Trouble ahead for UK business schools: the demise of the post study work visa

The prestigious London Business School: will it soon be feeling the pressure?

Guest post from Dina Giannikopoulou. Dina is a researcher with the  Association of MBAs.

Business education has been significantly impacted as a result of the Student Immigration Consultation, with many business schools already reporting declining numbers of applications and enrolments compared with this time last year.

When the Association of MBAs—the worldwide accreditation body for postgraduate business degrees—first contacted its 47 accredited UK member schools in late 2010 to gauge reactions to the consultation, we were overwhelmed by the volume and degree of concern expressed across the board. Almost 90% signed our open letter to the press and Parliament arguing that, if implemented, the government’s plans would have a serious impact on the competitiveness, finances and reputation of UK business schools and the wider economy.

The most pressing aspect of the consultation for business schools and MBA candidates is the closure of the Post Study Work visa programme. MBAs are mature post-experience students who are already on advanced career paths when embarking on the programme—they have no recourse to public funds for tuition fees*, which average about £30,000 per year and can be as high as £50,000.

The consultation sent a message to foreign professionals considering doing an MBA that the UK is essentially ‘closed for business’. When contemplating making such a large economic and intellectual investment in UK institutions, prospective graduates are faced with the prospect that they may not be offered the opportunity to apply the specialised knowledge and skills learnt on their programmes to the UK market.

In the past, most international students left the country immediately after graduation to work in global financial centres in Asia, Europe and North America; a small number remained in the UK to gain experience in the City before moving on to their next role. However, the key attractiveness factor as reported by business schools is the perception of opportunity, even if that opportunity is not ultimately taken.

Negative message

The unintended consequences of sending a negative message to prospective international MBA students include:

  • Decreased competitiveness for UK business schools against other destinations (Europe, North America, Australia and Asia). There are currently eight UK universities in the top 50 Financial Times rankings including London Business School at number one, but their rankings depend a great deal on their ability to attract the best and brightest talent to their programmes.
  • Loss of diversity and internationalisation at UK business schools. International diversity is a key factor in determining global rankings; loss of foreign students would threaten the prestige and reputation of the UK’s premiere business programmes. Of the 22 criteria used by the Financial Times to determine MBA rankings, five include international aspects of study programmes: percentage of international faculty, percentage of international students, international range of the advisory board, international mobility and international experience. Diversity and multicultural exposure are key tenets in high quality business education and this is now at risk.
  • Decreased revenue for UK universities at a moment when the government is slashing budgets. Diversity data from 2008 showed that 73% of all enrolments at UK business schools were international students, with an average of 126 international students per school. When considering the high tuition feels for MBAs, this represents a serious loss of revenue.
  • Reducing the recruitment pool for UK based global businesses thus making the UK a less attractive base for international organisations.
  • Wider knock-on effect on the UK economy because overseas business school graduates are a major export industry and boost UK investment in the long term due to the networks and ‘good will’ generated during their time as students. The UK currently trains, influences and exports business leaders from major global financial centres. In 2008, students from outside the EU comprised of 83% of all international students enrolled at UK business schools. The top non-EU feeder countries were: India (19%), China (5%), Nigeria (5%), the United States (4%), Singapore (4%), United Arab Emirates (4%), Malaysia (3%), Russia (3%), Egypt (3%) and South Africa (3%). A total of 83 countries were reported.

Global competition

The UK already faces strong competition from business schools in Europe, North America and Australia, markets which offer attractive employment opportunities to graduates. And high quality English-language MBA provision is expanding rapidly in emerging economies such as China, India and Latin America—these are the highest growth regions for accreditations by the Association of MBAs.

UK schools must compete at the highest level to attract students to its programmes and the consultation has already had a negative impact on MBA providers. While the new policies are not as bad as initially anticipated, the damage of the debate is already done. Much has been made in the foreign press, particularly in emerging markets, of the bad atmosphere for foreign students in the UK.

And while Tier 2 visas remain an option for graduates, many smaller companies such as start-up business ventures lack the resources and infrastructure to deal with the complexities of the bureaucracy surrounding that process.

*According to a recent survey by the Association of MBAs, 51% of students are self-funded, 32% receive company sponsorships, 10% use bank loans and none receive government assistance.

About jcwi

Joint Council for the Welfare of Immigrants is a key campaigning voice in the field of immigration, asylum and nationality law and policy. It is completely independent from government funding, remaining entirely free from government influence. View all posts by jcwi

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