If college presidents were hoping Donald Trump would tire of lambasting America’s universities, recent tirades against international students have left them freshly agog. In May the administration said it would no longer let Harvard enroll foreigners, apparently as a punishment for upsetting it (a judge has put that order on hold). Of wider impact is the government’s decision to pause scheduling new visa interviews for foreign students, no matter where they aim to study. Beyond the damage this is
If college presidents were hoping Donald Trump would tire of lambasting America’s universities, recent tirades against international students have left them freshly agog. In May the administration said it would no longer let Harvard enroll foreigners, apparently as a punishment for upsetting it (a judge has put that order on hold). Of wider impact is the government’s decision to pause scheduling new visa interviews for foreign students, no matter where they aim to study. Beyond the damage this is doing to America’s reputation, and its prowess in research, the tumult has bean-counters across the country’s higher-education system wringing their hands.
Many American colleges and universities were facing financial problems long before Mr Trump’s return to the White House. Americans have soured on higher education, after years in which participation grew fast. The share of high-school graduates going straight to college fell from around 70% in 2016 to 62% in 2022. In December Moody’s, a rating agency, said a third of private universities and a fifth of public ones were operating in the red.
Looming demographic change will bring more trouble. The total number of high-school graduates in America may fall by around 6% by 2030 and 13% by 2041, according to one estimate. The impact will vary widely by region: in some north-eastern and mid-western states (which for historical reasons have a surfeit of universities) the decline could be as high as a third.
Foreign students are not an antidote, but they are helping offset some pain. The million or so foreigners studying in America is roughly double the number in 2000. They pay far higher fees than locals for undergraduate courses—in some public universities as much as three times the rate, says William Brustein, who has led international strategy at several of them. Over half the foreigners are postgraduates; these courses tend to bring outsize profits.
Though America has more foreign students than any other country, it would seem to have room for more: they make up only about 6% of those in higher education, compared with over 25% in each of its main competitors—Britain, Australia and Canada. For now, alas, growth is the last thing anyone expects. The risk is both that the number of foreigners who turn up this autumn will fall sharply, and of a longer-lasting depression caused by future applicants turning to more welcoming countries.
The big question is who might suffer the most if there is a bust. Ultra-elite institutions may look exposed: around 28% of Harvard’s students and a whopping 40% at Columbia come from abroad. But these institutions have many ways to balance the books: last year tuition fees (both domestic and foreign) and payments for room and board made up only about 20% of Harvard’s total income, compared with over 80% at the least prestigious private universities. Demand for spots at the ritziest universities is rarely affected by a slowdown and their home-grown students could pay more.
The trouble might be greater for second- and third-tier outfits, where foreign students are not quite so numerous but are often more important to the bottom line. For many years public universities ramped up foreign enrollment to make up for declining funding from the state in which they are located. The most prestigious of these institutions were able to boost revenues by attracting high-paying Americans from out of state, whereas the rest had no choice but to pay agents and marketers to bring in overseas students.
A pronounced slowdown in overseas arrivals could damage institutions, even those that have never enrolled a single foreigner. If highly regarded universities adapt by enrolling more local students, that will make it harder for institutions with lesser reputations to attract them, and thus to pay their bills. In Britain, changes to visa rules have recently brought sharp falls in foreign arrivals. Last year about 40% of universities predicted operating deficits.
This would not be a problem if it were to put shoddy and unpopular institutions out of business. But it is a worry if it leads to regional “cold spots” in which affordable degrees become difficult to find. Or if it benefits complacent incumbents that trade on their reputation rather than their teaching. Mr Trump’s war on the effete Ivy League could have much wider effects than he bargained for.
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