If you are an Indian applicant with a 740 GMAT and a carefully researched HBS essay draft open on your laptop right now, there is a number you have not seen yet: $97 million. That is how much Harvard University wants Harvard Business School to contribute to the university's consolidated operating results by fiscal year 2027, according to internal documents obtained by The Harvard Crimson. The school that sells the dream of Boston is being asked to fund the rest of Harvard's crisis. Here is what that means for you.
The financial squeeze on HBS, by the numbers
Harvard Business School generates roughly $1.1 billion in annual revenue from executive education, publishing (including Harvard Business Review), MBA tuition, and endowment distributions. Unlike Harvard's Faculty of Arts and Sciences, which draws more than half its revenue from the endowment and close to 10 percent from federal grants, HBS relies on federal funding for a negligible share of its budget. That insulation made it the obvious place for Harvard to look when federal research cuts began battering the university's balance sheet.
The ask started at $60 million in surplus contribution for fiscal year 2026 last spring. By August 2025, it had climbed to $82 million. An April 2026 presentation by HBS Chief Financial Officer Richard Melnick projected a university target of $97 million for fiscal year 2027. HBS was projected in January to finish fiscal year 2026 with a $77 million surplus, short of the $82 million target.
To close the gap, HBS outlined $29 million in expense cuts and additional revenue for fiscal year 2026: salary and benefits reductions of $4 million, $2 million in deferred IT projects, and planned cuts to catering, travel, and events. Staff attrition is being used as a cost lever. After a colleague left and was not replaced, one faculty support specialist told The Crimson his workload jumped from three or four faculty members to six.
International applications are already falling
The cost-cutting would be one story on its own. But it arrives alongside a second pressure that matters directly to Indian applicants: international demand at HBS is declining.
International students make up roughly 37 percent of the HBS Class of 2027, and about 70 percent of executive education participants come from outside the United States. Dean Srikant Datar told faculty this semester that international applications had declined by double digits, a figure HBS confirmed to The Crimson, though it noted the data were not yet final.
The drop is not unique to Harvard. A GMAC geographic mobility report published in May 2026 found that two-thirds of business school programmes in the Americas reported international enrollment declines, including 26 percent that reported significant declines of 15 percent or more. Meanwhile, programmes in Asia-Pacific and continental Europe are seeing application surges. The Trump administration's visa restrictions, including mandatory social media vetting introduced in December 2025, have made the U.S. a harder destination for Indian students. F-1 visa rejection rates for Indian applicants hit 61 percent in 2025, up from 36 percent in 2023.
For HBS, the international enrollment decline is not just an admissions story. It is a revenue story. Executive education, which depends heavily on international participants, is one of the school's largest revenue streams. Harvard Business Publishing was projected to come in roughly $10 million below its $303 million budget for fiscal year 2026, driven partly by an 8 percent drop in paid Harvard Business Review circulation.
The donor rift adds another layer of uncertainty
Fundraising at HBS tells a complicated story. New gifts and pledges fell from $145 million in fiscal year 2024 to $121 million in fiscal year 2025. But HBS is on track to raise close to $200 million in fiscal year 2026, boosted partly by donors who increased their giving in response to the Trump administration's pressure on Harvard.
That rebound, though, masks a vocal contingent of alumni who have cut their donations to $1. Several high-profile donors remain frustrated with what they view as HBS's inadequate response to the October 7, 2023 attack on Israel and subsequent campus protests. A disputed case study on divestment from companies with ties to Israel became a flashpoint earlier this year. One alumnus told The Crimson plainly: "The dean has a lot of work to do."
This donor rift may not tank overall fundraising numbers, but it signals instability in one of HBS's most important revenue relationships. For Indian applicants, the practical question is whether scholarship funding, which often comes from alumni endowments, could tighten in coming cycles.
What this means for Indian applicants
Three implications stand out.
First, the financial squeeze does not mean HBS is becoming less competitive. If anything, the combination of tighter budgets and falling international applications could make the school more selective about which international students it admits, not less. HBS will want applicants who are likely to enroll and contribute to revenue through full tuition payment. If you are an Indian IT services professional targeting HBS with a strong profile but limited ability to self-fund, the scholarship conversation may be harder than it was two years ago.
Second, the visa environment is a real strategic factor in your school list. With F-1 rejection rates at 61 percent and social media vetting causing appointment delays at Indian consulates, applying exclusively to U.S. programmes carries meaningful execution risk. Consider parallel applications to European programmes like INSEAD, LBS, or HEC Paris, where international enrollment is growing and visa processing is faster and more predictable. This is not a retreat from ambition; it is risk management.
Third, the "One Harvard" financial model means that HBS's resources are being shared across the university in ways they were not before. The school's staffing has grown from 1,840 full-time employees in fiscal year 2020 to 2,193 in fiscal year 2025, but a planned decline to 2,121 by fiscal year 2027 is already underway. Whether this affects the student experience, class sizes, or support services is worth watching.
For Indian applicants preparing Round 1 applications for the 2027-2028 class, the signal is clear: HBS remains a world-class programme, but the institution around it is under financial stress that would have been unthinkable five years ago. Build your application with full awareness of that context, and build your school list with alternatives that hedge against the U.S. visa and funding climate.
If you are weighing whether your profile is competitive enough for HBS in this environment, a detailed profile evaluation can help you calibrate your strategy before committing to a school list.
Common questions applicants are asking
Will HBS reduce its class size because of budget pressure? There is no public indication that HBS plans to shrink its MBA class. The budget pressure is being managed through expense cuts and revenue diversification, not enrollment reduction. MBA enrollment has generally increased, though it dipped slightly in fiscal year 2025.
Does the financial squeeze affect HBS scholarship availability? HBS has not announced changes to its need-based fellowship programme. But with the school under pressure to increase its surplus contribution to Harvard, the internal calculus around financial aid could shift. Applicants who can demonstrate strong post-MBA earning potential may find the need-based assessment works in their favour.
Should I avoid applying to HBS because of the U.S. visa situation? No, but you should not apply only to HBS. The 61 percent F-1 rejection rate for Indian applicants and the social media vetting delays are real operational risks. Apply to HBS if your profile warrants it, but include at least two non-U.S. programmes in your list.
Is Harvard's financial crisis unique, or are other top U.S. business schools affected? The federal funding cuts primarily affect research-heavy schools, and most top business schools are less dependent on federal grants than arts and sciences faculties. But the broader trend of declining international enrollment and visa uncertainty affects all U.S. programmes. GMAC data shows two-thirds of Americas-based programmes reporting international enrollment declines.
Related reading
Sources verified on 3 June 2026. Next review scheduled for 15 January 2028.