Faced with a dismal US job market, the pressure on foreign students with young families can be intense. “I have applied for 20 jobs, but many US recruiters won’t even offer an international student an interview. They just don’t want to take on the extra cost and hassle of sponsoring H-1B visas,” said Mohsin Khan, who will soon earn a doctorate in electronic engineering from a college in New York.  

At 27, Khan feels responsible not only for himself but for his newborn child and wife. He says that if he doesn’t find work in the next few months, it will be easy to dismiss his American odyssey as a failure. “I will probably have to take a much lower paying job in Pakistan to pay off $60,000 in living costs I incurred in the US,” said Khan who juggled his course work and job search with a long-distance relationship with his wife and child in Pakistan.

Sonia Shah earned a MBA degree from a Big Brand B-school after working for several years in the back-office of an American financial services firm. By bursting into the boys’ club with a MBA degree from an Ivy League college Shah had every reason to expect an easy passage into a Wall Street career, lavish bonuses, long client dinners and late-night rides home passed out in a Manhattan Town Car.

Blows from a Recession

But precious little goes according to plan during a full-blown recession. Shah lost her high-paying bank job even before she could step into her new office. Bank of America Corp, the biggest US bank, withdrew 50 job offers it had made to foreigners holding MBAs. Shah was one of the casualties.     

Students worry incessantly about their student loans because the US job market is “very soft

Financial institutions like the Bank of America which used funds from the US government’s Trouble Asset Relief Program (TARP) were restricted from applying for H1-B visas for foreign workers until they paid back the bailout funds. Now most of the top US banks including JPMorgan Chase, Goldman Sachs, American Express, Bank of New York Mellon, State Street as well as regional banking giants Capital One, BB&T and US Bancorp have managed to pay back TARP funds. However, smaller US banks, financial firms, car companies and insurance firms still have to pay back roughly $255 billion in TARP funds and are restricted from sponsoring H1-B visas.

“I went to a great business school, majored in finance and had a good resume. Yet I had rotten luck finding a job for nearly a year,” said Shah. After the Bank of America disappointment, Shah camped on a friend’s couch in Manhattan, while networking furiously at job events and cocktail parties.

“I finally found a job in a boutique consultancy firm,” says Shah who is planning to save as much as she can from her salary to pay off her $120,000 student loan. She said she paid $86,000 towards tuition and $34,000 for food, rent, laptop, books and medical insurance.

Shah says that despite finding work she and her friends worry incessantly about their student loans because the US job market is “very soft.” Earlier people like Shah from A-list business schools like Harvard, Stanford, Wharton, Columbia, Chicago, Kellogg, Stern, Sloan and Darden didn’t think twice about loan repayments as they were very much in demand on Wall Street which paid starting salaries of $92,000 with fat bonuses.

Less Favorable to Immigrants

With soaring unemployment hammering the US, many firms are less favorably disposed to hiring immigrants.

But a great deal has changed in the current job scenario. With soaring unemployment hammering the US, many firms are less favorably disposed to hiring immigrants. Some say they don’t fancy going through the hassle and expense of sponsoring H1-B visas for foreign hires.   

“Companies just feel there is no point wasting resources training South Asian students if they can’t be recruited because of visa hassles,” said Advaitha Arunkumar, a MBA student from Fordham University in New York.

Advaitha plans to return to India after getting her US degree as she sees better work opportunities in her home country.

US immigration policies have forced many top science and engineering researchers to leave the US after completing graduate educations and, sometimes, brief stints of employment on H-1B visas. Aside from disliking the restrictive immigration policies, many South Asians, particularly Indians studying in the US now feel that better opportunities lie at home than in America. Of the more recent Indian Institutes of Technology (IIT) grads, 84% chose to remain in India, according to business research firm, Evalueserve.

But every third alumnus of the IITs went abroad from 1964 to 2001, mostly to the US. The American Dream that anybody can make it in the US through hard work had a hold over the Indian psyche for many years. Of course, India-educated stars like Indra Nooyi of PepsiCo, Vikram Pandit of Citi Bank and legions of Silicon Valley millionaires like Sun Microsystems co-founder, Vinod Khosla embodied the American Dream.

Quality Education for Life

Academics say that making it harder to hire foreigners is not good economic policy, but short-sighted xenophobia as the US will need foreign talent when the economy turns up.

Meanwhile, some feel they still have a decent chance to scale the walls and achieve what they wish in America. Barkha Kumar, a third-year engineering student in Cooper Union for the Advancement of Science and Art, in New York enjoys a $33,000 full-tuition scholarship. She also has a paying summer internship at Swiss bank UBS AG.

“It’s been much harder than I thought it would be. But I was lucky to get an internship offer from two Swiss banks,” said Kumar.

Tarun Kumar, an engineering grad from New York University, will start work soon as an information technology strategist at a US telecommunication giant; “I don’t look at education as a financial thing. It’s a lifelong thing. I feel happy with the decision to get an American engineering degree.”

Academics say that making it harder to hire foreigners is not good economic policy, but short-sighted xenophobia as the US will need foreign talent when the economy turns up.

“America is the top destination for foreign students, but if they get the signal that the US doesn’t want them, then they will head to the United Kingdom and Australia,” said Vivek Wadhwa, a Duke University adjunct professor who conducts research into the immigrant jobs market.

“Foreign students have to be able to work in the US after their graduation to pay back their student loans,” he added.