Universities and International Students

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The world is complex. One of the problems in making public policy is that for every action, there is a reaction that isn’t anticipated and usually isn’t desired.

Rules about immigration and visas are a case in point.

International students have formed a core resource for many smaller, private colleges in the US as well as for graduate programs at larger universities.  That core is eroding, leaving the future of some schools and programs in doubt. (7)

Education isn’t factored into the US balance of payments, but it should be. It’s been a major source of funds for the US economy. Students from elite families in Europe, the Middle East, Latin America and Asia don’t get financial aide at US schools. Instead they pay full freight, bringing hard cash into the US economy. Overall, more than 85% of all college students in the US receive financial aid, as compared with 20% of international students studying in the US. (2,)

In 2015, there were over 1 million foreign students in US colleges and university, accounting for 5% of the total student population. The top schools for hosting international students (undergrad and graduate) were

  • NYU
  • USC
  • Columbia
  • Arizona State
  • Univ. of Illinois
  • Northeastern (3)

The top schools in terms of the percent of undergraduate enrollment from outside the US are

  • Florida Institute of Technology (32.9% from outside the US)
  • New School (31.7%)
  • Illinois Institute of Technology (29.8%)
  • Univ of Oklahoma (26.7%)
  • Lynne Univ (23.0%)
  • Carnegie Mellon Univ (20.9%)

While domestic applications for graduate school have declined over the last 10 years, until very recently, growth in international applications had increased. In 2015, 2/3 of the applicants for graduate programs at Cornell were international students.

The US is experiencing a troubling drop-off in applications from international students for graduate and professional degrees at US universities. The slowdown started in 2015, and may have been exacerbated by election campaign rhetoric and travel bans.

Demand for MBA degrees started to slide domestically almost a decade ago. Schools changed their product offerings — basically reinventing themselves — to survive financially. (8) As tuition and fees have soared, fewer Americans could afford or found adequate value in these degrees. Online courses created new options. They weren’t necessarily better than traditional classroom instruction, but they were (and remain) cheaper.

Like many smaller private colleges, some MBA programs turned to foreign students to fill enrollment gaps left by the flagging demand in the US. In the example of the University of Rochester’s Simon Business School,

The school recruited in more than a dozen countries last year, holding events in Buenos Aires, Cairo, Taipei, and Istanbul, among other cities. The efforts reflect the school’s “very strong commitment to global diversity within its student body,” says Rebekah Lewin, assistant dean of admissions and financial aid at Simon, where about half of the 98 full-time MBA students in the class of 2017 are from overseas. (6)

However, the international market for the US MBA is now easing. In 2014, 60% of MBA programs saw growing applications from overseas. That fell to 39% in 2015, and to 31% in 2016.

STEM programs rely on international students, and there has been a worrying drop in applications. (5)

  • UMass has seen a 30% drop in international applications for electrical and computer graduate programs this year.
  • Vanderbilt has seen an 18% drop in international student applications for its graduate engineering school.

A decline in international students will affect universities financially. As noted in the Science article,

Such declines could have a major impact on a university’s bottom line, although calculating its magnitude is not straightforward. The federal government heavily subsidizes graduate education in the sciences and engineering, so most doctoral students don’t have to worry about tuition bills. But universities generate considerable revenue from professional master’s degree programs, a subset of all master’s training. And in those programs, international students at public universities pay tuition rates that are much higher than for in-state students. (5)

So, one of the unintended consequences of the current anti-immigrant hoopla may be a hit on the value of the US dollar as well as a weakening of higher education in the US. Whether we see a demand for taxpayer bailouts, or we see programs and schools simply close, remains to be discovered.

That  makes the decision by New York State to make college free to residents earning less than $125,000 per year triply smart:

  • The action alleviates pressure on schools from declining overseas applicants;
  • It provides a major incentive for the workforce to stay in the state;
  • It frees up money that consumers can use to fuel the local economy.

Sources:

  1. Reem Heakel, “What Is the Balance of Payments?” Investopedia, 19 April 2017. http://www.investopedia.com/articles/03/060403.asp
  2. National Center for Education Statistics, “Fast Facts.” https://nces.ed.gov/fastfacts/display.asp?id=31
  3. Laura McKenna, “The Globalization of America’s Colleges,” The Atlantic, 18 November 2015. https://www.theatlantic.com/education/archive/2015/11/globalization-american-higher-ed/416502/
  4. Caroline Howard, “50 Best Colleges for International Students 2016,” Forbes, 28 Sept. 2016. https://www.forbes.com/sites/carolinehoward/2016/09/28/50-best-u-s-colleges-for-international-students-2016/#5a21f1137566
  5. Jeffrey Mervis, “Drop in foreign applications worries US engineering schools,” Science, 14 February 2017. http://www.sciencemag.org/news/2017/02/drop-foreign-applicants-worries-us-engineering-schools
  6. Nick Lieber, “The Selling of the American MBA,” Bloomberg, 26 March 2016. https://www.bloomberg.com/news/articles/2016-03-18/the-selling-of-the-american-mba
  7. Stephanie Saul, “Amid ‘Trump Effect’ Fear, 40% of Colleges See Dip in Foreign Applicants,” 16 March 2017. https://www.nytimes.com/2017/03/16/us/international-students-us-colleges-trump.html?_r=0
  8. Sherrie Negrea, “The new business of b-schools,” University Business, 22 January 2016. https://www.universitybusiness.com/article/new-business-b-schools
  9. Ferran Powell, “10 Universities That Attract the Most International Students,” US News and World Reports, 5 July 2016. https://www.usnews.com/education/best-colleges/the-short-list-college/articles/2016-07-05/10-universities-that-attract-the-most-international-students

 

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One thought on “Universities and International Students

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