of free online webinars for prospective students, on anything from application tips, financing an MBA, and career orientated sessions. Numbers have varied from 20-to-30 participants for more targeted sessions, to several webinars attracting over 100 engaged applicants.
Out on the road, Rebekah has faced questions about the current political situation in the US and the impact on internationals finding jobs, but she’s not concerned.
“Whenever there’s a period of uncertainty there will be questions asked,” she says. “These kinds of challenges are not new, and we’ve been successful in addressing them in the past.”
At Syracuse University’s Martin J. Whitman School of Management, a new international recruitment plan - launched in 2013 – prompted a huge increase in international student representation in the full-time MBA class; from 68% in 2015 to 96% in 2016.
Shri Ramakrishnan, assistant director of graduate recruitment at the school – which caps its intake at 50 full-time MBA students each year – travelled on various recruitment tours, attending events, and meeting candidates in person in the Fall of 2016.
“Doing in-person recruitment is very helpful,” she says. “We’re seeing quality candidates come from specific regions who match our program requirements.”
Again, Asia is Whitman’s biggest market for international MBA applicants. 63% of international students in the 2016 MBA class were from India. The school has current students from Taiwan, Turkmenistan, and Vietnam. China is a big focus, although Shri has seen increasing numbers of Chinese applicants choosing more specialized master’s programs over the MBA.
Donald Trump’s travel ban is always a hot topic of conversation among wary international applicants. Shri too, is concerned about the current presidency’s potential impact on MBA applications in the future. However, the decline she’s seen in applications has been more from domestic rather than prospective international MBAs.
“The domestic pool everybody is competing for has been dwindling every year,” she says. “With that in mind, our focus has been very international.”
A Radical Approach
To boost international diversity, Arizona State University’s WP Carey School of Business, has taken a more radical approach. In 2016, it rolled out its new Forward Focus MBA, with the university covering 100% of all incoming MBA students’ tuition.
Consequently – and after a lot of press coverage – applications more than doubled from around 500 in 2015 to 1,159 in 2016. This year, numbers have levelled out to around 650 well-matched applicants.
24 nationalities were represented in last year’s MBA class. And WP Carey’s Forward Focus MBA jumped from 35th to 25th in this year’s US News & World Report rankings.
“I don’t know of any other school that’s offering full scholarships to all its full-time MBA students,” says Pam Delany, WP Carey’s director of graduate admission and recruitment.
“With the scholarships that we offer, we’re able to open our doors to people who may have never considered applying to a full-time MBA because of the cost. We’re seeing more diversity in the classroom.”
Incoming WP Carey MBAs become Forward Focus fellows and give back to the school by working on faculty research projects, running MBA clubs, and designing new student workshops.
The two-year format means most US MBA programs cost more than shorter MBA programs in Europe. So, US business schools are doing their best – also through scholarships and financial aid – to ease the financial burden for prospective MBA students.
When internationals come to study at business schools in the US, they’re often required to sign a financial guarantee form to show they have the funds to support their tuition. WP Carey has just decided to accept loan guarantees from banks in India.
Many banks are reluctant to lend internationally. Like the majority of top-ranked US business schools, WP Carey is partnered with peer-to-peer lending platform Prodigy Finance, which provides international MBA students with the funds they need to study abroad.
Founded by a team of INSEAD MBAs, Prodigy Finance has processed over $250m in loans, funding tuition for more than 6,200 international MBA students.
“We’ve actually seen an increase in international applications across all our programs,” Pam continues. “But what we’re seeing is students are being admitted, and then they’re just waiting to decide – waiting to see what’s happening here in the US with our political climate.”
The University of South Carolina’s Darla Moore School of Business faces a more unique recruitment challenge than most.
Ranked the number one international MBA program in the US by the US News & World Report, International MBA students at Darla Moore are required to complete a four-month international marketplace immersion, completing a consulting project and learning another language abroad.
“All this creates a program that caters to a specific type of applicant,” says Marcelo Frias, managing director of full-time MBA Programs at Darla Moore.
Darla Moore is redesigning its International MBA to remove the compulsory language learning element. But international applications have remained constant. 39% of the current International MBA class come from outside the US. There’s good demand for the program from Asia, Eastern Europe, and Latin America, although the European market is getting tougher to break.
Still, Marcelo is confident that the school’s unique proposition is more of a help than a hindrance when it comes to attracting international MBAs.
“If say, you come from Germany to get an education in the US, but you also spend four months in Mexico and learn Spanish in the process – there are an enormous number of American companies that would die to find people like that.”
A Question of Careers
The majority of international MBA applicants coming to study in the US are looking to stay. Despite renewed fears over visas, US business schools have a good track record in terms of placing their international MBA grads into jobs.
Temple University’s Fox School of Business – where 34% of full-time MBA students are international – placed 100% of its MBA grads into jobs in 2016. Around 90% of international MBA grads from Simon Business School find jobs in the US after graduation.
At Northwestern University’s Kellogg School of Management, the current two-year MBA class is 35% international – the school has a full-time visa advisor on-campus. In 2016, over 96% of all Kellogg MBAs received job offers within three months of graduation – the majority going into US-based consulting firms like Bain and BCG.
There is widespread concern for the future. Donald Trump’s stance on immigration doesn’t help. But Liza Kirkpatrick, Kellogg’s careers director, has a positive outlook. For internationals looking to find high-level jobs in the US, going through business school is still their best bet.
“With the volume of employers looking for top MBA talent and the deep alumni networks, international students attending Kellogg and other top MBA schools get an advantage in looking for work in the US,” she says.