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How do the foreign students contribute to the American economy?

10 July, 2020

Earlier this week the Trump administration asked the foreign students to leave the country if their universities move to an online-only method of teaching. This has sent a sense of ire among students and academic communities in the country. Harvard and MIT have already requested the federal court to suspend the declaration. Trump administration’s declaration comes at a time when the universities are struggling to reopen the campuses after the pandemic. Some universities have decided to adopt a hybrid teaching method – a blend of both online and offline classes. But do the foreign universities contribute anything to the US or are they just parasites of the system?

A report of 2018-19, issued by the US state department and Institute of International Education (IIE), suggests that about 1.1 million students attended the US higher education institutions in 2018-19, who make around 5.5% of the total enrolled students. Therefore, the order will only affect a small fraction of students. But the presence of local students is indispensable for many schools and local communities, as they bring business along. The local real estate, business, etc flourish and the schools generally receive higher tuition fees. According to the same report by the IIE, foreign students contributed $44.7 billion to the US economy during 2018, which claimed after citing the US Department of Commerce.

Not only that, but they also supported around 4, 50,000 jobs in the United States in 2019-19 academic year, as estimated by the NAFSA, an international education advocacy group. “The majority of these jobs are in higher education itself, but accommodation, retail, transportation, and health insurance also benefit, it concludes”, claims a report. Also, foreign students not only pay higher fees to the schools, but they also pay a huge amount for exams for various entrants.

The total amount of financial support for these 1.1 million students comes mostly from overseas, of which 57% from their own family sources and the rest from foreign sources like funding agencies, sponsors, etc. The report also mentions China as the largest contribution to the foreign student body in the USA, followed by India. According to a report by  The Wire, “Chinese real estate purchases hit $30 billion in the twelve months ended March 2018, the National Association of Realtors reports, but fell to $13.4 billion in the next 12 months, in part because of US-China frictions. About 10% of Chinese purchases were made for student use, the realtor group said, the highest portion for any international buyers.”

In fact, according to their own estimate, Purdue University gets $10 million extra in annual revenue from the foreign students. “Big schools that are household names are likely to have a long waiting list of possible enrollees, available to take the place of any international student,” said Terry Hartle, the senior vice president of government and public affairs for the American Council on Education, which represents schools in Washington, D.C. Moreover, it is also not unknown that most of the universities run their aid, bursaries, and other programs from the money they make from international students. This clearly shows that although they constitute a minuscule percentage of the total enrolled students, foreign students do contribute a lofty amount to the economy and schools.

This article is compiled by Sagnik Banerjee.


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