A Passage to America: University Funding and International Students


Attention US higher education colleagues!  Here’s an interesting research paper about the economic impact of international students at institutions that have taken hits in public funding for the past couple of decades. 

Here are the money sentences:  For the period between 1996 and 2012, we estimate that a 10% reduction in state appropriations is associated with an increase in foreign enrollment of 62% at public research universities and about 6.7% at the resource-intensive AAU public universities. Our results tell a compelling story about the link  between changes in state funding and foreign enrollment in recent years.

International students contributed more than $35 billion to the U.S. economy in 2015, according to the U.S. Department of Commerce.

You can download a PDF version of this paper.   

MAA

Abstract

Substantial subsidies to public higher education in the United States
have historically allowed in-state students at public colleges and universities to pay markedly lower tuition and fee levels than counterparts who are not state residents. Yet, state appropriations for higher education have declined markedly in recent years. For university leaders facing declines in funding, potential margins for adjustment include raising revenues through increases in tuition levels, reducing resources per student (and potentially quality) by cutting expenditures, or changing the mix of students admitted to include more students paying non-resident tuition. At the same time, with strong economic growth in countries like China and India in recent decades, the pool of students from abroad academically prepared for U.S. colleges and able to pay the tuition charges has increased markedly in the last decade.  In this paper, we examine whether “funding shocks” in state appropriations have led public universities to attract more foreign
students who are able to pay the full fare tuition. For the period between 1996 and 2012, we estimate that a 10% reduction in state appropriations is associated with an increase in foreign enrollment of 62% at public research universities and about 6.7% at the resource-
intensive AAU public universities.Our results tell a compelling story about the link  between changes in-state funding and foreign enrollment in recent years
.
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