Illustration: Lazaro Gamio / Axios

U.S. graduate business schools — once magnets for American and international students seeking a certain route to a high income — are in an existential crisis. They are losing droves of students who are balking at sky-high tuition and, in the case of international applicants, turned off by President Trump's politics.

Why it matters: The once-venerated MBA is going the way of the diminished law degree, pushed aside by tech education. Graduates of the top 25 or so MBA schools still command the elite Wall Street and corporate jobs they always did, but the hundreds of others are scrambling, and some schools are shutting down their programs. Survivors are often offering new touchy-feely degrees like "master of social innovation."

The background: Most top-ranked U.S. business schools are doing just fine. Sixteen of the top 25 reported a jump in MBA program applications for the 2016-2017 academic year, and four schools — Yale, Columbia, Carnegie Melon, and the University of Chicago — saw double-digit leaps, per Poets & Quants, a website that covers graduate business education.

The problem: In the more than 350 programs that didn't make the top ranks, rising tuition costs and smaller returns in the form of employment and income have forced a rethink of the traditional MBA degree.

  • Campus recruiting at lower-ranked schools is down: In a survey by MBA Career Services, the 30 schools ranked 21 to 50 reported a 42% decrease in recruiting by companies in 2016. In 2015, this same group reported an 83% recruiting increase.
  • The value of an MBA is uncertain: MBA grads are facing shifting expectations from employers with more options than ever. "Especially for someone who might be 25 or 30, they're leaving with an MBA, and there's a question from employers, 'Well, you've got an MBA, but what else can you do for me?'" said Michael Prebil of the think tank New America.
  • Programs are shutting down: Wake Forest, the University of Iowa, Virginia Tech and other schools have all recently discontinued their full-time MBA programs.

A big problem is declining international interest: The enrollment at some mid-tier MBA programs is more than half international students. But 51% of B schools report a decline in international enrollment in fall 2016, a 13% jump from 2015, according to the MBA Career Services survey.

This is across the board: International enrollment at some top 25 schools is down, per Poets & Quants. For example, 32% of Georgetown's B school applicant pool was international in the 2016-2017 academic year, compared with 43% the year before. The trend is even more pronounced in the lower-ranked schools.

Trump administration's immigration policies are one reason. According to a GMAC survey conducted in February, 67% of prospective international MBAers would rethink their eventual study destination if they thought they'd be unable to obtain a work visa following the completion of their degree.

  • This is especially so for the best candidates. More than half of international applicants who scored over 700 (out of a possible 800) on the standard GMAT test said they were less likely to study in the U.S. than elsewhere because of their view of the Trump administration.
  • Who wins: While only 32% of U.S. business schools reported an increase in international applicants last year, 76% of Canadian schools and 67% of European schools saw a jump last year.

Graduate education is a global market: "The return on investment calculation for the international student is even more amplified for many of them, coming from markets that are more price sensitive," Scott DeRue, dean of the business school at the University of Michigan, tells Axios. "And then you layer onto that some of the uncertainties around the job market, the visa issues, and things of that sort that are well covered in the media, and I think that adds to the anxieties that international students will and could have."

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