The Trump administration’s statements and actions aimed at curtailing the number of international students in the US have sent a chill of uncertainty through higher education institutions.
These American schools have become more reliant on the higher tuition paid by international students as state and federal support has waned. Now, their financial viability could be shaken.
That could have a negative impact on US-born students seeking a college education, and economists and researchers warn that the ripple effects could extend well beyond the lawns of college campuses: A drop-off in international students could reverberate through the US labor market and broader economy in years to come.
“The skill premium, as we call it, is very large, which is why highly educated workers earn so much more,” said Michael Lovenheim, a labor economist and professor at Cornell University’s School of Industrial and Labor Relations.
International students, he added, “generate not only returns to themselves through higher wages, but they work in sectors that generate economic growth, they start businesses, they work in high-growth areas that generate more productivity and increase [Gross Domestic Product].”
And that economic impact, he said, is “positive and large.”
During the 2023-24 academic year, 1.1 million international students were credited with supporting 378,175 jobs, half of which were at colleges and universities and the rest being in other sectors such as housing, food service, retail, transportation and insurance, according to NAFSA: Association of International Educators.
All told, that amounted to a record-high economic contribution of $43.8 billion, according to the member-based organization.
Reducing enrollment or hurting international students’ desire to study in America, he added, will “lessen our economic competitiveness in the medium run and maybe the long run as well, depending on how things play out.”
The Trump administration’s efforts to limit international students have already affected the Global Migration Center, an interdisciplinary research center at the University of California, Davis, said center director Giovanni Peri, an economist and UC-Davis professor who has researched the economic impacts of international migration.
“The new cohort of students that are coming (from other countries), we’ve already lost a few of them because of the uncertainty of the funding and the visa that we’re providing,” Peri told CNN in an interview. “A couple of people who were from Europe decided to go to England.”
And the international students currently conducting research at the center are experiencing hardships as well, he added.
“They are really struggling with their funding; they are not traveling internationally. A couple of my students could not go to international conferences in the last couple of months because they were worried they would not have been able to come back” because of worries they’d get stopped at the border, Peri said.
The research itself, he added, has become harder with reduced funding.
“It took a long time for the US to establish itself as, by far, the strongest university environment in the world,” he said. “But things change, and things can change in a more permanent way.”
If international students elect to instead study in Canada, Europe, Australia or other regions, that loss will ultimately damage the US economy, he said.
“The rate at which foreign students create firms in the United States after graduation is about four times as large as the rate at which Americans create,” Peri said, citing his research on the topic. “So, there will be fewer companies created. There will be fewer scientists and engineers to fill other companies in the US; there will be less growth of companies, jobs, and lower income in many local economies.”
The potential business generation effect already is hampered by immigration restrictions or challenges, Peri noted.
In an earlier study, he and his colleagues found that because of immigration and visa restrictions, only 20% of international US Master’s graduates remained in the US and worked for at least two years. There have been legislative proposals to give a green card to students who earn a degree in the US (a policy that Trump publicly supported), Peri said, adding that “not only this has not happened, but we have made several steps in the opposite direction.”
“This is now a completely different world, but this idea of students who study in the US should be able, if the company makes an offer, to have a visa had such a consensus that was so broad and so bipartisan,” he said. “Because everybody saw that the US helped these students and this human capital to be created and that some of the benefits could stay in the US if there is an option.”
If the Trump administration’s policies and approach toward international students don’t change significantly, these negative consequences could be felt in the broader US economy in two to three years, he added.
Not excusing the “brutality” of the Trump administration’s approach, recent events could drive a meaningful debate around the internationalization of the American student body, David Bell, a history professor at Princeton, wrote Tuesday in a New York Times opinion piece.
Bell noted that 1.1 million international students enrolled in the 2023-2024 school year — four times the enrollment 45 years ago.
“Like many large social changes, this one happened without much conscious planning or debate,” he wrote. “Foreign students kept applying in ever greater numbers, and universities happily admitted them, since non-Americans receive merit- and need-based financial assistance at much lower rates than Americans do. It has taken Donald Trump’s crude and vengeful swipe at Harvard to draw much attention to the subject.”
In a follow-up interview with CNN, Bell noted the potential trade-offs with expanding international enrollment: On one hand, universities can serve as engines for future economic growth and further global relationships; on the other hand, universities potentially could fall short when serving homegrown applicants.
“The past couple of decades, the trend has been very, very strongly toward a steady increase in the number of international students, and I think it may be worth asking whether we should be continuing with that increase, or should we keep (enrollment) at the current level or even decrease the level of international students slightly,” Bell said. “Not doing anything precipitous, not doing anything brutal as the administration seems to be attempting to do, but simply keeping an eye on the situation and recognizing the trade-offs.”
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