With applications to American MBA programs falling for five years straight, business schools across the US are scrambling to find new ways to make up the lost numbers. One approach has been to focus on attracting more international students.
Total applications to MBA programs were down 9.1% for the 2019-2020 academic year, according to the Graduate Management Admissions Council, the association of business schools that administers the GMAT admissions test. International applications fell by an even larger 13.7%.
A number of factors have contributed to the decrease: Shifting immigration policies and the Trump administration’s anti-immigration rhetoric have coincided with a strong US economy. The number of student F-1 visas dropped 22% from 2016 to 2018, according to the US State Department. One growing concern for international students is the increased difficulty in obtaining US employment visas after completing their studies.
That’s especially hard felt at the top MBA programs, where classes are comprised of up to 40% international students, according to Poets & Quants, a website that tracks the graduate business education market.
In response, leading institutions including Harvard Business School, the University of Pennsylvania’s Wharton School, and Northwestern University’s Kellogg School of Management have joined a trend that seems to be at least in part an attempt to counteract falling applications from international students: The schools have been getting the US Department of Homeland Security (DHS) to classify their MBA programs as STEM programs.
Why STEM?
International students enrolled in STEM-designated programs, in acknowledgment of a focus on science, technology, engineering or math, can remain in the US for up to three years under an optional practical training (OPT) extension, whereas F-1 students in non-STEM programs are legally bound to leave the country a year after graduating. Ultimately, the extra time in the US gives students multiple chances to apply for the H-1B employment visa lottery. There are 85,000 H-1B visas available each year; around 200,000 people applied for one in 2019.
In 2016, the Wisconsin School of Business at the University of Wisconsin–Madison became the first business school to win STEM classifications from DHS. It converted two of its specialized master’s programs, one in operations and technology management and one in supply-chain management. “It’s a reflection of how important we think it is for our Wisconsin MBA students to develop skills in information technology and analytics as we prepare them for supply chain leadership roles,” Wisconsin professor Greg DeCroix said at the time.
It was also a reflection, as the school itself pointed out, of the “important benefit” that the two-year visa extension provides “for both international students and employers seeking STEM-qualified employees.”
It’s easy to see why universities are trying to increase their appeal to international students; these students often pay full tuition, making them especially important to the bottom line of MBA programs when overall applications are down, when government funding gets cut, or when a tuition freeze gets implemented.
“[Business] schools are scrambling trying to find a way to patch that hole in the revenue because the foreign students make up a substantial amount of the money,” says Jonathan Wasden, a Washington, DC-based lawyer whose practice focuses on business immigration issues.
So far, these new STEM designations seem to be working. Representatives from universities with STEM-focused business programs, including Wisconsin and Duke University, say they’ve seen an increase in either applications or the total number of international students enrolled in their STEM-designated programs. Enno Siemsen, associate dean of the MBA and masters programs at Wisconsin School of Business, says the classification helps attract high-profile students.
“We need a pathway for [international students] to succeed in our organizations, to make our organizations better,” says Siemsen. “The STEM designation is in some sense the legal pathway that we have as business schools to do that.”
What employers want
In addition to attracting students from abroad, a STEM designation helps convey the idea that business schools are getting increasingly quantitative, in part to reflect what employers want. MBA students in many programs are taking courses in blockchain and cryptocurrency as well as learning programming languages like R and Python.
Kevin Ezzell, program director for the one-year MBA at Lehigh University’s College of Business, says business analytics skills are a “hot tool” from an employer perspective. At Duke’s Fuqua School of Business, up to 30% of the graduates go into a tech-oriented field.
MIT’s Sloan School of Management recently began overhauling its MBA program with a “desire to be closer to the rest of the institution,” says Jacob Cohen, senior associate dean for undergraduate and master’s programs at MIT Sloan. Classes are going from being commerce-focused to being more data-driven, as reflected by the conversion to STEM classifications for an increasing number of the school’s programs. Even marketing studies are seeing a shift, with increased emphasis on marketing analytics. “Everyone wants to be close to technology now,” Cohen says.
Building the STEM pipeline
Attracting international students is not just a higher-education concern; foreign graduates of these programs contribute to the development of a highly skilled workforce, which the US needs now.
In October 2019, nearly 50 business school deans signed a public letter urging the US government to remove the limits on H-1B visas for highly skilled workers, arguing that failing to do so could negatively affect the US economy.
Russ Morgan, senior associate dean for full-time programs at Duke’s Fuqua School of Business, says writing the open letter was an opportunity for business schools “to signal to international students that they’re welcome here and that there’s a path for some stability of employment for them.” The STEM designation is another way of sending a similar message.
“We’re not trying to become a computer science school; we’re not trying to become an engineering school,” says Morgan. “What we’re trying to do is best serve the world of business.”