Donald Trump's arrival in the White House has damaged perception of the country's valuable MBA degree market among outsiders despite his pro-business agenda.
Half way through the current admissions cycle, 64 per cent of US business schools have reported a drop in applications from overseas students, according to GMAC, the administrator of the widely-used GMAT business school entry exam.
This is the first time in over a decade that a majority of elite institutions offering the qualification – which was originally created in America – have reported a fall in foreign demand.
Only 31 per cent of the 324 MBA courses surveyed reported gains in international student applications in the six months to March 2017, when compared with the same period ending March 2016, the smallest share in 12 years. At the same point last year, 39 per cent of programmes reported gains in such applications.
GMAC links the decline in overseas MBA applications to Mr Trump’s entry to the White House. At the time of the election last November, 35 per cent of non-American business school candidates polled by GMAC said they were less likely to apply to study in the US as a result of the outcome. By February that figure had risen to 43 per cent.
Visa regulations
In particular, concerns that Mr Trump will tighten post-study work visa regulations has affected applications from the important Indian market. More than 80 per cent of prospective Indian students told GMAC that the ability to get a job in the host country was a “very important” issue when selecting an MBA course.
US business schools rely heavily on overseas students to fill their MBA programmes, where fees are often higher than other masters courses. Across the 51 US schools in the top 100 MBA courses ranked by the Financial Times this year, 39 per cent of students were from overseas.
Those choosing not to study in the US are either switching to schools in places perceived to be more welcoming to foreign students, particularly Canada, Australia and Europe, opting for a homegrown MBA course or are delaying making a decision, according to Sangeet Chowfla, GMAC chief executive and president.
“Anecdotally we are seeing a lot of people saying I will wait another year,” he said. “By definition, the kind of people considering an MBA programme to further their career will already have a job so they have the option of deferring their application.”
US heartlands
Schools in the US heartlands experienced the biggest declines in overseas students, with 77 per cent of those in the midwest reporting a drop in non-US applications compared with 64 per cent among northeastern institutions and 48 per cent of those on the west coast.
“The schools least impacted are the schools with very powerful brands and these tend to be clustered in the west and the northeast,” Mr Chowfla said. “We have great schools in the midwest but they don’t have the same brand recognition.” – Copyright The Financial Times Limited 2017
