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New H-1B visa rules – 3 reasons why you should pursue an MBA from the US in 2019

Pursuing an MBA from the US can be expensive – it can cost up to USD 200,000 and most international students who go to the USA for their MBA want to work there so that they can repay this debt and make a good life. Unfortunately, in the recent past, many deserving students have decided against pursuing MBA in the USA because of the flurry of negative news regarding the H-1B visa. The current negative sentiment regarding H-1B while bad for the IT outsourcing companies but is excellent news for MBA students, especially those aiming for top 30 business schools.

In this article, we’ll give you 3 reasons why pursuing an MBA from the US is now even more fruitful. Here is the outline of the article:

  1. Higher H-1B rejections for IT companies open up more seats for MBA students
  2. Record hiring of MBAs in Technology and Consulting
  3. Record Scholarships for MBA students
  4. 2019 – Best year for an MBA

H-1b visa new rules

Higher rejections for IT companies open up more seats for MBA students

In 2016, the H-1B visa program was severely oversubscribed. Even with a job offer, an MBA student had a 40% chance of securing a visa. Now, with higher rejections up to 50% for Indian IT companies, the chances of actually getting a visa when you have a job offer have increased significantly. How much? Let’s look at a few numbers.

The Center for Immigration Studies, which is an independent, non-partisan, non-profit, research organization on immigration in its article agrees that the approval rate of H-1B visas offered has reduced since the fiscal year 2015.

Fiscal Year H-1B
Approvals
2015 95.70%
2016 93.70%
2017 92.60%
2018 84.50%
2019 (first three months) 75.40%

This change is simply because of the decrease in the H-1B approval rates of IT companies who typically outsource its employees holding Bachelor’s degrees from India than applicants with US Master’s degrees.

 

Since H-1B approval rates have decreased significantly for these IT companies it opens up more visa opportunities for international MBA graduates in the US.

 

h-1b visa approval rates

On the other hand, H-1B approval rates of US companies (shown in orange) which predominantly hire MBAs has been increasing since 2014. It supports the fact that more H-1B visa opportunities have opened up for international  MBA graduates in recent times.

Here are the H-1B approval rates of the top 15 companies in the Fiscal Year 2018:

H-1B Users H-1B Approval Rates (2018)
Cognizant Tech Solutions 68%
Tata Consultancy Services 82%
Infosys Ltd. 74%
Deloitte Consulting 75%
Capgemini America 60%
Wipro Ltd. 82%
Accenture 83%
Microsoft 99%
E&Y US LLP 91%
JP Morgan Chase 97%
Amazon 98%
Apple Inc. 99%
Google 99%
Intel Corporation 99%
Facebook Inc 99%

Companies like Microsoft, Amazon, and Apple which typically employs more MBA graduates have an H-1B approval rate of 98-99%, which simply means that the new visa policy favors people with advanced degrees.

This is also evident from a recent rule change of the H-1B lottery process as explained in the next section.

New H-1B visa lottery process favors candidates with advanced degrees

The Department of Homeland Security (DHS) announced a rule change to the 85,000 H-1B visas granted to for-profit companies each year. This change will bolster the chances of those who have advanced degrees (Master’s degree or doctorate) from the US. The change has already been implemented from April 1, 2019.

H-1b Visa USCIS

Previously, the H-1B lottery process was divided into two phases. In the first phase, 20,000 visas were granted to only those holding an advanced degree from a US institution and in the second phase, the remaining 65,000 visas were granted to all qualified candidates.

According to the new rule, the order of granting visas has been reversed. In the first phase, the lottery will grant 65,000 visas to all eligible candidates. However, the second phase will grant the remaining 20,000 visas to candidates with advanced degrees only.

The implication of this reversal will result in companies favoring international workers with advanced degrees.

Take a look at the comparison of the old and new H-1B lottery process. For this calculation, we have assumed 200,000 applications with 120,000 application from IT companies and 80,000 applications from US graduates with advanced degrees. Because of the change in the process candidates with advanced degrees now stand a chance to get 4000+ additional H-1B visas.

H-1B visa new rules difference between old and new lottery process

Explanation of the old and new H-1B visa lottery

Let’s say, 120,000 IT outsourcing employees and 80,000 graduates take part in the H-1B lottery.

According to the old lottery process, in the first phase, 20,000 graduates will get H-1B visas from a dedicated lottery. In the second phase, 120,000 outsourcing employees (predominantly with a bachelor’s degree) and 60,000 graduates will compete for remaining 65,000 visas. Assuming both groups receive visas in a similar proportion, IT companies will receive 43,334 H-1B visas and graduates will receive 21,666 visas.

  • Total visas for graduates = 20,000+21,666 = 41,666
  • Total visas for IT companies = 43,334

According to the new H-1B lottery process, the phases have been reversed. According to our example, all 200,000 applicants will compete for 65,000 visas. Assuming both groups receive visas in a similar proportion, graduates will receive 26,000 H1-B visas and IT companies will receive 39,000 visas. Since more graduates were part of the process, they received a bigger share of visas as compared to the old lottery.

In the second phase, the remaining 20,000 visas will go to graduates.

  • Total visas for graduates = 26,000+20,000 = 46,000
  • Total visas for IT companies = 39,000

According to the Department of Homeland Security, 5,300 more workers with advanced degrees will get the H-1B visa after this change. This is an increase of 16%.

Francis Cissna, director of United States Citizenship and Immigration Services said, “Everyone wants to hire the most qualified candidate they can. But if I’m an employer and I have two candidates who are equally qualified for a position, and both require me to sponsor them for a visa, I’m probably going to want to file for the one with the master’s degree because now, mathematically, I have a better chance of getting them picked,”

According to Mercury News, in April 2019, USCIS drew lottery from 201,000 visa applications from employers for the 85,000 H-1B visas. For the 65,000 H-1B visas, as projected for this year, candidates having Master’s or a higher degree from a US school received 63% of the visas up from 56% last year which is an increase of 4,550 visas.

If you are someone who is planning to pursue an MBA from a US business school, your chances of getting an H-1B visa has now increased by around 16%.

Record hiring of MBAs in Technology and Consulting

Companies such as Amazon, Microsoft, Deloitte, McKinsey, etc. have been hiring MBAs at a record pace.

Take a look at the below chart to understand how consulting and technology companies have been increasing their hiring at top business schools for the last 3 years.

new H-1B visa rules - technology and consulting companies have increased their hiring

In 2018, Consulting and Technology companies increased their recruitment significantly at Duke Fuqua, Tuck, Cornell, and Stanford. While the business schools like Columbia, Chicago Booth, and Kellogg where these companies were already hiring a lot of students, the hiring figure has remained similar.

Consulting and Technology companies hire the most MBAs

These companies also end up hiring the majority of the graduating class of top business schools.

82% and 81% of Stanford’s and Columbia’s graduating class of 2018 respectively, found employment in these 3 industries.

Consulting Technology Financial services Total
Harvard 25% 19% 29% 73%
Stanford 18% 33% 31% 82%
Wharton 25% 15% 37% 77%
Kellogg 30% 28% 14% 72%
Chicago Booth 31% 20% 31% 82%
MIT Sloan 32% 30% 16% 78%
Dartmouth Tuck 30% 24% 20% 74%
Columbia 33% 16% 32% 81%
UC Berkeley 24% 32% 14% 70%
Yale SOM 35% 15% 23% 73%
Michigan Ross 30% 27% 16% 73%
Duke Fuqua 32% 28% 16% 76%
Darden 32% 18% 21% 71%
Cornell Johnson 22% 18% 29% 69%
NYU Stern 28% 34% 17% 79%
UCLA Anderson 20% 15% 30% 65%

75% of the graduating class is hired by industries which sponsor the most H-1B visas to MBAs.

You can see that consulting, technology, and finance companies hire the most MBA students and they also provide the most opportunities to international students.

Consulting, Technology, Finance, Healthcare plan to hire more international MBAs in 2019

This is also evident from the GMAC’s year-end employment poll report 2018 which showed that consulting, finance, healthcare, and technology companies plan to hire more international candidates in 2019 as compared to 2018.

Industry Hired international MBA candidates in 2018 Plan to hire international MBA candidates in 2019
Consulting 45% 52%
Technology 44% 58%
Financial services 41% 53%
Healthcare 41% 55%

An increasing trend towards hiring more international MBA students

H-1B visa hiring companies

The highest jump comes from the technology industry where 14% more companies plan to hire international MBAs in 2019 followed by financial services companies at 12%.

h-1b visa sponsoring industries for MBA

The good thing about these companies hiring more international MBA students is also reflected in the share of H-1B visas sponsored by these companies.

The best part – while the acceptance rate for Indian IT companies is low, the acceptance rate for most companies that hire MBA students is higher than 98%.

90+% international MBA graduates find employment

However, employment figures of business schools for international students look better. 94% international students of Stanford class of 2018 found employment within 3 months of graduation. 95.2% international Booth MBA students had a job offer while 94% international Tuck MBA students found jobs within 3 months of graduation. Below are figures of other top business schools.

Business School Percent
Stanford 94%
Chicago Booth 95.2%
Dartmouth Tuck 94%
Michigan Ross 90.4%
Duke Fuqua 92%
Darden 85%
Cornell Johnson 87%
Georgetown McDonough 98%

Top business schools – 90% international students had a job offer in hand within 3 months of graduating

So, it’s evident that more than 90% international MBA graduates have been successfully finding employment in the US and this trend is only bolstered by the new H-1B visa rules. However, there is one more reason why you should pursue an MBA from a US business school which is the abundance of scholarships.

Record Scholarships for MBA students

According to GMAC, a mere 41% of students received scholarships in 2014. In 2018, that number increased to 61%. A good profile combined with a 740 or higher GMAT score gives you an excellent chance of securing a scholarship.

H-1b-visa-new-rules-mba-scholarships

Harvard Business School offered $36 million in scholarships to MBA students in 2017 which was up by $2 million from 2016. The average HBS scholarship is approximately $40,000 per year or $80,000 in total.

Darden School of Business received a generous grant of $30 million in 2018 which was ultimately offered as a scholarship to MBA students to attend additional courses for free.

Stanford GSB doles out more than $16 million in MBA scholarships and nearly half of the class receives some kind of scholarship. Take a look at the Stanford Reliance Dhirubhai Fellowship aimed at Indian students wanting to pursue an MBA from Stanford GSB.

2019 – Best year for an MBA

H-1b visa rules explained by Rajat

Given all these factors, for international students, the year 2019 may be one of the best years to apply to a business school in the USA.

The H-1B visa lottery process now favors MBAs, Consulting and Technology companies are more willing to hire international MBA graduates, and business schools are offering more scholarships than ever.

So, if you have been putting down your MBA plans for quite some time, 2019 has given you enough reasons to fulfill your dream of studying at atop US business school. The first step towards fulfilling your dream is acing the GMAT. Start working on it now.

 

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