Foreign students contribute billions to US economy

As the United States prepares for the upcoming fall semester, an incoming wave of international students is expected to bring a considerable economic boost to the nation and its higher education sector. 

In a Forbes report, nearly one million students from across the globe are flocking to American universities, marking a significant turnaround and a promising economic revival as the pandemic’s grip loosens.

Higher education stands as the ninth largest export for the United States, albeit in the form of importing students from across the globe, it noted.

The three leading source countries for international students are China, India, and South Korea, contributing to a total of over 530,000 students during the 2021-22 academic year. Students hail from a diverse array of 224 nations, territories, and islands, exemplifying the global reach of American universities.

Experts estimated that their presence contributes $33.8 billion to the economy, fostering the creation of more than 335,000 jobs. 

This financial infusion is not limited to academic pursuits alone as it spans various sectors, encompassing everything from accommodation rentals to food delivery services.

These economic gains resonate deeply at a local level, resonating in the top 50 American cities, each of which hosts at least one educational institution that accommodates international students. 

An example is Boston, Massachusetts, a city enriched by a multitude of prestigious colleges and universities. 

Boasting more than 55 degree-granting institutions, including Harvard and Boston University, Boston reaps substantial gains from its enrollment of over 54,700 international students, translating into a $2.45 billion economic impact.

Among the top 50 schools, both doctoral and master’s, 32 are public institutions, collectively enrolling nearly 221,000 international students. 

The influx of students directly contributes to the financial well-being of these universities, with three top public institutions alone, namely the Arizona State University, University of Illinois – Urbana, and University of California – San Diego, yielding a combined $1.325 billion and supporting over 15,000 jobs during the 2021-2022 academic year.

Meanwhile, cities like Mankato, Minnesota are also home to campuses hosting thousands of international students, injecting millions of dollars into local economies and supporting hundreds of jobs. 

The trend is widespread across the country, with community colleges also playing a significant role. While international enrollment has seen some decline in recent years, these institutions still attracted nearly 50,000 foreign students in the 2021-2022 academic year, contributing a substantial $1.3 billion and supporting over 6,000 jobs.

Investors in municipal bonds find a reason to celebrate amidst this surge in international students. The higher education sector is backed by approximately $216 billion in long-term debt, offering a financially stable investment avenue. 

However, the sector is facing challenges as demographic shifts lead to a decrease in domestic college-age students, potentially impacting tuition revenues. 

This has led to the closure, merger, or planned shutdown of 91 private colleges since 2016. Furthermore, many “college town” communities heavily rely on educational institutions as top employers, raising concerns about potential job losses amid financial strain.

In response to these challenges, some institutions are innovating by opening overseas campuses to attract international students who might face economic or visa constraints in traveling to the US. 

Notable universities like NYU, Duke, and UC Berkeley have established partnerships with Chinese universities to create campuses in China.

Other institutions, such as the Hult International Business School, have also built their business models around offering education across multiple countries.