Will STEM Degrees Save The MBA?

With 70% of full-time MBA programs in the U.S. seeing a decline in applications, some business schools are piloting a potential solution geared toward one important demographic: international students.

There’s been an estimated 10% drop in international enrollment in the nation’s graduate schools of business between 2017 and 2018, according to the Graduate Management Admissions Council, totaling an estimated 8,000 students from overseas.  

To gain an edge in applications and enrollments from full-time students who require F-1 visas, several key MBA programs, including Duke University (No. 14 on the Forbes Best Business Schools) and the University of Rochester (No. 37) and have begun applying STEM designations to their graduate degrees.

Most international graduates are entitled to work in the U.S. for only one year after graduation before their visa expires. However, with a degree classified as STEM (science, technology, engineering and mathematics), international students who are hired by graduation can stay an additional two years through the Optional Practical Training program. 

Many schools attribute the drop in international students to the new restrictions placed on obtaining an H-1B visa and employment-based green cards. One 2018 executive order limits H-1B visas only to “the most-skilled foreigners or highest-paid beneficiaries.” Later that year, the U.S. Department of Labor began requiring employers of H-1B applicants use a new form, which many claimed was designed to increase pressure upon employers. While the true effects of this new form have yet to be seen, President Trump has made anti-immigration rhetoric and policy a centerpiece of his work in the White House.

A STEM designation provides security

With a STEM designation, schools like the University of Rochester and Duke University are now incorporating more technology and data analytics into their MBA programs. And the changeover appears to be working.

Recent University of Rochester MBA graduate Magdiel Guardado Castil, a native of El Salvador, says the new STEM designation implemented in the business program last August drastically impacted his employment opportunities.

“When they made the announcement it completely changed everything,” Castil says. “It gave me more confidence. Previously, when I had recruited for an internship it was very discouraging to hear over and over, ‘We don’t recruit internationals.’ But when I recruited for full-time jobs with the designation it completely changed the conversation.” 

The University of Rochester and Duke University are not the only business schools converting to STEM. MIT, Notre Dame and Boston College, among others, are also beginning to incorporate a STEM designation into their business schools to counteract the flight of international students to Europe and Asia Pacific. According to the Graduate Admissions Council, these regions have seen about an 8% increase in applications between 2017 and 2018. 

“We are down in terms of applications,” says Russ Morgan, senior associate dean for full-time programs at Duke’s Fuqua Business School. “We were down lightly a year ago, but we’re down even more this year. From what we understand in terms of the industry and the number of students that are sending GMAT scores for full time programs in the U.S. we’re impacted in a very similar way to the rest of the industry. There’s been a fairly significant effect in the number of international students.”

According to the National Association for Foreign Student Affairs’ latest analysis, in the 2017-2018 academic year, more than 1 million international students studying at U.S. colleges in undergraduate and graduate programs contributed $39 billion and supported more than 455,000 jobs in the U.S. economy. 

Not every school has experienced a drop in admissions.  The dean of the Simon Business School at the University of Rochester, Andrew Ainslie, said despite the drop in business applications across the country, they have remained largely unaffected.

“There’s been a dramatic drop off in business school applications, both from the U.S. and internationally, but we’ve actually seen an increase in applications,” Ainslie said.

Ainslie attributes the university’s success to their preexisting data-driven curriculum. The University of Rochester is the only school in the U.S. in which every track within their program, including programs that are not typically directly connected to data analytics or technology, like marketing, can receive a STEM designation. While a STEM designation is typically associated with degrees within science and engineering programs, Ainslie explained the Simon Business School already placed a heavy emphasis on data analytics and technology and many of their programs easily qualified for a STEM designation.

“We didn’t really have to make changes to the curriculum,” Ainslie said. About “70% of students in 2018 automatically qualified for a STEM designation anyway.”

According to Ainslie, the University of Rochester actually has a team in the provost’s office dedicated solely to applying STEM designations to various programs in the university. The team started with hard science and engineering programs and gradually moved across the university. The designation is entirely optional — students can pick electives to fulfill the STEM requirement or graduate without the designation. In 2019, about 83% of the MBA students graduated with the designation. Of the 83%, more than half were international students. 

Castil was one of those students. He said the designation had significance for his career even outside of the two-year extension on his visa. 

“Recruiters were fascinated by it,” Castil said. “It was very new. You usually see STEM degree-holders as engineers, so having an MBA with a STEM designation really stood out.”

Ainslie and Morgan agree a STEM designation falls within the growing needs of the job market. “We increasingly had students go into some form of technology, either working for a technology company or doing some sort of technology management,” Morgan says. “Over the last few years with our daytime, full-time, MBA program we’ve gone from consulting being the dominant industry to technology being just about on par with where our graduates go.”

Fuqua introduced the STEM designated track Management Science and Technology Management (MSTeM) in 2017. Morgan said they have not fully been able to realize the impact of the program on international students because the first graduates with the designation are the Class of 2018, who are just now going through the process of getting the OPT extension. Of the students graduating with the designation, about three-quarters of them are international students. 

“What we’ve seen is a great deal of interest and I think what we will see further down the line is more of a translation of that interest into action in terms of application matriculation,’ Morgan said.

Ainslie explained, ultimately, the STEM designation is just one step in trying to combat a drop in international enrollment which could have serious ramifications for the U.S. economy.

“It’s going to impact the lives of every single American,” Ainslie said. “The United States’ success is rooted in its ability to attract the best talent in the world.”