STEM MBAs Raise Overseas Demand at US business Schools

The niche courses can count when it comes to securing US work authorization

It is a widely held view in the business education sector that the Donald Trump administration’s immigration crackdown is partly to blame for a drop in overseas students in America. Demand for the flagship two-year full-time MBA in the US has dropped every year for half a decade.

Business schools have had to think innovatively about how to staunch the decline, with most of the top ranked institutions seeing a potential solution in a science, technology, engineering and mathematics designation. They achieve the STEM certification if at least half their content covers these subjects.

The trend has reached fever pitch in the past year, with so many institutions announcing STEM designations for their MBAs. This list includes the business schools of Harvard, Cornell, Chicago, Georgetown and Rice Universities.

It reflects their desire to shore up overseas applications, but also to prepare students for an increasingly digital workplace and to meet a rising employer demand for technology skills.  

[See the Top 9 STEM-Certified MBA Programs]

Crucially, certification means overseas students can apply for a 24-month extension to the optional practical training (OPT) scheme that is automatically available for 12 months after graduation. “But while that is a draw, you really can’t underestimate the most significant benefit of a STEM designated degree, which is the analytical skills it imparts,” says Andrew Ainslie, the outgoing dean at University of Rochester’s Simon Business School.

The school in New York was among the first to create a STEM MBA. “We know that there is a high demand for leaders who can use data to drive strategy and decision making: there are 200,000 job openings in STEM management roles projected to exist by 2024,” says Ainslie.

He chalks up the success of his pioneering certification, which raised both domestic and overseas applications for Simon’s MBA. His school is not alone, with data from the Graduate Management Admission Council last year showing that 43 percent of business masters degrees with a STEM designation increased their overseas applications, compared with 26 percent of courses without the certification.

Visa headwinds

However, these designations face headwinds. The suspension in June of the H-1B program awarding work visas for 85,000 skilled migrants each year is the latest blow to business schools that rely on overseas students for tuition fees.

A big attraction of the OPT program was the chance to later apply for a H-1B visa, which is awarded in an annual lottery system. The OPT scheme itself has not been paused, with research showing that employment of foreign workers even boosts the employment of domestic ones.

But the latest visa crackdown means some overseas students on the OPT this year face being forced to return to their home countries with high debt during a time of economic uncertainty. This issue has affected the schools with the newest STEM certifications, with some unable to retrofit the designation to help alumni secure an OPT extension. The Kellogg School of Management has been unable to retrofit its STEM certification, but other schools including Columbia and UC Berkeley Haas have done this successfully.

STEM designations remain valuable

Nonetheless, business schools insist that STEM designations remain valuable for students and employers alike. Georgetown University’s McDonough School of business was recently STEM-certified after adding more quantitative content to its core and elective MBA courses to meet employers’ needs. This content includes an MBA certificate in data analytics.

Last year, technology was the third most popular industry for McDonough graduates — behind consulting and finance — with 14 percent of job acceptances and an average starting salary of $118,206. “Adding this certification helps our students more strongly signal to employers that they are tech-ready and are prepared to lead in the digital world,” says Prashant Malaviya, McDonough’s senior associate dean for MBA programs.

Demand for such content is high: over the past few years, the Yale School of Management in Connecticut received many requests for a STEM MBA from its community. It granted their wishes earlier this year.

“STEM skills prepare students for the cross-disciplinary demands of the modern workforce,” says Abigail Kies, assistant dean of Yale’s Career Development Office. “Technology is a crucial part of most industries, and students being able to flex into the technical side of business is valuable for organizations.”

As a result, she expects that many other schools will launch STEM MBAs. “It is important for schools to stay at the forefront of business needs and train the next generation of leaders. This is one way schools are addressing that need,” Kies adds.

Indeed, the University of Chicago Booth School of Business has been one of the latest to make its MBA STEM-certified. The school’s dean Madhav Rajan says: “In addition to arming our graduates with the knowledge and tools to thrive in today’s business world, this updated degree reinforces the University of Chicago’s longstanding commitment to its international community.”

Back at the Rochester school, Ainslie says institutions such as Booth are just the first of many more who will recognize the importance of a STEM designation. “As demand grows, it stands to reason that business schools will adapt to fulfill that ask,” he says. “As for which ones and how many, that list changes every day.”

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