Admissions Advice for Foreign B-School Applicants
Things have changed in the last six months since the peak of the economic crisis, wrote Richmond at the start of a recent BusinessWeek chat. "The good news is that today's news is much more positive than the headlines of this winter for loans, student visas, and post-MBA employment visas," he said. Richmond went on to field questions from the audience and BusinessWeek reporter Francesca Di Meglio. Here is an edited transcript of their conversation:
FrancescaBW: We have a couple questions from those who could not join us today. Here is the first: "I am a software professional from India. What are the scholarships and loans available for international students after getting admission to Harvard Business School (Harvard Full-Time MBA School Profile)?"
GrahamRichmond: There are a number of opportunities for international students admitted to HBS. First, the school offers a fair amount of scholarship dollars to many of its admits. Beyond that, on Apr. 15, Harvard University announced a new partnership with the Harvard University Credit Union to provide private educational loans that don't require a U.S. co-signer to its international students, including MBA students at HBS. Here's the URL for information on HBS's loan offering: http://www.hbs.edu/news/releases/creditunionloans.html
FrancescaBW: How much can an international student expect from scholarships?
GrahamRichmond: The top programs I spoke with mentioned that they don't typically treat international applicants much differently than domestics when it comes to scholarship dollars. In fact, one program in particular stated that they have been working to offer more scholarship packages to admitted internationals in an effort to help them matriculate.
FrancescaBW: Yes, but isn't it difficult to get scholarship money for graduate business school?
GrahamRichmond: Of course, MBA programs typically offer less "free money" than PhD programs and other non-professional graduate degrees. The reason is that the starting salaries for MBA graduates are typically more than ample when it comes to paying off tuition loans. But my point was merely that of the scholarship dollars that are out there, the schools are giving them to both domestic and internationals.
On a related note, keep in mind that any international who graduates from a U.S. MBA program can work in the U.S. for one year under the OPT [Optional Practical Training] laws.
FrancescaBW: Here's another question from someone who couldn't join us: "I graduated in December 2007 and have been working in the U.S. for the past one and a half years. I am planning to go back to business school for my MBA in 2013, which will put me in the Class of 2015. I want to get a sense of whether companies' policies regarding H-1B will relax as these challenging years go by or will it just get tougher?
GrahamRichmond: Well, one actual benefit of the economic slowdown is that the allotment of H-1B visas was not exhausted in April 2009 (H-1B visas operate on an April-April year), which makes it easier for employers to hire and sponsor international applicants. I would expect this to continue given the relatively slow pace of recovery. Further, a large number of TARP-financed firms have returned the funds to the government and are once again free to hire internationals.
FrancescaBW: What would you say is the biggest challenge for internationals considering or already enrolled in American business schools today?
GrahamRichmond: For current MBA students (international or otherwise), the biggest challenge right now is the economy. There are simply fewer jobs to be had and many more qualified people on the market than in past years. Of course, the U.S. schools are bending over backward to help, but it's still a challenge.
For current internationals considering an application, I think the biggest challenge remains gaining admission to a top-tier program. Despite the downturn and the fact that there were fewer internationals applying this past year, there remain many more international applicants than there are spaces. This is why it is vital for this population to understand the U.S. admissions process.
Most of the top programs are saying the following: Our international applicant volume was slightly lower, but we still have a tremendous number of quality applicants with increasingly higher scores, profiles, etc.
FrancescaBW: Do you think more internationals are choosing schools in their home countries instead of those in the U.S. now? Should they?
GrahamRichmond: I do think that many internationals are taking a closer look at regional MBA offerings in their home market. Many schools have launched in recent years and can offer a compelling value proposition, especially to those applicants who wish to remain in their home market and aren't looking for a global career.
It can make good sense to consider your local options, for sure, but much of this depends on why you are targeting business school in the first place. After all, the degree is a means to an end. If you know that you want an international experience and to open doors beyond your home market, the leading U.S. programs have a fairly unique offering.
FrancescaBW: Can you break down the difficulty internationals had with loans recently and what's being done about it?
GrahamRichmond: During the late fall and early winter, a perfect storm of events resulted in several problems for leading U.S. business schools. The [economic] crisis led to the collapse of many of the no co-signer student loan programs (Sallie Mae, CitiAssist) previously offered to international students who were admitted.
As spring has turned into summer, many of the leading programs secured new no co-signer loans for internationals. Many more claim that they will have them online by the time this year's crop of applicants matriculate. Of course, it's really only the top-15 type programs that are able to offer these no co-signer loans (at least for the time being), so applicants should certainly study the details before compiling their list of target schools.
FrancescaBW: There is hope then?
GrahamRichmond: I think there is hope, and I have actually been pretty amazed at the speed with which some schools have scrambled to get a new no co-signer loan into the marketplace for internationals.
We actually have posted an "International Student Loan Scorecard", a comprehensive listing of what the leading schools have on offer and how it has changed.
FrancescaBW: How do your clients feel about the loan options that are becoming available to them?
GrahamRichmond: For the most part, Clear Admit's clients have been relieved, largely because things looked so terribly grim about six months ago.
Having said that, there are a few schools that have been unable to replace their prior loan offerings with a similar program. That means that internationals can either borrow less, do so at a higher interest rate, or in some cases, borrow nothing without a U.S.-based co-signer.
FrancescaBW: Can you explain the H-1B visa situation?
GrahamRichmond: In the winter the H-1B situation was looking pretty dire for internationals looking to secure a U.S. job post-MBA. The TARP funds distributed by the U.S. government to leading MBA employers such as Goldman Sachs (GS), J.P. Morgan (JPM), Citi (C), and Bank of America (BAC) led to restrictions on the hiring of internationals. In some cases, such as Bank of America, this meant that internationals had their offers rescinded.
In other cases, the employers worked with the new hires to relocate them into posts in their home country or into different roles, etc. But overall, internationals had good reason to be concerned at that time.
FrancescaBW: Now what is the situation for them?
GrahamRichmond: Over the course of this spring, a large number of TARP-financed firms returned the funds to the U.S. government and are once again free to hire internationals. In addition, as I alluded to earlier, the demand for H-1Bs was less this past cycle (because of the fact that firms are generally hiring less), making it easier for employers to get working papers for the internationals they seek to hire. Of course, the market is still tight for jobs in general (whether you are domestic or international), so that's certainly worth noting. But my sense is that the H-1B situation is much better than it was before.
FrancescaBW: Do you find that your international clients are thinking twice about an American MBA because of the H-1B/employment situation?
GrahamRichmond: Well, as you know, it often takes time for reality to catch up with rumor, so I would agree that there are still many concerned international applicants. Further, any time you plan to lay out $100K (plus lost wages) it always makes good sense to think it through and thoroughly investigate the opportunities for employment on the other end (to ensure that you can in fact pay off your loans, etc).
FrancescaBW: What would you suggest business schools do to make sure internationals know the reality and not the fiction?
GrahamRichmond: I would suggest that business schools be very clear about their loan offerings, the current situation with career placement stats for internationals, etc. I know that many programs are effectively using their blogs and Twitter feeds to broadcast news, and my view is that you can never be too transparent (especially when it comes to easing the fears of international applicants making a big life decision).
One other tidbit worth noting, regarding student visas for study in the U.S.: At the height of the downturn, there was some chatter about whether or not the U.S. government was clamping down on the distribution of student visas. It turns out that it was much ado about nothing. Every program I spoke with has indicated that they have no more than one or two admits struggling to secure a student visa and that this is no different than in prior years.
FrancescaBW: What do you think this means for the future of U.S. business schools and international students?
GrahamRichmond: I think that like any service offering, the U.S. MBA programs are clearly going to face increased competition from niche players in regional markets, especially as these relatively newer business schools get on their feet and build their networks. I also think that the economic crisis, the collapse of no co-signer loans, and the struggling U.S. labor market combined this past cycle to paint a grim picture for U.S. programs.
The good news, however, for the U.S. programs is that they managed to be fairly nimble in securing new loans for internationals and that they continue to offer a great value proposition for them (study abroad, access to a new market, deep network, etc). After all, the MBA degree has its origins in the U.S.
FrancescaBW: Who is benefitting the most from this perfect storm as you called it?
GrahamRichmond: I would say that two groups have benefited from the perfect storm: 1) The very top U.S. programs with global brands and available no co-signer loans. In some respects, there has been a flight to security (strong alumni networks, etc). 2) The non-U.S. programs with increasingly global reputations (ISB, etc). These schools have benefited from some internationals fears of heading to the U.S.
FrancescaBW: To change the subject, what would you say is the biggest culture shock for internationals who attend American business schools? And how can they get over it?
GrahamRichmond: For non-native English speakers, it's clearly the pace of the U.S. classroom and getting their feet on the ground in a new language, etc. For native speakers of English, there is still a period of adjustment as the teaching methods and level of classroom participation can be strikingly different from what internationals are used to.
Finally, the degree to which students in U.S. MBA programs are active outside the classroom in a range of activities (more specifically, the 24-7 nature of the MBA experience) can be a sharp contrast to what internationals may have experienced in their home-country institutions.
I'd say that the best step they can take is to arrive at business school early, perhaps as much as one to two months in advance of classes. Give yourself the time to adapt to life in the U.S., life on campus, and then life in the MBA classroom. There is no better way to adapt to a new culture than immersion.
FrancescaBW: Any parting words or advice?
GrahamRichmond: My final words of advice are that international applicants considering U.S. schools should focus primarily on putting their best foot forward in the admissions process. The harder you work on building your MBA application, the more likely you are to be accepted at a top U.S. program. Since the top programs offer the best opportunities for placement, the strongest networks, and the most generous aid and loan programs, working hard on your application strategy can pay huge dividends.