Burying the Lede on the Foreign Student Kerfuffle

'U.S. universities rely on international students' tuition'

By Andrew R. Arthur on July 17, 2020

My last post discussed ICE's withdrawal of a proposal limiting the ability of foreign students to enter and remain in the United States on nonimmigrant visas if they are only, or primarily, taking online classes, in the face of a lawsuit filed by Harvard and MIT. A Law360 article (partly behind a paywall), following up on ICE's (in)action, captioned "Despite ICE Retreat, Threat To Foreign Students Remains", accurately depicts the situation for foreign national "students stuck overseas", as the author puts it. My one quibble with that article is that it "buries the lede" as editors put it — that is, it puts a really critical point deep in the article, in this case, the effect of money on schools' foreign student policies.

Before I continue, I must acknowledge the great work my colleague Marguerite Telford has done in reporting on the ICE proposal, as well as my deep respect for Suzanne Monyak, author of the Law360 article. Both are thoughtful and intelligent, and the latter is almost always ahead of the news on immigration issues because she bothers to understand the issues.

The aforementioned Law360 article discussed the fact that consulate closures and travel bans in response to the Wuhan coronavirus will make it difficult for anyone — including foreign students — to obtain visas to enter the United States. It also contains commentary on the current administration's use of executive immigration orders on immigration.

Then, at paragraphs 31 through 33, is the following:

The plight of students outside the U.S. may not capture the public's attention like the prospect of deporting current students did, but the impact on universities if those students can't come to campus, and then transfer to schools in other countries, could be brutal.

U.S. universities rely on international students' tuition to fund scholarships for American citizens and other programs.

"The schools are going to care about those who aren't here because it affects their bottom line. So they're going to care about it and they're going to be back in court," said Charles H. Kuck, an Atlanta-based immigration lawyer and former national president of the American Immigration Lawyers Association. [Emphasis added.]

As an aside, it doesn't matter whether "international students' tuition" goes to fund scholarships or not (there is no support for that in the article, but it is likely true to some degree). "Money is fungible," the saying goes. That means that a dollar that comes from a foreign student's tuition to fund scholarships for American citizens is another dollar that a school can spend somewhere else.

In my previous post, I stated: "I could posit that serious financial considerations (including some major lost tuition) at least in part undergirded" the decision by Harvard and MIT "to sue, but for the purpose of analysis, I will take their assertions [expressing concerns about the plight of those students and the strength of America itself] at face value." The Law360 excerpt shows that colleges and universities are also interested in getting foreign students to the United States, at least in part, for that oldest of motivators: financial gain.

I applaud the author for using the term "brutal" to describe the financial impact to schools should they be unable to admit additional foreign students for the fall semester. Again, my "quibble" (and it is no more than that) is that these paragraphs should have appeared earlier in that reporting.

How big a financial interest might Harvard and MIT have in getting tuition from those students? The complaint they filed suggests it could be massive. Of 23,000 students at Harvard, "nearly 5,000 students" — almost 22 percent — "study in the United States on F-1 visas."

At MIT, the number of F-1 students is lower — "almost 4,000" — but the total number of students enrolled is also significant lower: 11,500. That means that some 34 percent (actually probably slightly higher, but again the former number is inexact) of all of the students at MIT are F-1 aliens. Losing a third of its student body would likely have a major impact on a school's financial health, no matter how large its endowment is.

To be fair, Harvard states, with respect to international students:

Our financial aid policies are the same for all applicants, regardless of nationality or citizenship. All aid is based on financial need, and admissions decisions are made without regard to whether an applicant has applied for financial assistance. Harvard meets each student's demonstrated need.

There is not a lot of visibility that I could find, however, into how much financial aid Harvard actually gives to international students.

But Princeton Review states that Harvard has a 5 percent acceptance rate, and those accepted have average SATs between 1460 and 1570 and an average high school GPA of 4.18 (you read that correctly), so it is likely that its foreign students are (1) exceptional self-starters; (2) from well-heeled families who could afford a top-notch primary and secondary education that would lead them to university abroad; or (3) both. That would suggest that at least some of Harvard's foreign students would not qualify for much financial aid to begin with.

Curiously, neither Harvard nor MIT mentioned in their complaint any financial detriment to them if ICE's proposal were allowed to take effect (they alluded to the financial effects on the students). But not all financial benefits to higher educational institutions from foreign students are monetary.

As the schools admit: "Harvard and MIT ... depend on some F-1 graduate students for teaching support in their undergraduate programs." Interestingly, they don't quantify how many F-1 students provide "teaching support", however.

I am no expert on the economics of academia, but I can all-but guarantee that those students receive far less in compensation for their labors than full-time faculty. Note that according to the complaint: "The median age of the faculty members of Harvard's Faculty of Arts and Sciences is over 60 years old". Some of them may be doing it for the prestige, but most 60-plus year olds I know are gathering assets for retirement, and if you are teaching at Harvard, you could probably get paid big bucks elsewhere.

The bigger issue is, of course, other schools that lack the financial resources of Harvard and MIT and that also would have lost foreign students, and the tuition they pay, if ICE's plan were to have taken effect.

As NAFSA: Association of International Educators explains:

Minimal scholarship aid is available to international students, and most of it is reserved for graduate study. Generally, U.S. institutions offer little, if any, discount on tuition, although both private and public institutions may waive application fees in some situations.

Some 180 member schools of the Presidents' Alliance on Higher Education and Immigration filed an amicus brief in the Harvard/MIT suit against ICE, which referenced the potential economic impact of ICE's policy. Bluntly, they stated: "International students pay tuition." Although many of the costs to those schools cited in that brief were unclear (some related to "the complex, comprehensive processes" schools had already "employed to ensure a safe and effective 2020 academic year"), in one instance the brief was not so obtuse: Northern Virginia Community College was described as "facing [a] potential loss of $9.9 million in tuition from F-1 students."

Consistent with that, in September 2016, Business Insider reported: "International students are now 'subsidizing' public American universities to the tune of $9 billion a year." That article revealed that, in 2015, 28 percent of annual tuition revenue at U.S. public universities came from foreign students, despite the fact that they represented just 12 percent of the students at those schools. ICE's plan likely would have significantly impacted their bottom line.

I truly have no doubt that schools contesting ICE's proposed policy change were motivated by their concerns for their students — alma mater is from the Latin for "nourishing mother", after all. But the fact is, there was money on the line, too.