International Students: A Cure For Higher Education’s Fiscal Ailments

A multi-ethnic group of college age students are working on a group assignment in a classroom on campus. They are using a computer to do research online.

On a recent flight from Boston to Atlanta, the woman sitting next to me introduced herself and asked me what I do for a living. I told her I work for a company that helps universities internationalize, and helps international students succeed at those universities.

“Why on earth would you want to do that?” she asked. “Those international kids are taking seats away from American students.”

I explained to her that across America, college enrollment rates have been gradually declining after peaking in 2011. Last year alone, enrollment dropped 1.4 percent. This, coupled with a continued decline in state expenditures, has resulted in many colleges and universities scrambling to fill seats. International students not only provide a positive cultural impact, but provide a compelling economic benefit to the campuses and communities in which they reside.

I was able to change my seatmate’s mind, but overall there remains a lack of knowledge on the broader impact these international students provide. Like any industry facing rising costs and falling income, colleges and universities have been looking for ways to grow revenue. In 2012, I co-authored a paper with Jeff Denneen called “The Sustainable University.” In it, we argued that in order to address the unsustainable financial models that many colleges and universities face, we need to focus on new programs and innovations that unlock real value.

In the five short years since then, the risks we wrote about – rising tuition costs, decreased public funding and the financial shortfalls – have all worsened. But we have also seen that strategic and thoughtfully implemented programs that appeal to international students not only improve the educational experience of domestic students, but also provide much needed revenue for universities.

Recent research supports this thesis. For example, a working paper published last month by the National Bureau of Economic Research reports that “increases in the enrollment of foreign students generate substantial gains in university tuition revenues, which partially offset the loss in appropriations [from state funding cuts].” The report concludes that “in the absence of the pool of foreign students, many universities would have faced larger cuts to expenditures and potentially greater increases in in-state tuition charges.”

The economic impact on the national level is significant as well. Across the U.S., the more than 1 million international students who studied in the U.S. last year generated over $35 billion for the U.S. economy. This represents a direct inflow of foreign capital to support U.S. universities and state and local economies. Looking at job creation, the numbers are equally compelling – international students were found to support over 400,000 jobs nationally. This equates to three U.S. jobs created or supported for every seven enrolled international students.

Even more encouraging, the financial benefits of enrolling international students extend beyond the campus itself. A research study just released by the Brookings Institution analyzed 16 regions and concluded that in areas that would otherwise likely face economic hardship as a result of industrial job loss, colleges and universities act as an antidote, anchoring tax revenue, a wide variety of jobs, and often supporting industries that benefit from an educated and young workforce.

When skeptics like my seatmate hear these facts, support for international study programs rises dramatically. At a time of great concern over the fiscal health of our colleges and universities, examples of “win-win” solutions are hard to come by. And this economic story goes hand-in-hand with the powerful societal benefits of international education programs. American students benefit from attending schools with a greater diversity of ideas and perspectives from their international peers, while international students return to their home countries with a world class education and a better understanding of America and our values.

The economic and cultural benefits of international education are overwhelming and only getting better. For the future of our education system and our economy, this is one secret that needs to get out.