World to U.S. B-Schools: Thanks, but No Thanks

Nishant Banore got one step closer to his dream of attending a business school in the U.S. when he received an offer of admission this fall from UCLA's Anderson School of Management. Banore, founder of I-Alive, a nonprofit that educates Indian youth about healthy living, was even more excited when the school told him he'd landed a lucrative $30,000 fellowship, a coup in an especially competitive year for B-school admissions. The Indian applicant's enthusiasm quickly waned though as he considered his job prospects in the U.S. after graduation. With limited H-1B job visas available, a shaky economic climate, and new restrictions on hiring foreign workers in the financial services sector, attending an American B-school all seemed all of a sudden too big a risk to take.
"I don't think I can leave my family's future on luck and hope," says Banore, who lives in Mumbai. He turned down Anderson this week to attend one of the top B-schools in India, the Indian School of Business.
For years, American business schools have effortlessly attracted a diverse body of international students, eager to come for a top-rate business education and the chance to work in the U.S. after graduation. But diversity at top B-schools across the country may take a hit this year, as a growing number of international students put off plans to attend school or decide to attend schools in their home countries instead. Though it's still too early to tell what the impact will be on next year's class, a growing number of students from China, India, Europe, and the Middle East say they are considering, or have already decided, to decline their acceptance offers to prestigious U.S. business schools.
Job and Visa Worries
Meanwhile, a growing number of foreign students studying in the U.S. said they plan to return home after graduation, according to a study by the Ewing Marion Kauffman Foundation released onThursday. The students fear that they will not be able to find a job after graduation and a substantial majority—85% of Indians and Chinese, and 72% of Europeans—are worried about obtaining work visas, according to the study. The attitude of students, particularly the Chinese, towards employment opportunities has shifted, as well. Nearly 52% of Chinese students said they believed China had the best job opportunities, vs. 32% of Indians and 26% of Europeans. That's a sharp change from the 1980s and '90s, when most skilled immigrants believed the best job opportunities could be found in the U.S., the foundation says.
The shift comes at a time when the climate for international students in the U.S. has become increasingly chilly. New rules under the Troubled Assets Relief Program (TARP) have imposed strict hiring restrictions on any companies receiving the federal bailout funds that hire H-1B workers. Bank of America rescinded 61 offers to second-year international MBA students this March, heightening concerns that other banks may soon follow suit, or worse, that there will be a general halt on H-1B guest-worker visas.
Complicating matters, international students are facing difficulty obtaining funding for B-school. In the past, most students participated in loan programs that allowed applicants to obtain up to $150,000 without a co-signer to assume stewardship of the loan should the borrower default. The banks that used to offer these programs have withdrawn from the loan market, and some top schools have still not yet announced replacement programs.
At the University of Chicago Booth School of Business, applications from international students are down, and prospective admitted students are worried about their job prospects going forward, says Rosemarie Martinelli, Chicago's admissions director.