TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Sunday, January 7, 2018

NY Times: As Flow Of Foreign Students Wanes, U.S. Universities Feel The Sting

New York Times, As Flow of Foreign Students Wanes, U.S. Universities Feel the Sting:

Just as many universities believed that the financial wreckage left by the 2008 recession was behind them, campuses across the country have been forced to make new rounds of cuts, this time brought on, in large part, by a loss of international students.

Schools in the Midwest have been particularly hard hit — many of them non-flagship public universities that had come to rely heavily on tuition from foreign students, who generally pay more than in-state students.

The downturn follows a decade of explosive growth in foreign student enrollment, which now tops 1 million at United States colleges and educational training programs, and supplies $39 billion in revenue. International enrollment began to flatten in 2016, partly because of changing conditions abroad and the increasing lure of schools in Canada, Australia and other English-speaking countries.

And since President Trump was elected, college administrators say, his rhetoric and more restrictive views on immigration have made the United States even less attractive to international students. The Trump administration is more closely scrutinizing visa applications, indefinitely banning travel from some countries and making it harder for foreign students to remain in the United States after graduation.

While government officials describe these as necessary national security measures, a number of American colleges have been casualties of the policies. ...

Nationwide, the number of new foreign students declined an average of 7 percent this past fall, according to preliminary figures from a survey of 500 colleges by the Institute of International Education. Nearly half of the campuses surveyed reported declines.

Now that the revenue stream appears to be diminishing, the financial outlook may be dire enough to weigh down the bond ratings of some schools, making it more expensive for them to borrow money, according to Moody’s Investors Service. Last month, Moody’s changed its credit outlook for higher education to “negative” from “stable.”

“Growing uncertainty for international student enrollment stems from immigration policies that are in flux,” Moody’s said, warning that universities without global brand recognition would be hit hardest. While some flagship public and elite private colleges have been affected, the Institute of International Education said, the biggest impact will be felt by second-tier institutions.

The shift comes just as some states also are experiencing a drop in domestic students, partly the result of a decline in birthrates two decades ago. This year, the number of domestic undergraduate students dropped 224,000, or 1 percent, according to the National Student Clearinghouse Research Center.

Legal Education | Permalink


Could these universities cut back on the administrative bloat? Naw, that'd be too radical. Better to blame Trump.

Posted by: Michael W. Perry | Jan 7, 2018 9:40:40 AM

224,000 is 1%? That sounds a little off to me, but nevertheless a good start. We need far fewer college students.

Posted by: sestamibi | Jan 7, 2018 2:44:04 PM

A major factor is the rapid population collapse in the PRC. An article in 2015 in The Economist noted that their were 121 million college-age Chinese (age 18-22) in 2010, but only 90 million in 2015, and projected to be around 70 million in 2021.

Posted by: Roland Hirsch | Jan 7, 2018 5:08:01 PM

IIRC, international students accounted for 3.5% of total enrollment. This is, with scant doubt, a ploy for more swag from the public treasury.

Many state systems are badly overbuilt and relying on marginal students wasting their time and money failing to get a degree. Time to squeeze the pus out by closing instituitons and closing marginal programs at surviving institutions. And it's time for the federal government to quit subsidizing higher education and to dramatically reduce compliance costs they impose on such institutions.

Posted by: Art Deco | Jan 8, 2018 9:52:27 AM