To paraphrase Charles Dickens, MBA demand has largely been a tale of two MBA markets in recent years. Many second-tier business schools have struggled in recent years to recruit candidates to their full-time MBA programs, while the more highly ranked MBA programs have generally reported ever increasing numbers of applicants to their programs.

Not any more. MBA applications at many of the most highly selective business schools in the U.S. are plunging, in many cases by double digits. An analysis of preliminary 2017-2018 application data by Poets&Quants reveals some shocking declines. At Rice University’s Jones Graduate School, for example, candidates to the school’s full-time programs plummeted by 27.7% to just 587 applications from 813 a year earlier.

At the McCombs School of Business at the University of Texas-Austin, applications fell 19.6%. At the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill, applicants declined by 18.3%. Applications dipped 16.2% at Georgetown University McDonough School of Business, while they fell 13.2% at Indiana University’s Kelley School of Business (see below table).

MANY EXPECTED DECLINES OF BETWEEN 4% AND 5% BUT THE DECLINES ARE MUCH MORE SEVERE

Many schools have yet to release numbers, including Harvard, Stanford, MIT Sloan, Chicago Booth and Northwestern Kellogg, but declines are expected in applications to their MBA programs as well. It is known, for example, that Harvard Business School apps fell below 10,000 this past year, from a near record 10,351 in 2016-2017. Wharton has already disclosed a 6.7% drop in applications for 2017-2018. UC-Berekeley’s Haas School of Business saw a 7% decline.

The declines, moreover, appear to be across the board, though the severity of the drops vary from school to school. At Yale University’s School of Management, applications fell 7.6% to 3,785 from 4,098. At the University of Michigan’s Ross School of Business, MBA apps are down by 8.5% to 3,188 from 3,485. At Duke University’s Fuqua School of Business, applicants fell by 6.2% to 3,557 from 3,796 a year earlier.

Many of these highly selective schools have deep applicant pools and are still turning away the vast majority of those who apply to their programs. So school officials say that this year’s drop has not had an impact on the overall quality of their latest incoming classes. And in some cases the falloff is occurring after several years of growth. “We were coming down off of a ten-year high in applications,” points out Tina Mabley, assistant dean of the full-time MBA program at McCombs. “We had been going up when some other schools were experiencing drops. So it hasn’t been that much of a concern.” At McCombs, she says, most of the decline was in international applicants.

‘THE U.S. IS LOSING THE PIPELINE OF TALENT’

Still, those drops have significantly boosted acceptance rates. At Rice’s Jones School, ranked in the top 25 for its MBA program by Poets&Quants, the admit rate jumped to 39.2% from 27.0% a year ago. The acceptance rate at Georgetown’s business school zoomed to 55.2% from 47.8%, while UT McCombs saw its admit rate go to 33.6% from 28.0%.

Though many admission officials were predicting declines in the 4% to 5% range this year, largely because of fewer international applicants applying to U.S. schools, the drops are far more severe and troubling. There are several obvious culprits for the downswing, but many business school officials are largely blaming the political climate in the U.S. For the first time ever, fewer than half the prospective students for a full-time MBA program now want to study in the U.S., according to the most recent survey of prospective students by the Graduate Management Admission Council.

“There’s no doubt that immigration policy is having a negative impact on U.S. business schools,” says William Boulding, dean of Duke University’s Fuqua School and the new chair of GMAC. “You’ve seen growth in business schools outside the U.S., but the U.S. is losing the pipeline of talent. If we are going to maintain our reputation for having the best business schools in the world, we have to be able to attract the best and brightest in the world. Student mobility has become a big issue (see Fuqua Dean: Immigration Policy Hurting U.S. Business Schools).”

A WHOPPING 27.7% PLUNGE IN APPLICATIONS AT RICE UNIVERSITY’S JONES GRADUATE SCHOOL OF BUSINESS

The GMAC report found that 47% have a preference for the U.S. now, down nine percentage points from 56% in 2016. Meantime, Western Europe has become significantly more popular. Today, 33% of would-be, full-time MBA students prefer to study in Western Europe, up seven percentage points from last year’s 26%. In a single year, the European schools have closed the gap between them and the U.S. by an astounding 16 percentage points.

Rice University’s business school sufferred one of the largest declines — a 27.7% year-over-year drop in full-time MBA applications — exacerbated by last August’s Hurricane Harvey which dumped 51 inches of rain on greater Houston in two days. The catastrophic storm shut down everything. “We were completely underwater,” recalls George Andrews, associate dean of degree programs for the Jones Graduate School of Business. “We had two weeks of cancelled classes and we missed two months of international travel for recruiting events internationally last fall.”

At first, the early declines were attributed to the disruption caused by Harvey. But then, the numbers continued to fall. “One hundred percent of our decline was international,” adds Andrews, “with applications from India and China down by 40%, give or take a percent. Our domestic applications were actually up. When we talked with other schools about the falloff, the political climate was something that got mentioned regularly.”

‘THIS IS THE FIRST TIME WE EVER HAD STUDENTS DENIED VISAS TO COME TO SCHOOL’

Anti-immigration rhetoric along with greater uncertainty over work visas have scared off many international applicants. But Andrews says it is even worse than that. “Many prospective candidates talked about knowing friends who were having trouble getting back and forth between the U.S. and their home countries. The perception is that they were being harrassed with more searches at airports. If they got a student visa, there was a real worry that they wouldn’t be able to finish the program.”

Some admitted students from overseas, in fact, have even had trouble obtaining student visas once admitted. “We had three students who were ready to enter the class struggle with visas this year,” says Mabley at McCombs. “One ultimately came through but two didn’t and had to delay their plans to attend the program. This is the first time we ever had students denied visas to come to school.”

Of course, that is for students who were admitted. Many more internationals aren’t even trying. “Trump is scaring off internationals from considering an MBA in the U.S.,” says Jeremy Shinewald, founder and CEO of mbaMission, a leading MBA admissions firms. Shinewald’s firm has seen the number of free consultations given to potential Indian applicants fall by half in the past year. One U.S. school recently held an infomation session for its MBA program in Paris and drew only three people, down from a more typical 30-person crowd, Shinewald notes.