The U.S. attracts more than one million international students each
year, the highest number of foreign students in the world.
When the coronavirus pandemic hit the U.S., colleges and universities
were among the first institutions to close and go remote.
Most schools waited to see how the pandemic would turn out before
giving guidance to their students for the fall semester.
At the time. U.S.
Immigration and Customs Enforcement made an exception and allowed
foreign students to participate in remote learning.
But then it reversed the decision a few months later.
The latest from Immigrations and Customs Enforcement saying that there
could be a big issue with international students coming to school or
international students possibly being deported if their classes were
all online. Two days later, Harvard and MIT led a charge of more than
200 universities, tech companies and states, in filing lawsuits
against the administration to temporarily block the new rule change.
It will cause them financial hardship.
It is already causing deep emotional pain for them and their
families. The Trump administration and major U.S.
universities, led by Harvard and MIT, have reached a settlement today
that would see the White House rescind its policy announced just days
ago. Though currently enrolled, international students were granted a
reprieve. Ten days later, ICE reinforced their March guidance that
new international students wouldn't be able to enter the U.S.
if their courses go online-only.
Because it came out of nowhere, it's possible that it can come up
again in the future.
And so it's a very it's still a little bit unsettling to be an
international student because you don't know what the future could
hold. International students make up 5.5 percent of students at U.S.
colleges and universities.
They also contributed almost 45 billion dollars to the U.S.
economy in 2018.
The number of new international students in the U.S.
has declined over the last five years as students turn to countries
with more welcoming immigration policies and cheaper tuition costs.
U.S. universities and colleges rely heavily on foreign students for
tuition revenue and research and will have to reevaluate their
programs if the trend continues.
Here's how fewer international students could affect the U.S.
economy. In the last decade, the U.S.
has seen historic numbers for the number of international students in
the U.S. In 2018, more than one million international students came
to the U.S. for education, the highest it's seen in the last decade.
But in the last few years, the U.S.
has also made it harder for international students to study in the
U.S. While the visa process has become more restrictive, the practice
of regulating students can be traced back to almost 20 years ago.
There have been regulations in place that restrict the number of
international students who can come to the United States and the
terms for their stay in the United States, going back a long time,
but especially since 9/11.
And one of the reasons that the government has been so concerned
about checking in on international students is because it was
revealed that some of the terrorists in the 9/11 attacks had
overstayed student visas.
And so that was a significant reason the government has been watching
this body very closely.
Of course, that's not all international students.
But after 9/11, there was a creation of a whole system called the
Student and Exchange Visitor Information System, or SEVIS.
SEVIS is a system that tracks and monitors schools, students and their
dependents during their program of study in the U.S.
It also mandates that schools submit updated information on students
so they do not overstay their visas.
Most international students who wish to study at an academic
institution in the U.S.
apply for a temporary visa called the F-1.
The visa requires a full course load, one which may be an online
class and restricts the ability of the student to work off-campus.
Failure to meet these can lead to deportation or refusal of entry.
After student finishes their program, they have 60 days to leave the
country or, if eligible, can switch to the optional practical
training program known as OPT.
OPT allows students to temporarily work in the U.S.
from 12 to 36 months.
Timing varies depending on their major.
The work also must be directly related to their program of study.
More on that later. U.S.
colleges and universities have lost many of their revenue sources
amid the coronavirus pandemic, the American Council on Education,
which represents 1700 universities and education-related
associations, and a letter to the House of Representatives said, "We
estimate that enrollment for the next academic year will drop by 15
percent, including a projected decline of 25 percent for
international students, resulting in a revenue loss for institutions
of $23 billion.
Many of our institutions had to pivot to online-only established
platforms, refund money to students for housing and things like that,
and then also a lot of the auxiliary services.
So things like hotels on campus that would have been booked for
graduation, the sports teams playing bringing that type of money onto
campus, that all went away.
With the international enrollment also falling, that's going to have
a real financial impact on our institutions.
We just don't know how big that impact is going to be yet.
Prior to the coronavirus pandemic, universities and colleges were
already in a fragile financial state, especially those that rely
heavily on tuition and state funding.
To break even some public universities have resorted to heavily
recruiting international students.
Public universities generally charge more for out-of-state students
than in-state students and international students, of course, are
never in-state students.
So it's not uncommon for international students to be paying triple
the tuition that local students pay.
And universities use this to subsidize local students.
There's a very big increase in this after the Great Recession.
Part of that is states cutthe public higher education budget
significantly. It hasn't really recovered.
And so the international students have become an increasingly
important source of revenue for many schools.
U.S. postgraduate and doctoral level programs could also see an
impact. In 2018, more than 18 percent of the students in these
programs were international students.
Their largest presence was in computer science and engineering
programs, where they accounted for more than 57 percent of
enrollments. It's important to note that experts attribute the high
enrollment numbers to a domestic recruitment problem.
According to the World Bank, university patent grants increased 6.8
percent for every 10 percent of international students.
That means innovation suffers when fewer international students
enroll in science, math, engineering and technology programs in the
U.S. It's students like Atinc Cagan Sengul who support these
departments. He doesn't fit the image of the stereotypical wealthy
international student.
While 57 percent of international students pay for their education
through personal or family means, 16.8 percent have their education
paid for by their U.S.
university. The most that my family was be able to contribute to my
undergraduate education was $5,000 a year.
So it's more of any amount that I ask of them on
top of that would be too much and it would be a burden on their
finances. But when I applied to University of Chicago, that's what I
told them in my application. I can only pay $5,000 a year to you.
And luckily they accepted my application and they offered me
financial aid enough to cover everything, but that last $5,000.
Fewer international students aren't the only thing that could hurt
these programs. The loss of other temporary visa holders could as
well. Many of them are faculty members that are hired under H-1B
visas that are included under the June 22nd presidential
proclamation. So this is going to have long-term economic impacts,
not just for higher education, but really the entire United States.
There's also a huge economic impact from the people that decide to
stay here that our U.S.
institutions have educated and have trained and they decide to stay
here either to start a business or to work for one of our U.S.
tech companies or to remain as a faculty member and actually train
the next generation.
They are one of the most successful exports.
The United States has, for example, the value of exports of higher
education are higher than the export of soybeans from the United
States. Students bring a lot of tuition to the United States.
They also, of course, buy pizza and they rent apartments and do all
the things that American students do, but they're taking their money
from other countries and giving it to us.
So United States, of course, runs a bad balance of trade because we
import more than we export.
A higher education is one of the major exceptions where we export
much more than we import.
International students contributed about $41 billion dollars to the
U.S. economy during the 2018-19 school year.
That's according to an analysis from NAFSA, an organization that
promotes international education.
It said that more than 458,000 U.S.
jobs were created thanks to international students, supported by
their spending on things like retail, dining and transportation to
name a few. China sends the most international students to the United
States. In 2018, more than a third of international students in the
U.S. came from China.
Most universities are unprepared for tuition loss from the pandemic.
But the University of Illinois is prepared.
Two years ago, the university's business school and the engineering
school bought an insurance policy that would pay out if there is a
substantial drop in revenues from Chinese students.
The insurance pays out if revenues fall more than 18 and a half
percent. So if it falls 20 percent, they get a 12 million dollar
payout and the premium is $424,000 a year.
And the policy was syndicated through underwriters at the Lloyd's of
London. The school declined to comment to CNBC, citing a
confidentiality clause.
Many big name universities won't see an impact, but for the smaller
universities, financial damage could result in fewer campuses,
programs and workers.
Beyond the quality of U.S.
higher education, another draw for international students are the job
prospects offered through the optional practical training program.
After students graduate, they can apply for temporary employment as
an extension of their student visas through the OPT program.
In 2018, 223,085 students or recent grads were in the OPT program, an
increase of more than nine percent from 2017.
That's a really significant motivator for a lot of international
students who come to the U.S.
to study because under the normal terms of their visa, they wouldn't
be able to work in the United States.
It's only through programs like the OPT that they're able to gain
that experience and potentially develop ties to future employers who
might then decide to sponsor them for an H-1B visa or even permanent
employment that could lead to a green card.
The reason why I was so stressed about this ban was because I've
always dreamed of working in the States after graduating.
And so this ban would have not allowed me to apply for the OPT work
visa that I have to be in the country to apply for.
Not being allowed into the country to hand in that application would
have meant that I wouldn't have had a chance at kind of achieving my
dream of working in New York.
Unwelcoming immigration policies are one of the main reasons why new
foreign student enrollment in U.S.
universities has declined since 2016.
According to a NAFSA survey.
other reasons why students aren't coming to the U.S.
include visa delays or denials, the social and political environment
and increasing enrollment at universities and other countries.
NAFSA estimates it has cost the U.S.
economy $11.8 billion and more than 65,000 jobs.
This comes at a time when students are studying abroad more than
ever. Since 2001, the number of international students around the
world has doubled from 2.1 million to 5.3 million.
What we've seen with the restrictive visa policies of this
administration is a lot of concern coming from our international
students. We've seen a slowdown on new international enrollments and
we've seen a lot of efforts by our competitors, such as in the U.K.,
Australia and Canada, to try and jump in and recruit some of those
students by creating less restrictive visa policies as a way to be
more attractive. The U.S.
OPT program caps students at 36 months if students complete a
science, technology, engineering and math degree and 12 months for
other majors, Canada's program allows students to work a max of three
years. Australia's program goes for up to 18 months.
In 2018, both countries saw an international student enrollment
increase of at least 15 percent.
In 2019, the U.K.
voted to revert back to their previous work policy of 24 months after
concern over a competitive disadvantage when compared to other
countries with longer post-study work programs.
The country's current policy was put in place in 2012 and only
allowed students to work four months.
The change will take place in summer 2021.
The Trump administration has considered ending the OPT program.
Opponents of the program argue it takes away jobs from Americans.
Companies are not required to pay a competitive wage to OPT workers,
which could make them cheaper than American workers.
Supporters say the program is a pipeline for the U.S.
STEM workforce. According to a 2016 study from the National
Foundation for American Policy, nearly one quarter of the U.S.'s one
billion dollar start-up companies had founders who first came to the
U.S. as an international student.
The Business Roundtable, a nonprofit group representing big
corporations, laid out how the end of the program could affect the
U.S. economy in a 2018 study.
The real U.S. GDP could decline a quarter of a percentage point by
2028 and lose nearly half a million jobs in the U.S., half of which
would be for native workers.
Colleges and universities have tried to make our international
students feel welcome.
So when you looked at the Harvard MIT case that was brought against
the Department of Homeland Security about the July 6 guidance, one of
the things that the president of MIT stated in the news release was
that this was a message to our international students that we welcome
you. We want to remain welcoming.
And so I think that the visa policies need to be rethought in a way
to carry that message to our international students that we're trying
to recruit. There are a lot of immigration scholars and immigration
attorneys who see the current policies to restrict international
students as part of the broader effort to use the pandemic as a
vehicle for pushing through highly restrictionist policies.
And the administration has been defined by wanting to pursue a number
of different limitations to legal migration, anything from green
cards to immigrant workers on H1-B visas, possibly to the OPT program
and also to international students.
And Covid-19 has given them a shortcut through many of those
policies. The implications for the U.S.
go beyond the economic impact.
In other countries who gets to come to the United States to college?
Well, it tends to be people from relatively well-off families.
It tends to be people from the elites in those places.
It tends to be the future leaders.
So if you look around the world, there are lots of prime ministers
and finance ministers and treasury secretaries who have American
degrees. They came to the United States.
They took what they learned home, but they're likely to also try to
look favorably on the United States.
And it's just very unfortunate if we should forget that.