Stimulus Bill Bars Non-US MBAs fr. finance jobs
Stimulus Puts Pinch on Foreign MBAs
“An American MBA is incredibly expensive if you can’t work in America to pay back the loan,” said Sanford Kreisberg, an independent consultant who runs the business school admissions blog HBSGURU.com. “If you have to return to China or India to pay off a business school loan, then you’ll never come to study in America unless you were already rich.”
“There are a lot of international kids who are in American MBA programs and claim they want to become IT managers, but their secret dream is to go into finance,” Kreisberg said. “This puts a real scare into the secret dreamers, and that’s the group that you’ll never be able to pull [into American b-schools] with these new regulations.”
The desire of foreign students to work in American financial institutions may become yet another casualty of the growing impact that the current financial crisis is having on the global economy.
Earlier this month, Bank of America announced that it would rescind job offers to any MBA student who needed an H1-B visa to work in the United States. The H1-B visa gives American companies permission to hire educated foreigners for up to six years. Unlike other student visas, the companies apply for the visas on behalf of their new employees.
The reason for the cancellation of the job offers, according to BoA, is a series of rules included in the recently passed stimulus plan that would prevent any financial institution that fired American workers and received government bailout funds from hiring foreign MBAs to join their ranks.
The provision on H1-B visas expires in February 2011, but with many foreign students finding their job opportunities limited for the next two years, the United States may very well suffer from a brain drain of the world’s best talent at a time when the nation could use all of the expertise that it can find.
According to the Financial Times, approximately 50 students will be affected by BoA’s decision. However, as more financial institutions are forced to rescind job offers to foreign students, that number could quickly multiply.
American corporations will likely suffer from the loss of talent that results from blocking opportunities for foreign students, but American business schools will also face the brunt of the reaction to this rule change.
“An American MBA is incredibly expensive if you can’t work in America to pay back the loan,” said Sanford Kreisberg, an independent consultant who runs the business school admissions blog HBSGURU.com. “If you have to return to China or India to pay off a business school loan, then you’ll never come to study in America unless you were already rich.”
Kreisberg also highlighted the tightening credit markets as another potential factor in dissuading international students from applying to American business schools, as these students now face greater problems for getting student loans.
“What’s happening is because of the difficulty for internationals in getting loans, the blend is changing towards rich ones,” Kreisberg said.
Additionally, MBA programs in Europe and elsewhere tend to cost significantly less than American programs in general. According to the Wall Street Journal, a 13-month MBA program at the Instituto de Empresa Business School costs 48,000 euros, or about $62,500. In the United States, business school tuition for a two-year MBA program often exceed $90,000.
As a result of these difficulties, American business schools worry that international students will head elsewhere to earn their MBAs, thus harming the global focus of these schools while also negatively impacting the talent pool available to them.
“There are a lot of international kids who are in American MBA programs and claim they want to become IT managers, but their secret dream is to go into finance,” Kreisberg said. “This puts a real scare into the secret dreamers, and that’s the group that you’ll never be able to pull [into American b-schools] with these new regulations.”
