A Visa Squeeze for Foreign MBAs

With H1-B visas oversubscribed, grads, schools, employers, and legislators are scrambling for alternatives

When Abhishek Sehgal came to the U.S. to pursue an MBA at the University of Texas McCombs School of Business, he expected to get some work experience in the country. But the second-year MBA student from India didn't anticipate it would be so difficult to get a visa to work after graduation. Citigroup (C), the 28-year-old's future employer, submitted his H-1B visa application on Apr. 2, the first day petitions were accepted. But the pool of applicants was already oversubscribed, and Sehgal's application wasn't chosen in a random computer selection.

All was not lost. After Sehgal completed his degree requirements at McCombs this spring, he entered a visa pool for candidates with Master's degrees, but has yet to hear if he will get one. If it doesn't work out, Citigroup will take him for a one-year "practical training" under his student visa and reapply for him next year, allowing a four-month sabbatical during the time neither visa covers. "I feel a bit sad," he says. "When I was coming here, I never knew there could be a problem of this sort."

Sehgal is one of many international MBA candidates who's caught in a visa bind. With only 65,000 H-1B visas available for professional-level workers across all sectors for the 2008 fiscal year, the U.S. Citizenship & Immigration Services received 123,480 eligible applications on Apr. 2 and Apr. 3. After a computer lottery, about half the applicants were rejected. Only 58,200 H-1B visas were subject to the lottery, as 6,800 are set aside under free trade agreements with Chile and Singapore.

Second Selection

For a few weeks after they were turned down, MBA students still had hope, as 20,000 more H-1B visas are given to candidates with Master's degrees. But that cap was reached on Apr. 30, weeks before most graduation ceremonies. Now, after investing in an American education, students can either use what's left of their student visas and apply for an H-1B next year or take their degree elsewhere. "It's heartbreaking," says Michael Hasler, assistant director of MBA career services at McCombs. "These students are the best and the brightest."

The visa crunch has left the growing segment of international students, not to mention the career-services offices at their B-schools, scrambling to find alternatives. At schools such as McCombs, University of Virginia's Darden School of Business, and Cornell University's Johnson School, 30% of the MBA student body is international and affected by the H-1B visa cap.

After the first set of H-1B visas disappeared, schools realized they needed to help students qualify to apply for one of the 20,000 H-1Bs reserved for those with a Master's degree. At some schools, administrators encouraged teachers to finish international students' grades first so they could send a letter legally attesting to the fact that degree requirements were completed. "We did this without compromising the integrity of our program for a government deadline," says Robert Carraway, associate dean for MBA education at Darden.

Pushing Grads Out

Even though Darden tried to get students into the second visa selection, the application cap was reached before the school could complete the letters. As of last week, 25 of its students had yet to secure a visa. Carraway says these students have two options. As part of the student visa, MBA grads can complete a year of work called Optional Practical Training. In the meantime, if the hiring company agrees, it will apply for an H-1B the next year. The snag in this situation is that the student visa expires a year after graduation and the H-1B wouldn't take effect until the following October. During the interim, companies will send graduates to do work outside of the country.

The upshot is that many B-school grads may take jobs in another country. "The UK has been very aggressive.

They are already spreading the word to work there," Carraway says. Under Britain's Highly Skilled Migrant Programme, MBA grads with degrees from the top 50 business institutions worldwide are immediately allowed into the country for a year after graduation. Graduates have also looked at opportunities in Canada and other parts of Europe.

McCombs MBA candidates without an H-1B after the first round talked with an immigration attorney about their options. Students who had Master's degrees in other disciplines were encouraged to apply for the H-1B within the Master's degree cap, and students of Canadian and Australian descent were given other routes to find visas. In 2005, the U.S. opened 10,500 E3 visas for Australian professionals who previously had to obtain an H-1B. Once H-1B visas run out, professional Canadians have several other options to get a visa because of treaties between the two countries.

Global Discussion

Laurie Sedgwick, an international student adviser and associate director of the career-management office at the Johnson School, says the visa crisis may deter future applicants from choosing a school in the U.S. "If our international students have this much more difficulty getting jobs within the U.S, it will influence whether or not they study here or in other countries," she says.

And if international students choose to study elsewhere, Sedgwick says it will be detrimental to the other students in the program. "It's absolutely critical that we have students to represent countries from all over the world to contribute to class discussion," she says. "Many other countries are becoming players in the global economy."

Sedgwick is also concerned that companies will be reluctant to hire international MBAs, since they may have a tough time getting visas. "It will take an employer who's willing to take that extra effort."

Legislative Intervention

Microsoft (MSFT) spokesman Jack Krumholtz says the company is still willing to hire H-1B workers, but says that with the visa cap, employment opportunities in other countries are pulling workers out of the U.S. job market before Microsoft can get to them. "It's driving innovation offshore and jeopardizing our competitive edge as a nation by closing the door on the best workers out there," he says. In March, Microsoft Chairman Bill Gates called on Congress to lift the visa cap (see BusinessWeek.com, 3/8/07, "Gates to Senate: More Visas").

At this point, the only way for MBA candidates without visas to work in the U.S. without months of lost time is through new legislation. On Apr. 12, Senator John Cornyn (R-Tex.) reintroduced a bill that would increase the H-1B cap from 65,000 to 115,000 visas, and allow for flexibility as the market demands. It would also exempt U.S.-educated professionals with advanced degrees in math, science, technology, or engineering from the 20,000 Master's degree cap.

Business schools are encouraging students, faculty, and employers to urge their representatives to take action on this bill. Jonathan Masland, senior associate director of the career-development office at Dartmouth's Tuck School of Business, created a Web site that overviews current legislation, gives links to relevant literature, and shows people how to contact members of congress. "To not have the option to work here after spending money and becoming a part of the community segments students," Masland says. "If we can get thousands of MBAs to be a part of this, it will send a message to Congress."

U.S. Citizens First

Opponents of H-1B visa expansion, particularly labor groups such as the AFL-CIO, charge that the visas displace American workers (see BusinessWeek.com, 2/8/07, "Work Visas May Work Against the U.S."). On Mar. 29, Senators Chuck Grassley (R-Iowa) and Dick Durbin (D-Ill.) introduced a bill that would require companies to pledge that they attempted to fill positions with American workers before applying for an H-1B for a foreign employee.

But while the fight over the visa program gets swept up in larger debates over immigration and outsourcing, students such as McCombs' Sehgal are left to ponder their options. The finance professional said if he had known at the time he was applying for MBA programs what a complicated proposition getting a visa is, he would have considered programs in another country. "When you're starting out, risks are magnified," he says. "If I would have known this, I would have looked at other options."

Lease is an intern for BusinessWeek in New York

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