The US is the world’s top MBA destination, with seven of the 10 top schools there. But the negative immigration rhetoric of the Donald Trump administration is damaging America’s reputation for quality education.
In the latest edition of its Application Trends Survey Report, GMAC surveyed 1,087 graduate business programs during the 2018 application cycle. It found that the US experienced a 10.5% fall in foreign nationals applying to all program types. There was a 1.8% decline in domestic application volume.
Last year, two-thirds of US business schools also reported falling application volumes from international candidates. GMAC today blamed the “disruptive American political environment” for the continued decline in demand for US masters programs.
In contrast, schools in Asia-Pacific, Canada and Europe all experienced growth in overall application volume. Globally, demand for graduate management education is stable in 2018 when compared with 2017.
The ability to attract top international talent continues to be a critical determinant to programs’ overall application volumes.
This year, 65% of Canadian and 63% of European programs report an increase in international applications over 2017. The majority of applications received by Canadian and European programs this year are from internationals.
US business schools cite a growing reluctance among American employers to hire foreign graduates of MBA degrees, the country’s flagship business qualification. The proportion of US employers planning to hire overseas graduates fell from 55% to 47% this year, a separate GMAC poll of 1,100 firms globally found.
US employers are concerned about the Trump administration’s proposed changes to the H-1B visa that most international students use to apply for jobs in the country, which would make it harder to hire them.
This has contributed to a growing perception that internationals are less welcome in the US. They typically make up between one-third and half of the MBA cohorts of the top US schools.
“Access is a critical issue facing higher education,” said Bill Boulding, dean of Duke University’s Fuqua School and chairperson of the GMAC board of directors.
“Economic indicators in the US are strong, but if we are to maintain such growth and productivity we need to make it possible for people from all different regions and backgrounds to study and work in the location they desire.
“If that doesn’t happen, we limit not only the possibility of an individual, but also continued economic prosperity in the US and growth around the world.”
But there are several factors contributing to America’s flagging appeal to internationals. Among them is the strength of the world’s largest economy. “A low unemployment rate means young professionals have an increased opportunity cost of leaving their jobs in pursuit of an advanced degree,” said Sangeet Chowfla, GMAC president and CEO.
“Combined with a disruptive American political environment and the emergence over the past decade of tremendous educational and professional opportunities abroad, one can begin to understand, in part, why demand in the United States has dropped from previously record-high application volumes at some schools.”
There has been a “flight to quality” in recent years, with mid-tier US schools more likely to receive fewer applications than the elite institutions.
But the gap appears to be closing, as several top US programs have reported a drop in application volume in 2018. The University of Chicago’s Booth School of Business said MBA applications had fallen 8.2% in 2018 from a year earlier, with the percentage of international students in the cohort falling by six points to 30%.
Yale’s School of Management reported a 7.6% fall in application volume for its latest MBA class.
The pressure on students to complete courses more quickly appears to be another factor in the decrease in application volumes in the US, and the increased demand for European MBAs.
In Europe, the degrees can be completed typically in half the time as they can in the US, so they are cheaper in terms of fees and students also sacrifice less salary.