The report surveyed 1,145 MBA and master's programs from 336 business schools across 40 countries. Of those surveyed in the US, nearly half of programs (48%) reported a drop in international applications. 23% reported significant declines.
The percentage of international business school candidates who said the US was their preferred study destination dropped from 44% in 2017, to 37% in the first half of 2019. Although, of those surveyed, the percentage who said they planned to apply to a US business schools only dropped from 63% to 62%, in the same time period.
Among the non-US citizens who had considered the US in the past, but did not now plan to apply, 50% of candidates said the ability to obtain a job in the United States post-graduation was a deciding factor. 48% cited the ability to obtain a student visa, 47% the political environment, 37% safety and security concerns, and 34% racism and discrimination concerns.
GMAC's latest report comes as US business school deans pen an open letter to President Trump urging changes to immigration and visa policies.
There could be good news on the horizon though, as changes to the H-1B visa give priority to MBA and master's students. And despite the challenges, the US ranks number one in our Top Countries for Business School Candidates 2019 report.
Domestic vs international applications
In GMAC's Application Trends report, the degree of domestic decline for US programs was not nearly as dramatic as the drop in international applications. That’s despite 47% of programs reporting a decline in domestic applications.
41% of US programs reported domestic application growth, whereas only 30% of programs saw a growth in international applications.
Among US programs that responded to both this year’s and last year’s survey, domestic applications dropped by 3.6%, compared to the steep 13.7% decline in international applications. Total applications at US business schools were down 9.1%.
GMAC’s report stated that historical trends in application volumes show that a strong economy typically has a depressing effect on domestic US demand for GME. During times of economic expansion, the opportunity cost of pursuing a degree is higher, and candidates are less likely to leave the workforce to pursue a graduate degree, the report said.
That doesn't stop other countries benefiting though, as has been the case in Canada, Europe, and the Asia-Pacific, where application volumes have grown.
The biggest losers
Large, top-ranked US full-time MBA programs saw the steepest decline in applications. Only 21% of programs with 201 or more students reported total application growth this year, compared with 44% of programs with 50 or fewer students.
Even top schools like Harvard and Wharton have suffered in recent years. Only 6% of responding programs ranked in the top 50 of the US News and World Report 2020 ranking reported year-on-year total application growth. That’s compared with 38% of responding unranked programs.
Almost three-out-of-four full-time two-year MBA programs (73%) reported year-on-year declines in total application volume.
58% of programs reported declines in domestic applications, and 74% said they saw a drop in international applications.
Among two-year, full-time MBA programs who responded to this year’s and last year’s survey, total applications were down by 10.8% (domestic declines were 6.7%, and international declines 17.1%).
On top of that, 65% of programs reduced their class size this year.
The picture is equally as poor for US full-time, one-year MBA programs. Of those who responded, 58% saw a decline in total application volume, and total applications were down by 18.6% among the programs that responded to this year’s and last year’s survey.
STEM brings signs of optimism
STEM-certified US programs were more likely to report growth in international applications, the survey showed. STEM-designated masters are also giving US business schools new hope.
Though a majority of both STEM-certified (53%) and non-STEM (57%) programs reported declines in total applications this year, 43% of STEM-certified programs saw a growth in their international applications. Only 26% of non-STEM programs saw international application growth.
It’s the first time this year that the survey asked about a program’s STEM certification. Non-US citizen graduates of STEM-certified programs qualify for optional practical training (OPT), which grants an additional 24-month stay in the country on the student visa.
Of non-US citizens who prefer to study in the United States, 36% said they were considering a STEM program.
In total, 195 (24%) of the responding 804 US programs said their program is STEM-certified. The most common type of STEM-certified programs are master of data analytics (28%), master of finance (22%), and master of information technology (14%).
Master of data analytics programs were a bright spot for the US this year. 53% of programs grew their total application volume.
A majority of master of data analytics programs have grown in each of the past five years. The percentage of growing programs has dropped year-on-year in that time, though, suggesting that growth is ebbing.
US master in management programs were a mixed bag this year. 49% reported year-on-year applications declines—46% reported growth, and 6% stability.
Of the US master in management programs that responded, 50% saw an increase in international applications. 24% of those reported a significant increase.
Attracting international talent is key for the future of the US economy and losing out on student mobility will impact the US long-term, in ways that will also impact domestic citizens. That’s a warning from GMAC, in a new white paper that sets out ways to reverse the trend in dropping international applications.
If the trend isn’t reversed, US business schools, and the US economy, could see irrevocable damage.
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