The re-election of Donald Trump as U.S. president has reignited an old debate between his hardline America-first supporters and prominent business leaders who broke for him in the 2024 election, particularly those in Silicon Valley who supported the former and future president despite their region’s reputation as a liberal stronghold.
On the one hand, you have Trump’s traditional MAGA base decrying the H-1B visa program for foreign workers for undercutting American wages and betraying Trump’s American First battle cries. On the other, you have tech giants like Elon Musk — the world’s richest man and an H1-B recipient himself — who loudly vowed to “go to war” to protect H1-Bs before backpedalling to say the program is broken and in need of major reform.
A key voice missing in the debate, however, is international students, says Emmanuel “Manu” Smadja, founder and CEO at MPOWER Financing, the leading lender to international graduate students attending university in the U.S. and Canada.
INTERNATIONAL STUDENTS AS DRIVERS OF AMERICAN INNOVATION
Emmanuel “Manu” Smadja, CEO of MPOWER: “In purely economic terms, international students contribute significantly. While in school, they spend, on average, $40,000 to $50,000 annually on tuition and school-related expenses”
“International students make up a good chunk of the 65,000 H-1B visas in the restricted or lottery pool every year. When people discuss this topic, I’d love for them to picture someone who came to the US, spent $40,000 to $50,000 annually on their degree, is now highly educated – often with a master’s degree – and is eager to contribute to the U.S. economy. That’s the archetype people should have in mind,” Smadja tells Poets&Quants.
Smadja, an international student from France over two decades ago, co-founded MPOWER while at Harvard in 2014. Last year, it financed more than 10,000 international graduate students in the U.S. and Canada with fixed-rate loans of up to $100,000. Most of these were students studying STEM-designed fields or in MBA programs.
International students make up 50% or more of the Class of 2025 at a handful of the top 25 U.S. MBA programs, and 40% or more at 16 of the top 28.
Despite the heated and, too often, ugly rhetoric that tends to erupt in immigration-related discussion these days, Smadja says the majority of international students are still bullish about the value and benefits of an American education. Those who stay to work here have helped make the US a leader in industries like AI, tech, and rural healthcare.
“The United States has thrived on its tradition of offering opportunities to talented and dedicated individuals from around the globe,” says Smadja. “Sustaining this momentum and implementing policies to enhance these efforts will drive American innovation and build connections with future global leaders.”
NUMBER OF INTERNATIONAL STUDENTS FELL IN TRUMP’S FIRST TERM
During Trump’s first term, fewer international students attended U.S. colleges and universities, mainly due to the perception that the US had become less welcoming to immigrants. The students also faced prolonged wait times for their F-1 student visas. In June 2020, Trump signed an executive order temporarily suspending most visas for foreign workers through the end of that year.
Looking ahead to Trump’s inauguration on January 20, some U.S. schools, including Harvard and MIT, have advised their current international students to return to campus over concerns that he might impose travel bans. Business school admission teams and even private MBA consultants are also fielding more questions about American visa and work policies.
Still, Smadja remains cautiously optimistic. The debate, and some proposed policy reforms, could actually strengthen the H1-B visa program for international students.
“Is this the ideal environment for immigration? Probably not. But I’m still a strong believer in the transformative power of U.S. and Canadian education,” he tells P&Q. “The fundamental value of a U.S. degree hasn’t diminished.”
In this interview, we talk with Smadja about the economic and innovation engine powered by international students, possible reforms to the H1-B, and why the students shouldn’t be disregarded amidst the larger debate. Our conversation has been edited for length and clarity.
Can you start by explaining MPOWER’s mission and why international students are an asset to the US economy and education system?
MPOWER’s mission is to empower the brightest minds around the planet to achieve their full educational potential. It’s a mission that resonates personally with me and the 300 people who work at the company. I was an international student myself 25 years ago, moving from France to the U.S.
International students are a tremendous asset to any country they go to. There’s sometimes a misconception in the receiving country that skilled immigration is about importing people, but in reality, it’s about exporting something even more valuable – in the case of the U.S., that’s the education system and its values. These students, if they stay in the U.S., naturally start embracing democracy, the American dream, and capitalism. Whether consciously or unconsciously, they absorb these values. If they return to their home countries, they become soft ambassadors for the U.S., bringing those ideas back to places like France, India, China – wherever they came from.
There’s also a misconception that this is just about immigration. The truth is, international students are part of a process where the U.S. exports one of its most valuable assets – its education system and its values. It’s essentially a soft peace process in motion.
In purely economic terms, international students contribute significantly. While in school, they spend, on average, $40,000 to $50,000 annually on tuition and school-related expenses. Collectively, that’s about $43 billion a year, according to the Department of Commerce. If they return home, they use their acquired knowledge to benefit their own countries while fostering business and diplomatic ties with the U.S.
If they stay in the U.S., whether on an H-1B visa or another pathway, they contribute even more directly to the economy. Just think about the CEOs and co-founders of Microsoft, Tesla, Google, and IBM – all former international students. Famous, or infamous, they’ve made a huge impact on the U.S. economy and continue to drive its innovation engine.
What are your thoughts on the discussions surrounding H-1B visas, especially in light of rhetoric around immigration and the election of Donald Trump? What do you think is missing from the debate?
The first thing that comes to mind is that the most relevant voice in this H-1B process – international students – is missing from the debate. International students make up a good chunk of the 65,000 H-1B visas in the restricted or lottery pool every year. Many of those visas go to former international students. When people discuss this topic, I’d love for them to picture someone who came to the U.S., spent $40,000 to $50,000 annually on their degree, is now highly educated – often with a master’s degree – and is eager to contribute to the U.S. economy. That’s the archetype people should have in mind.
Then there’s the 20,000 specific pool of visas reserved for individuals with graduate degrees from U.S. institutions, which are essentially 100% international students. It’s striking that, in the back-and-forth debates – between tech advocates on one side and the more hardline anti-immigration rhetoric on the other – international students are rarely mentioned. Yet they are the core constituency of the H-1B visa program. Putting a face to H-1B holders as international students could make the issue more tangible and help dispel misconceptions about who these visa holders are.
There’s also room for a practical compromise. Some companies outside the U.S. might overuse H-1B visas to bring people directly from overseas. There’s a finite number of H-1B visas – 65,000 annually – and prioritizing international students educated in the U.S. could make sense. That’s where some of the prior Trump administration’s policies around a minimum salary – $60,000, $70,000, $80,000 – could actually favor people who got a graduate degree in the U.S. Expanding the pool or prioritizing between those who got a degree in the U.S, or a graduate degree, or a STEM degree in the U.S. versus not, could also be useful.
Another potential improvement could involve redefining the cap exemption for H-1B visas. Currently, universities, nonprofits, and think tanks can sponsor as many visas as they need without being subject to the cap. Expanding this exemption to include companies or startups working in strategic areas – like AI, quantum physics, or cancer research – could be beneficial. Such organizations are critical to U.S. innovation and competitiveness, and removing restrictions for them would require minimal legislative change. It would simply involve redefining what qualifies as an H-1B cap-exempt organization.
Any other policy reforms you believe would streamline the process for international students?
One key reform would be aligning and streamlining the interview questions and processes across consular offices. Right now, we’re seeing very different experiences depending on the country. For example, students in West Africa – at consular offices in Abuja, Lagos, or Accra – are often asked questions that would never come up in New Delhi, Beijing, or Mexico City. Standardizing the process would make it fairer and more predictable for everyone.
Another reform could take inspiration from Canada’s system. In Canada, all visa processing is centralized through Ottawa, and there’s no physical interview required, particularly for graduate students who have already been admitted and are fully funded. What’s the purpose of interviewing these students? While exceptions could be made for edge cases or random samples, the vast majority of applicants don’t need to go through such an outdated and cumbersome process. The current system, where students must schedule individual interviews six to twelve months in advance due to backlogs, feels incredibly archaic compared to what’s possible with a centralized, exception-based process.
To offer a glass-half-full perspective, we do appreciate consular offices that prioritize F-1 visa processing over other types of visas, like tourism visas. They recognize the urgency of these cases and the immediate economic contribution that international students bring to the U.S.
What are you hearing from the international students you serve about the current climate and rhetoric in the U.S.? Are they considering going to Europe or other places instead of pursuing business education in the U.S.?
We’re not seeing anything drastically different, but I think there’s a bit of option value in play. Students are trying to parse through the noise, and there’s a lot of it. Particularly in the media. For example, in Indian media, which is relevant as India is our biggest market, you see a wide range of opinions in the press. Students are navigating through all of that.
In general, students coming to us, especially at the MBA level, are fairly sophisticated. What we’re seeing is that they’re hedging their bets. They’re applying to different places and considering programs with shorter durations. If they were originally thinking about a two-year MBA, they might now be looking at one-year MBA programs for a better return on investment. They’re also focusing on STEM-designated degrees to take advantage of the three-year Optional Practical Training (OPT) period.
We advise our students to start the F-1 visa process earlier to account for any potential backlogs at embassies. We also partner with visa preparation agencies to help students get ready for their interviews, organize their files, and ensure everything is in order. Given the possibility of tighter processes at consular offices, preparation is key.
Additionally, we encourage students to have their documentation and story ready when they arrive in the U.S. For example, if they’re randomly questioned at the border in airports like Chicago or JFK, it’s important they can clearly articulate why they’re in the U.S. Even though they might be exhausted after a long flight, having their story straight can prevent issues.
Overall, we’re still seeing massive growth in demand for American degrees. Our goal is to ensure students are fully prepared so that administrative hurdles don’t stop them anywhere along their journey.
Have you done any preparation for a scenario where stricter visa policies are enacted, or do you think that’s unlikely?
Between 2016 and 2020, we experienced a more anti-immigration and anti-H-1B environment than what we’re seeing today. At least now there’s a more balanced discussion with additional voices at the table. Back then, that wasn’t the case. For example, three key policies were proposed during that period:
- Minimum salary for H-1B visas: This would have been beneficial for MPOWER’s demographic, particularly graduate students, MBA students, and those in STEM fields. It would have been a net positive for us.
- Field of study alignment: This proposed policy required that a student’s job directly align with their field of study. That would have been a net negative, as it could impact students with interdisciplinary skills. For example, someone with a history or mechanical engineering degree who’s proficient in coding and wants to work in software engineering might not meet such strict criteria.
- H-1B allocation preferences: This policy suggested prioritizing graduate students over others in the H-1B lottery pool. Again, this would have been favorable for MPOWER’s demographic.
There was also more extreme rhetoric, like rolling back the OPT extension, but such ideas never made it into formal proposals. Those seemed more like political theater – extreme positions meant to create an anchor point for passing less drastic measures.
Today, we view the situation with cautious optimism. If anything gets done, it could be net positive for international students and our mission. Our most pessimistic scenario is that nothing changes, and we continue waiting for much-needed immigration reform at all levels.
Have you heard anything from U.S. schools about their reliance on international students and how they’re responding to the current environment?
There’s definitely a lot of angst among schools, and understandably so. Many of them are heavily dependent on international students – not just in terms of enrollment but also financially. Some schools have 20% to 30% international students, but because these students often pay full tuition, they contribute an even larger share of the schools’ revenue, and by extension, their profits.
We’re not entirely sure if schools are taking new approaches in response to the current political climate or if their actions are more about responding to growing global competition for students. We are hearing about more active recruiting efforts, though.
There are also a couple of micro-trends we’ve noticed. Some schools are rebranding or repackaging degrees to align with tech trends. For example, they’re taking traditional computer science programs and marketing them as AI master’s degrees. In practice, these programs are often just computer science degrees with a slight focus on AI, but the rebranding helps them appeal to students interested in cutting-edge fields.
Another trend is that more MBA programs, particularly those outside the top tier, are adopting the Canadian or European model of one-year MBA programs. It’s a smart move for these schools, as it offers a different value proposition. Students graduate faster, re-enter the workforce sooner, and save money on tuition. For schools that can’t compete with institutions like Harvard, Wharton, or Stanford on prestige, competing on price and ROI is an effective strategy. Condensing programs into one year is one way to achieve that.
Do you think Elon Musk’s involvement in this debate, and similar influences, could shift the conversation around immigration policy and curb some of the anti-immigration rhetoric?
It’s possible, but it’s hard to say with certainty. A lot of this feels speculative, especially with the way opinions and positions are communicated – often through tweets or statements. For example, Trump has recently made some of his most pro-H-1B comments ever. Back in 2016, he mentioned wanting to attach a green card to any international graduate student in the U.S., though he didn’t follow through on that promise. This time around, his rhetoric seems even more supportive. On a recent West Coast podcast, he suggested stapling green cards to not just graduate students but all students who study in the U.S.
He also made statements about H-1B visa holders working on his properties, which weren’t entirely accurate but were at least directionally supportive of skilled immigration. My hope is that there’s an opportunity here for a more balanced immigration package. If you’re in Trump’s position, you’re trying to reconcile opposing extremes – support for strengthening borders versus support for skilled immigration.
The challenge, and perhaps the opportunity, is separating the rhetoric around border issues from the rhetoric around skilled immigration. If they can thread that needle, there’s a chance for progress. My concern is that any package could end up being more punitive toward lower-skilled immigration, which I don’t think is a positive for the country. The U.S. needs people at all skill levels. However, in the eyes of the Senate or the American people, it might be more politically palatable to support skilled immigration if it’s paired with stricter border policies. That’s my hope, at least, and there are some early signs this might be the direction things are heading.
Why does the voice of international students matter for American business schools?
First, international students make up roughly one-third of the population at top business schools. If these students don’t attend, it creates a significant gap in classrooms. Financially, they contribute disproportionately because they don’t receive federal assistance. This revenue is critical to schools’ operations and, ultimately, their success.
Second, international students bring invaluable geographic diversity to classrooms, enriching the learning experience for everyone. They share unique perspectives – like running a business in Colombia or working for a family office in the Middle East – broadening the minds of their American classmates while expanding their own understanding. This kind of diversity and global exposure is essential in preparing students to lead in an interconnected world.
Another point often overlooked is that international students tend to have high GMAT scores, which factor into school rankings. Their presence boosts a school’s average GMAT and GRE scores, positively influencing its ranking. This is particularly true for master’s programs in STEM fields.
Beyond the impact on schools, international students contribute significantly to the U.S. economy. They spend $43 billion annually, making education one of America’s largest exports. A deeper look at where this money is spent reveals something even more compelling: a significant portion goes to red states or cities – areas that often experience more acute labor shortages. These regions benefit greatly from both the financial input and the skilled workforce international students bring. Ironically, places that may appear to be the most resistant to immigration at a macro level often depend on it the most at a micro level.
Are you going into 2025 optimistic about the rhetoric and what’s ahead, or are you more concerned?
I’m generally an optimistic person – it’s a trait I think every CEO needs. So yes, I always believe tomorrow will be better. Is this the ideal environment for immigration? Probably not. But I’m still a strong believer in the transformative power of U.S. and Canadian education.
We analyzed data on our students and found that their salaries after graduation are, on average, 15 times higher than what they were earning before if they stay in North America. Even for those who leave the U.S. or Canada, their earnings are still eight times higher. This highlights the immense value of these degrees. And while staying in the U.S. or Canada might not always work out, returning to places like Germany, the UK, Australia, or the Middle East is far from a bad outcome.
I remain optimistic about the U.S.’s ability to continue attracting the best and brightest students. The fundamental value of a U.S. degree hasn’t diminished.
Another reason for optimism is the U.S.’s leadership in technology. Advances in AI, quantum computing, and medical research – like the rapid development of the COVID vaccine – demonstrate the country’s capacity for innovation. The potential applications of these technologies, especially in pharmaceuticals and healthcare, make me excited for what’s ahead.
Anything else you’d like to add?
One thing I’d like to emphasize is a call to students: you’re going to encounter a lot of information and disinformation in the media, and social media won’t make things any easier. It’s crucial to focus on the fundamentals – understanding the value of a U.S. education, what you’re getting in return, and looking at the actual statistics. Parsing out the real data from the noise is essential.
For many international students, the U.S. political system and media can feel very different from what they’re used to. Coming from countries where politicians are quieter and media is less sensationalized, it can be overwhelming to navigate what seems like chaos. You might find yourself wondering, are Americans crazy? Or is this just another form of entertainment here, with the media and politicians adding to the spectacle? It’s important to step back and realize that, in the midst of all this noise, there are real opportunities and facts to be found. Putting things into perspective and focusing on what really matters can help students make informed decisions about their education and future.
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