Panel Transcript: Are Foreign Students Good for America?

Moderator:

Mark Krikorian, Executive Director, Center for Immigration Studies

Panelists: 

George Borjas, Pforzheimer Professor of Public Policy at the John F. Kennedy School of Government, Harvard University; Author of Heaven's Door: Immigration Policy and the American Economy, published by Princeton University Press

Rep. Tom Tancredo (R-CO), Member of the House Committee on Education and the Workforce, Former Chairman of the House Immigration Reform Caucus

Terry Hartle, Senior Vice President and Director of Government and Public Affairs,American Council on Education


MR. KRIKORIAN: My name’s Mark Krikorian. I’m executive director of the Center for Immigration Studies. We’re a think tank here in Washington that examines and critiques the impact of immigration on the United States. All our work is — what we’re talking about today as well as everything else is on our website at cis.org. 

For a long time no one really thought about the issue of foreign students. What little consideration that did take place was really limited to clichés and unexamined claims:  foreign students were a great economic deal for America; that the programs skimmed the intellectual cream of the world, which either stayed here and benefited us or went home and propagated American values. These may or may not be true claims, but the point is they were never really examined; they were just assumed to be accurate and that was it. Nobody really gave much thought to it.

In the 1996 immigration law Congress did take some notice of the program and some of its potential problems. After all, the driver of the van full of explosives in the first World Trade Center attack, Eyad Ismoil, had entered the United States as foreign student. He went to Wichita State University and dropped out after several semesters and became an illegal alien. Also the chemical explosives expert for the first World Trade Center attack, Nidal Ayyad, had gone to Rutgers and nobody seems to be quite sure whether he entered as a foreign student or not, but he does seem to have done so, though we can’t say for sure — it appears to have been a long time ago. So Congress responded to these concerns in the ’96 law by requiring the development of the foreign student tracking system.

Unfortunately, it never really got past the pilot stage — couple dozen universities in the Southeast participated in it — due partly to the all-too-familiar problems within the INS and also to strong opposition on the part of the education industry. And I would say this on my behalf, but I’m reasonably confident saying this, that had 9/11 not happened the foreign student tracking system would not exist — would have been repealed or completely gutted by now. And it’s unfortunate that after ’96 the system didn’t work because subsequent terrorists affiliated with al Qaeda had come in, at one point or another, as foreign students. 

By the way, we released a few weeks ago a report on how the past decade’s worth of al Qaeda terrorists got into the United States — their immigration status when the entered and when they were arrested and it’s really kind of a hair-raising chronicle. It includes in the embassy bombings — the African bombings that one of the participants, Wadih El-Hage, was a naturalized citizen, was bin Laden’s personal secretary, who had entered as a foreign student at the University of Southwestern Louisiana. And also a chief recruiter for al Qaeda, Khalid Abu-al-Dahad, entered as a medical student, a foreign student from overseas and got married. And in the 9/11 attacks, as we know now, Hani Hanjour had entered as a foreign student and, in fact, had entered several times prior to his most recent entry into the United States as a foreign student. And as is notorious by now, Mohamed Atta and Marwan al-Shehhi had come in as tourists but applied to adjust their status to vocational students to go to flight school and their approvals — their receipts, if you will, the notifications that they had been approved arrived six months to the day after the attacks.

In fact, student visas seem to be pretty attractive for terrorists because, in a sense, it’s a way for a young, unmarried person to get into the United States — the kind of guy who might have difficulty getting a tourist visa, but would actually be able to get a student visa and would be in an environment where he’d have a good chance of finding an American wife, as has been the case for many of the terrorists, because there is a large pool of unmarried, young people, which then enables the terrorist to get a green card and ultimately citizenship, which is — as bin Laden himself has said — one of the objectives of al Qaeda is to recruit more terrorists who are American citizens, which give the network easier access to the United States — more freedom of movement. 

Well, since 9/11 has happened Congress and other policymakers and opinions leaders have started to pay attention to the foreign student program in a big way, and the border security legislation the president signed last month specifically addresses what the foreign student tracking system should look like.  So it seems an opportune time to examine what the foreign student system does. Not just the mechanics of tracking the foreign students, but what’s the point of this? Is it benefiting us? What are the costs? What are the benefits? Who wins? Who loses? Professor Borjas, George Borjas, who has written this paper for us is eminently qualified to undertake this kind of evaluation.  He’s the Pforzheimer professor of public policy at the Kennedy School at Harvard; probably America’s foremost scholar of immigration policy. His most recent book is “Heaven’s Door,” still in print — I’m sure it’s on Amazon.

PROF. BORJAS: Amazon.com.

MR. KRIKORIAN: Do you check daily the number —

PROF. BORJAS: Definitely. Hourly.

(Laughter.)

MR. KRIKORIAN: And so Professor Borjas is going to give us kind of an overview of his paper, which is likewise online in it's entirety at our website, and then we'll have two respondents — again, eminently qualified respondents: first, Congressman Tom Tancredo who is both a member of the House Comittee on Education and the Workforce, and when he headed a think tank in Denver before coming to Congress was intimately involved in education issues — the think tank was very heavily involved in education issues — and Congressman Tancredo was also chairman of the House Immigration Reform Caucus.

And our second respondent will be Terry Hartle, who is senior vice president and director of the division of government and public affairs for the American Council on Education, which is kind of the umbrella group representing higher education — all the community colleges and colleges and universities in the United States. So again, eminently qualified to give his organization's take on the foreign student issue.

So we'll have Professor Borjas start, then Congressman Tancredo, Mr. Hartle, and then we'll take Q&A for as long as people can stand. George?
 

PRESENTATION OF GEORGE BORJAS

PROF. BORJAS: Thank you very much.  Let me just start by stating the obvious, I guess.  As all of you know, the size of the foreign student program has increased a lot in recent years.  Just to give you the idea of the numbers, in 1980, 155,000 foreign students were granted visas to study in the U.S.  By 2000, 315,000 visas were being granted.  As a result of that increase, the American university has change dramatically, particularly at the graduate level and particularly in some fields.  Again to give you an example of what I’m talking about, foreign students are receiving 35 percent of all Ph.D.s in the physical sciences, 49 percent in engineering and 23 percent in social science, so we had a dramatic shift.

Now the terrorist attacks, as Mark was talking of before — those terrorist attacks of 9/11 helped sharpen the widespread perception that the foreign student program has been spinning out of control for years.  Three of the terrorists involved in the attacks entered the country with student visas and in fact the so-called 20th terrorist, Zacarias Moussaoui, who is now in jail, also was in the U.S. on a student visa. 

After 9/11 many Americans wanted to know exactly how many foreign students were in the country, how many of those students originated in so-called terrorist-sponsored countries, and the INS could not answer those questions. 

It quickly became obvious that the INS database was completely inadequate — in fact non-existent would be a better word to put it.  But it also became very obvious that there were very few checks and balances to prevent the number of foreign students from increasing exponentially or to prevent foreigners from misusing the foreign student program to enter the country for reasons other than to go to school. Perhaps most important of all, I think, it became very obvious that there had been almost no thinking whatsoever on whether such a large-scale foreign student program was even desirable in the first place. 

As currently structured the foreign student program certainly increased the number of high school workers available to American employers and clearly exposes many future leaders of other countries to American values and democratic institutions.  But the program is also so large, so corrupt and so ineptly run that it’s actually worthwhile to stop, breath for a minute and just ask a very simple question: does the U.S. benefit at all from such a large-scale foreign student program? 

I am here today to address that question.  My evaluation of the program suggests that the benefits of the foreign student program have been greatly exaggerated, particularly when those benefits come from the higher education industry — an industry that benefits financially from the press of foreign students.  I would instead argue that the program is flawed in a number of ways.

First of all, the INS has delegated the responsibility of selecting immigrants to an unbelievably large number of institutions, and these institutions have goals and objectives that may not be in the national interest.  Secondly, the data collected on the entry and whereabouts of foreign students is so flawed that it is literally impossible to know how many foreign students are in the country today, where those students originate and where they are now residing.  Third, the education of foreign students, and particularly foreign students enrolled in public universities, is heavily subsidized by the American taxpayer.  Fourth, because of the subsidy being so large the foreign student program may actually generate a net economic loss for the U.S.  And lastly, there are serious security issues involved with the foreign student program, and particularly with the enrollment of some types of students in some types of educational programs. These securities issues imply that at some point in the future we may have to address what is clearly a very politically incorrect question: whether to prohibit the enrollment of particular types of students in particular types of programs. 

But let me begin my discussion of the whole area by actually talking a little bit of the mechanics of how a person goes about getting a student visa.  A foreigner who wishes to study in this country, starts off the process by applying for admission to an institution — to an American institution.  To qualify for a student visa the foreigner must be accepted by a so-called INS-approved institution and he must enroll full-time at that place.  When the student’s admitted into the program, the institution that admitted him sends him what is called a Form I-20 — to the applicant.  The student takes this form to the local consulate where the consul official reviews the application and interviews the student before deciding whether to grant the visa or not.  If the student is accepted by several U.S. schools, as is very common, these students will likely receive many I-20s and inevitably there’s a market for I-20s — a black market for I-20s in many countries. 

Now once enrolled in the U.S. the educational institutions, as all of you know, do not have to report to the INS that the student has in fact enrolled at the school, they do not have to report if the student is making normal progress, and they do not have to report if the student ever completes the course of study.  In other words, there has been no tracking whatsoever of foreign students once they enter the country.  This lack of supervision makes it very easy for foreign students to stay in the U.S. illegally after they complete their students. And in fact, during the amnesty bill in 1980s, around 10 percent of the three million people amnestied at that time were persons with temporary visas — many of them foreign students.

Now the Bush administration recently proposed a computerized system to better track foreign students.  Beginning next year each school is supposed to record any change in enrollment status, address or major into this computer system.  Although this system is far better than the current system or no system at all, there are still major problems that are not being addressed.  For example, what would have just happened — just consider the following possibility.  What would happen if Ohio State were to report that 10 of its foreign students dropped out in the semester?  We already have 10 million illegal immigrants in the country.  Do you really believe that the INS could find those extra ten?  It’s very doubtful. 

Now many foreigners want to study in the U.S. because, for better or worse, they believe that a student visa provides a ticket into the country.  Between 1971 and 1991 there were three million persons granted student visas, and in fact, 393,000 of them were able to adjust their status and get permanent residence, green cards.  So the stay rate is only around 13 percent, which I actually, when I first calculated the number I found to be somewhat small.  But although we might think that the chance — of buying a chance to get into the U.S. is small through the student visas – the foreign student program — the chance would be much, much smaller without that program.  Foreigners have very few options of migrating legally into the U.S. unless you already have relatives here.  One potential avenue, other than the foreign student program, would be the so-called diversity lottery, wherein the U.S. literally raffles 50,000 visas a year.  The last lottery before 9/11 attracted 10 million applications, making the chance of winning a green card 0.5 percent, far smaller than the 13 percent provided by the foreign student visa program.

Now the available data also tends to contradict the widespread notion that the foreign students remaining in the U.S. are the best and the brightest who find themselves swarmed with job offers from American firms once they complete their school. It turns out that over half of the foreign students who are able to get green cards do so because of marriage. They were able to get married to an American citizen, to a permanent resident. In short, most of the green cards granted to foreign students have nothing to do with exceptional skills or high job demand, but are granted simply because a foreign student got lucky in the marriage market.

It would seem that a major obstacle to actually getting a student visa is that whoever wants to come here must be admitted by a so-called INS-approved institution. But the INS, as in many other things, seems to exercise almost no judgment whatsoever in granting permission to admit foreign students. Incredible as it may seem, there are now 73,000 schools or institutions that have been certified to accept foreign students. It actually very instructive to get the list from the INS and go through the list yourself. 

In San Diego alone the INS grants its seal of approval to nearly 400 institutions.  The interlude, the University of California at San Diego, a very prestigious place obviously, to the College of English Language, which when you leave this room you can go to the website, and they advertise very clearly new courses start every Monday. (Laughter.) Advance Beauty College, the Asian-American Acupuncture University, the San Diego Golf Academy.  Last week the New York Times actually had a story on this.  They actually counted the number of places in New York City where the New York — (unintelligible) — admit foreign students. There are 1,800 such places in the New York area. 

Because there are so many INS-approved institutions, anybody who can afford it can basically by a visa into the country and increase their chance of migrating to the U.S. permanently. In a very crucial sense the United States has delegated its legitimate role of selecting immigrants to thousands of institutions who’s incentives do not coincide with the national interest. Let me tell you what I mean by that.

Consider the financial incentives faced by large research universities. These universities need many workers to staff scientific labs, they need teaching assistants who teach undergraduate calculus and so on and so forth, and they would obviously prefer to fill those positions at low wages. Foreign students provide an almost limitless supply of those willing workers. Consider similarly the motivation of the thousands of vocational schools or language schools. The owners of these schools benefit a great deal by having more tuition-paying students, and there is a huge incentive for these places to basically sell visas under the guise of a foreign student program. 

In fact, the foreign student program has already corrupted the admission educational process at some schools in the U.S. A widely publicized example involves a San Diego businessman who received nearly $300,000 to get students visas from Middle Eastern counties. This scheme included an admission officer who actually expected bribes to admit the foreign students as well as professors at three different colleges in the San Diego area who sold passing grades to the students. 

And if you think that’s bad enough, the incentives for corruption are much, much greater abroad. I actually have a handout that basically shows some of the websites abroad that you can basically make your own idea for what the situation is like abroad. But let me give you a couple of examples. The demand for student visas by Chinese nationals is so strong that a fee of $10,000 buys you phony letters of recommendation, false evidence of economic support and even a professional actor to stand for you during the interview at the U.S. Consulate.

(Laughter.)

Now the Internet in the handouts that I’m passing out has numerous websites of firms that basically help respective students for a few.  In India, for example — and that’s in the handout — there is a place called the Foreign Student Service Bureau. They basically guarantee you an I-20 — they guarantee an I-20 for $800 and they even list the schools where you’ll actually get enrolled. The list of the 92 schools used by the Foreign Student Service Bureau are topped by University of Wisconsin at Milwaukee, Southern Illinois University at Carbondale and the University of South Carolina.  Now you should know that the FSSB removed the fee information from its website soon after my paper was being circulated.  So if you go now there you will not see the page that I’m handing out. You will not see the $800 actually fee. They sort of basically removed that from the website. But nevertheless, I still have the list of schools to which you can get in.

Now in the handout you will also find the website of a South Korean attorney, an immigration attorney, who has an extensive website trying to help South Korean students get into the U.S. with student visas.  And I just want to paraphrase some of the stuff he’s telling South Koreans when they get into his website.  He basically says — and this is a quote — “There is probably hundreds of what’s called YooHakWon — in Seoul, all specializing in helping students find a school in the United States.” And he says, “As with everything in life, there are advantages and disadvantages in retaining their services. The advantage of hiring a YooHakWon is that they will probably help you get an I-20 form.  The disadvantage is that the school they choose for you may not be the right school for you,” he says in a fatherly tone. “All YooHakWon in Korea,” he says, “receive a commission from a school in the U.S. who wants to introduce a student to that school.  So they may actually — (unintelligible) — to a school from which they receive a commission and that might not be the right school for you,” he says.

In short, the INS has delegated the business of admitting foreign students to an unbelievably large number of institutions that benefit financially from their presence and to foreign consultants who misuse, distort and pervert the system, to put it mildly. 

Let me turn to a different question: do we as a country gain from the foreign student program?  Foreign students generate three types of measurable — that’s the key word here — measurable cost and benefits. First of all, as I told you earlier, 13 percent of foreign students remain in the U.S. after they graduate, and they clearly increase the number of skilled workers in the workforce and that’s truly beneficial. Secondly, foreign students, while enrolled in school, are an important part of the workforce at that institution, particularly at large research universities. As I said before, they teach them the graduate classes, they provide research assistance, they man the scientific labs.  That’s also beneficial. And finally, foreign students pay tuition, and those revenues could well be a very important part of income for many institutions and that could also be beneficial.

Now a review conducted by the National Academy of Sciences in 1997 concluded that all of the immigration in the past — and I mean all of it — increased the income accruing to natives by about $10 billion a year or less. In other words, all of the immigration of the past few decades at most increased the income of natives by $10 billion a year. As a result, it must be the case that the net gain from the foreign student program must be small. After all, only a very small fraction of the permanent immigrants in the U.S. enter the country as foreign students — in fact, less than two percent.  And even though many work in the universities, the higher education sector, large as it may be, is actually a very small part of the aggregate economy.  So the gains from working — (unintelligible) — cannot be all that large.

My own calculations indicate that the total net gain to the country from the employment of foreign students is probably less than one billion a year, about 10 percent of the total in other words. Now this is the net gain accruing to the entire economy, but it may well be the case that the higher education industry benefits substantially. After all, the huge influx of foreign student workers has lowered wages in that industry, transferring a significant payroll saving to universities. So in fact, one way to think of the foreign student program is that it makes universities much better off because they face lower payroll. And that explains why universities keep continuing to recruit in foreign markets.

Last but not least, foreign students pay tuition and the tuition revenues, if they were to exceed the actual cost of an education, could be a very important source of economic benefits. It turns out, however, that the typical tuition payment in both public and private universities has no bearing whatsoever with what it actually costs to educate anybody. And in fact, the typical tuition payment in both public and private universities is not large enough to cover the actual cost of an education.  Professor Gordon Winston of Williams College has spent many years calculating these subsidies for both private and public universities. He estimates that the average per-student subsidy, even if students were to pay the sticker price — in other words in the absence of financial aid, paying sticker price tuition — the average per-student subsidy in a public university is $9,200 a year and the average per-student subsidy in a private university $6,400 a year, even if they were to pay sticker price tuition. 

Consider just the subsidy received by the 275,000 foreign students now enrolled in public colleges and universities. If Professor Winston is right, the taxpayer subsidy to each of these students is basically $9,200 a year. That amounts to a subsidy of $2.5 billion a year to foreign students — large enough to outweigh any benefits that I just calculated. 

Now let me clarify for a second how my calculations differ from those of lobbying groups, particularly NAFSA, the Association of International Educators. In their website they claim that foreign students contribute around $11 billion a year to the U.S. economy.  Roughly speaking, the get this number by literally added up all of the tuition paid by all the foreign students in the U.S. and that’s $11 billion a year. But this number has nothing to do with the net benefit accruing to Americans. Let me example why through an example. Suppose there were one million foreign students in this country right now and that each of them to buy a Dodge Caravan at $20,000 each.  That basically would say that they would be spending $20 billion buying Dodge Caravans — okay — equivalent to the $11 billion they pay in tuition. But what is the net contribution to the country?  After all, the students are getting something in return — the net contributions are what the U.S. gets to keep after they drive the Dodge Caravans away. Similar with education — the net contribution is what they get to keep after they pay their tuition and we pay in the cost that we have to pay in to educate them. And the point is the cost of an education far exceeds the tuition they pay.

I think there are two lessons to draw from my approach to thinking about the cost and benefits of the foreign student program. First, the program is just another redistribution program, taking wealth away from native workers and taxpayers and giving it to universities and foreigners. Second, it is far from clear that the program actually provides a net economic benefit for the U.S.

Now, so far I have only discussed the impact of foreign students in what I call measurable cost and benefits, things that we can easily observe and measure, tuition and so forth, right? Now the usual discussion on the contribution of the foreign student program is not so precise. Instead they stress the impacts that cannot be so easily measured. And it’s usually paraphrased as something like — and I’m quoting here from David Ward who is the current president of the American Council in Education. He basically testified the following recently. He said, “It almost goes without saying that the entire nation benefits from international education.” Since it almost goes that saying that we benefit, these people never bother actually explaining what the benefits are. They do not bother to list any calculations, but instead they simply list in the most generic way possible a list of platitudes discussed in the source of the benefits. Again I’m quoting from Dr. Ward. “Without exception,” he says, “I found them to be diligent and hard-working, they brought an element of diversity to our institutions, and they help expose American-born students to the world they would encounter after they graduate from college.” He also says, “The enormous advance in computational science in the 1980s would not have occurred without foreign students.” 

Needless to say there is no evidence whatsoever to back up any of these claims. Now, I’m not saying they’re false — they may well be true and substantial — but one should be very skeptical, particularly when the claims are made by people representing an industry that clearly gains financially from their present foreign students.

And let me actually leave a couple of counterexamples to those kinds of arguments. If having foreign students is so valuable to American students, why don’t we see foreign universities offering money to American students to go to foreign countries and enroll in their universities? I mean, we are the world’s largest market. If we gain from their presence, they should gain even more from our presence there, yet we don’t really see that.  There is also the argument that the U.S. somehow gets the best talent — we can skim the best and the brightest from other countries. But as I said before, over half of the foreign students who stay, they stay because of marriage, not because they have jobs or not because of high job demand for their services. Moreover, as you can see from the handout, the way that foreign students are actually recruited and are basically bought by American universities does not bode well for the argument that we get to keep the best and the brightest.

And finally, one could easily argue that the foreign students have lowered quality of undergraduate education. A common complaint among the graduates is that the lack of English language proficiency among foreign students hurts the education process and, in fact, there’s some evidence in fact that’s its true.

Now let me turn my last five minutes to the issue that has raised the most concern to 9/11: national security. We are now going to begin to track foreign students, which is all good and great. What I would argue is that even we were to track every single student, every single second of the day, there would still be a problem. And the reason is that we have traditionally banned the export of goods that we consider vital to our national security, such as super computers or material that can be used for used weapons of mass destruction. Yet, there is no similar band on the knowledge that can be acquired at American universities and exported abroad. 

Professors Paula Stephan and Graham Black of Georgia State have recently calculated the number of Ph.D.s granted to students from countries that are now targeted for increased monitoring, such as Algeria, Egypt, Iran, Iraq, Saudi Arabia, Yemen. Between 1981 and 1999 persons with student visas from those countries received 111 Ph.D.s in nuclear organic chemistry, with 40 of them going to Iraqis; four hundred and thirty-four Ph.D.s in chemical and nuclear engineering, with 106 going to Iraqis; and 112 Ph.D.s in atomic and nuclear physics, with 31 going to Iraqis. The security concerns raised by these numbers are obviously of far-reaching consequences. 

The Bush administration actually proposed recently that a government panel should review the applications for the students when they want to study in these sensitive areas, but this solution probably won’t work. The panel may have to screen as many as 2,000 applications a year. Even if the panel members work with the full-time jobs and devote themselves completely to screen the applications, they could at most devote one hour per student. It’s a lot of work in other words.  And the panel is not going to get any cooperation from universities. In fact, the Associated Press recently reported that a lobbyist for the university sector, who apparently doesn’t seem to get the point about the catastrophic cost of a security breach, instead complained that the panel would delay entry into the country and prevent students from enrolling at the beginning of a school term. 

It’s hard to come up with a better example of misplaced priorities in the higher education sector.  Whether we like it or not we will eventually have to confront the question of whether we should prevent foreign students belonging to particular national origin groups from enrolling in particular types of programs. After all the factors that motivate the export restrictions of security sensitive goods are just as relevant when thinking about restrictions of the type of foreign students admitted and the educational opportunities we offer to them. 

Let me sum up with a very simple conclusion.  The foreign student program needs radical surgery — period. The INS cannot control the number and type of students being admitted; the program is littered with corruption and fraud; many educational institutions, for better or worse, have the authority to admit foreign students and they look and act an awful lot like pieces-for-sale storefronts; and it is far from clear that the program actually benefits the country. Some policy changes have already been made; changes I might add that have been strongly resisted by the higher education industry for years. These reforms will improve the tracking of foreign students, although we wouldn’t know how many are in the country and where they are, but this only a short-run fix. 

So far the debate, I argue, has managed to avoid asking the single-most important question: is such a large-scale foreign student program in our best interest? As I have argued, it is far from clear that the program generates any economic benefit for the use. Surely foreign students benefit. Many of them receive a highly subsidized education and a substantial first chance to get a green card. Surely universities benefit. They have a limitless supply of low-wage foreign workers, a labor that is bound to keep wages down in that sector. But the benefits accruing to the entire economy are small, probably less than one billion (dollars) a year. Moreover, that benefit may well be more than offset by the tuition subsidy that taxpayers are now granting to educate foreign students.  So the time has come for us to reevaluate and restructure the program. 

Let me post the questions that I believe should be at the center of the policy debate over this issue.  Number one, why do American taxpayers subsidize the tuition of the hundreds of thousands of foreign students enrolled in public universities? Why? Number two, does it make any sense whatsoever to grant the authority to admit foreign students to over 70,000 institutions? And three, can we afford to ignore the national security rationale for keeping some education programs off limits to particular types of foreign students?

Let me actually finish by placing this in a more general context of immigration policy because I really do think that the most important lesson provided by looking at the foreign student program and removing all the nonsense and platitudes that usually fills those discussions is that it shows yet again how the foreign student program, just like the rest of our immigration policy, has failed to serve the national interest.  Thank you.

MR. KRIKORIAN: Thank you, George. Congressman Tancredo is going to have to run in a few minutes so I'll give him the chance first to give us a response.

Congressman?
 

PRESENTATION OF REP. TOM TANCREDO (R-CO)

REP. TANCREDO: Well, thank you. I do have to leave in a short time, but in fact I can probably say in a short time what I need to say in response to that and to this paper and that it is a microcosmic look, it seems to me, of the general problem we have in immigration in this country in total. Everything that Professor Borjas has identified as problematic in the student visa program is of course problematic in our immigration policy — a policy that many would suggest is really nonexistent, but it is a policy that is — and a process that is beset by fraud, by mismanagement and by, now, security risks of major proportions. 

It is complicated at the student visa level by the push-pull arrangement of the desire to come into the country by, of course, a great many people — by the way, I must say, as I listened to this I was thinking to myself that now I can at least perhaps begin to understand the recent poll that was done by Bill Bennett’s organization of college students and the response that was so peculiar, I thought, that 70 percent or so suggested that there was absolutely no difference between cultures, between United States culture — American culture — and, say, Saudi Arabia. Well, evidently half the people taking the poll were foreign students. (Laughter.) It makes a little more sense to me now.  And by the way, that statistic alone, the fact that the numbers that you present would belie the results of the poll, that if in fact there was no difference, why are they all coming? Why do they all want a part of the American experience here?

But, this is, as I say, a good microcosmic look at a huge problem and to a certain extent it needs to be dealt with the same way we need to deal with immigration in general. We have to look at the numbers — it is a result of numbers, frankly, I think, that we have experienced all of the kinds of problems that we are dealing with here. Well, two things. The numbers —far too many for any institution probably, any organization, any governmental construct to try to deal with, so something should be done with the numbers. We should reduce it so that we actually have an ability to operate a system effectively and efficiently, both with national immigration and specifically with this idea with the student visa program. We should reduce the numbers. 

You know, there’s another interesting aspect of this because, again — just like the bigger picture — there is this assumption that’s always been made that immigration in general is a good thing. It’s a good thing for the nation, it provides a diversity that is healthy and that it is economically beneficial to the nation.We have heard that proposal often when we start talking about immigration reform. But in reality — as I think it was Virginia Abernathy from Vanderbilt University put it so succinctly and clearly — that massive immigration, especially low-skilled, low-wage workers provides us with private profits; that is to say profits to individuals and businesses that employ these people at low wages, but public costs to a far greater extent and overwhelms those “private profits.”

So when you get a better look at the true economics of immigration, general immigration, you come away with the same sort of feeling that there is a mistake here; that we’ve been making a generalization that we have applied to immigration and specifically to the student visa part that is untrue — that it is not economically that beneficial to the United States. Then you weigh that against one other aspect, the national security issues that Professor Borjas points out and you, I think, are hard-pressed to come away with any other conclusion other than that we had better try our best to reform it and how we can do that, I think, immediately starts with a reduction in numbers.

Hopefully, we will in fact do what the president has requested and create a national security agency — I should say consolidate all of the agencies that presently have responsibilities for immigration control and immigration enforcement into one agency in Governor Ridge’s office, Homeland Defense. If we do, then that is one very important step in this process because, as we’ve already talked about often in the Congress, it is imperative that we split the functions of the INS, one into enforcement and the other, of course, into what we call sometimes the welcome-wagon aspect of INS, and then give both of those two organizations specific charges and specific responsibilities that can be handled, that actually we can expect them to manage and we can’t do it at the numbers that are coming in today and with the kind of culture inside those organizations. 

It’s not just a matter of numbers because of course you have to, you know, you have to people running those organizations, either the present INS or the ones we will — or the aspect that we will create — people running it that are dedicated to certain goals; that is, if your side is enforcement, then your job is to enforce the law. Today that is really not there. The people who are given that job in the INS for enforcement couldn’t really care less about it; they’ve even talked about it. 

Even the head of the INS, Mr. Zigler, said not too long ago he did not like being the policeman, that wasn’t what he considered to be the job that he signed up for. He also talked about being a libertarian and having that kind of conflict with his philosophy, being the guardian of our borders on the one hand and being a libertarian by political philosophy on the other. It is a conflict. I absolutely agree. It’s a challenging one. So we have to deal with that whole problem of having not just an organization in place that is systemically constructed to deal with the problem, but then the people appointed to it who, in fact, are dedicated to doing the job that we give them.

It’s a challenge. Certainly it’s a challenge here because you also have institutions of higher education, which for — well, since the beginning of the discussion on this thing have been less than enthusiastic about their role in trying to monitor and control. But, in somewhat of their defense, we talked to the University of Colorado people several times about this over the past eight or nine months, and they tell us that they have been fairly diligent about reporting students to the INS who have dropped out of the program or changed or whatever and the INS couldn’t care less.  Nobody does a thing about it. 

When any school reports is to the INS it’s sort of a, hmm, thank you very much, you know, call back tomorrow and we’ll see what — there isn’t — I would venture to guess that we could long and hard, especially prior to 9/11, to find anytime when the INS actually responded to a school that did it’s job in reporting. So, you know, it’s a two-edged sword here that we bring to this problem, and on both sides, there is little support for the idea within the higher ed community, and those people that are trying to do their job right find that there’s very little support for it within the enforcement agency that’s designed to try to take over for it.

So, again, it’s a great — as far as I’m concerned, sir, it is a — as usual the stuff that you do I find to be compelling and provocative.  It makes us think about things a little differently. It challenges the conventional wisdom that I think too often is characterized by the kind of platitudes that you pointed out in your paper that are used to describe any program like this. In this case, it’s just all got to be good, right, if everybody’s coming to the United States? And certainly we will all benefit by having hundreds of thousands of foreign students here. Well, certainly we will all benefit by having a million and a quarter legally coming into the country every year and about that number illegally every year. Certainly we’ll benefit by that, right? I mean, that has been the general thought pattern, which is why it seeped into the whoop and weave, whoop and weave of the INS, so that nobody really cares about enforcing it. They just assume it’s really good and the job is mostly one they’re trying to get somebody their green card. 

And so I hope that your paper will be taken seriously by my colleagues in their attempts to reform this process, but it really does seem to me somewhat boiled down to the issue of numbers. You know, let’s reduce the numbers to a point that’s manageable both by the nation, in terms of our ability to integrate people, and by the agencies that we establish for the purpose of actually monitoring the process. 

(Audio break, change tape.)

MR. KRIKORIAN: Mr. Hartle, now from the American Council on Education, will sort of give, presumably, a little bit different take.

Terry?

PRESENTATION OF TERRY HARTLE

MR. HARTLE: Thank you very much. I appreciate the opportunity to be here. While the congressman leaves — and there are so many people standing by the door. There are a couple of seats up here, there are some over here and some over here, if folks would like to take a minute and try to claim some seats so they’re not standing while we sit up here talking. 

I’m senior vice president of the American Council on Education. This is an organization that represents 1,800 two-year and four-year public and private colleges and universities. Our membership is roughly half the 3,600 colleges and universities in the U.S. We represent —our institutions represent about 85 percent of the students who are enrolled. I’d like to start out by summarizing why we think international students are important, realizing that Mr. Borjas will dismiss these as platitudes.  

We think they’re important for several reasons. First, they add an important element of diversity to our campuses. All colleges and universities want to be as diverse as possible to expose students to a wide range of views and perspectives. International students certainly help in that regard. 

Second reason we think they’re important is because it exposes native-born students to people from other backgrounds and cultures. For many native-born Americans, the first chance to meet and know someone from a different background comes when they are in college. Since we live in an increasingly smaller world, this is an increasingly important part of the educational experience. 

Third, many foreign students who are here as students will be leaders when they return to their country, in government, in business and in the arts. They’ll have a far better appreciation of democracy, market economics, and America and Americans by virtue of having spent time here as students. Many foreign leaders themselves accredit their time here as students with giving them a great appreciation for the people of the United States. 

Finally, we believe that by attracting international students, we get the benefits of their knowledge and skills, and that this adds immeasurably to the store of scientific knowledge. 

A little bit of background on process. We admit academically qualified students to study at our institutions, but we do not grant them a visa to enter the U.S. The federal government has an absolute right and responsibility to determine who should receive a student visa to study in this country. If the federal government has any concerns about a potential student, we do not want that individual to be granted a visa. After all, student visa recipients will be in our classrooms, in our dorms, in our libraries, and in our labs. 

A large number of student visa applicants are in fact denied, something you didn’t hear in this discussion so far. China sends more international students to the U.S. than any other country, yet roughly 40 percent of the Chinese students who have been admitted to an American institution find that their student visa request is denied by the U.S. embassy or consulate in China.  I hope too many of them didn’t spend $10,000 trying to buy a visa. The primary reason for denying student visas is that potential are unable to demonstrate to the satisfaction of the State Department that they’ll return to their home country at the conclusion of their studies. The law on this is unambiguous. It is the only category of visas that carries that restriction. 

Colleges do not have access to the information to make decisions about who poses a threat or to make judgments about who will return at the conclusion of their study, so the government must do this. But I emphasize, we don’t want any potential student now or in the future that the government does not feel will abide by all of the terms and conditions of their visa, period, paragraph.

Colleges have a responsibility to help the federal government monitor international students who are granted a visa. We’ve collected information on international students since the Cold War. Until 1988 we sent this information to INS regularly. In 1988, INS told us to keep it on file so that they could come and collect it when they wanted it. Every college in the country has literally dozens of file cabinets with INS records waiting for the agency. In 1996, Congress mandated a new electronic data system that is scheduled to become operational early next year. With this system we will be responsible for notifying INS within 24 hours anytime a student takes an action that may result in a change of visa status: changes majors, moves, leaves school, marries, seeks employment, and so forth. 

I was asked here, I assume, to tell you what’s wrong with Mr. Borjas’ essay, and I will certainly do that. But let me begin by commending him for raising some very important questions that need to be addressed. 

For example, he notes that there are some 73,000 schools and educational organizations that are eligible to issue the I-20 form that’s a prerequisite for getting a student visa. Nobody, including the INS, knows who is on this list. This is completely and totally unacceptable. There are only 7,000 schools in the federal student aid programs in this country. That is 10 percent, less than 10 percent of the number of schools who are eligible to admit students who can then apply for a student visa.  This does not make a bit of sense. It’s not clear when INS will know who is on this list, but until we do we can’t implement the electronic data system that I mentioned a second ago. You can’t let schools enter data on international students that they’ve admitted if you’re not sure if it’s a real school.

There are several other questions that Dr. Borjas raises that need urgent attention by policymakers, executive branch officials, and representatives of colleges and universities. The sooner we start such discussions, the better. 

This does not mean that I like the essay. Its hypothesis is “the remarkably powerful combination of INS ineptitude in the higher education sector’s greed perverted what would have seemed to be a sensible and noble effort into an economically dubious proposition, and a national security fiasco.”  The paper written to prove that point of view is not fair and judicious analysis of the issues involved. This is ideology masquerading as analysis. That means, for starters, you need to ignore the title and evaluation of the foreign student program. To be an evaluation would require that the paper balance the pros and cons of the foreign student program in some fair and reasonable fashion. To meet the academic standard, an evaluation has to be carefully and fairly designed and executed. The paper does not meet that task. It dismisses arguments that undermine its central thesis, it makes much of dubious data that supports its thesis, and ignores information that would undermine it.  It finds much to criticize in the foreign student program and, generally, nothing at all to like. 

I hasten to add that Mr. Borjas is a distinguished scholar who has written an extremely thoughtful book on immigration policy and the American economy. Indeed, his book is a nuanced and carefully balanced bit of research in a policy area where emotion and ideology usually overwhelms analysis. In this article, the opposite has happened, and emotion and ideology has swamped the analysis. There’s no doubt in my mind that he could have written an extremely valuable article here, but he chose not to. The article is best thought of not as an evaluation, but as a polemic, a diatribe, a broadside, or an attack. By my account, Mr. Borjas raises nine basic criticisms of the foreign student program. They are as follows:

One, international students are not monitored while they are in the U.S.  Two, some international students stay legally at the conclusion of their studies, others stay illegally. Three, some people “buy” visas to enter the country. Four, some potential students pose a physical threat to U.S. security. Five, Americans subsidize international students. Six, too many programs and schools are approved to issue I-20’s, the form needed to apply for a student visa. Seven, the benefits of having international student visitors on our campuses are exaggerated. Eight, international students lower the quality of undergraduate education. And nine, there are no controls on what foreign students study.

It’s worth noting that the first five of these criticisms, and I’ll repeat them — that they’re not monitored while they’re in the U.S., that some stay legally and some stay illegally, that some people buy visas, that some pose a physical threat to the U.S. security, and that Americans subsidize international students — are not unique to international students. These issues can be raised about any type of visa recipient. Some will stay, they are not monitored very well, some people buy visas, some can pose a physical threat, and we subsidize them. Indeed, any visitor who uses an airport, train station, visits a national park, travels on a U.S. highway, or comes to the U.S. Capitol is receiving a subsidy. But if we’re worried about these things, and we want to raise questions about them, we need to worry about them across the board, not just with respect to student visas. If a would-be student can buy a student visa, they can just as easily buy a tourist or work visa. I don’t think it helps to see the programs confined to any type of visa. 

I think that the article is flawed in six respects. First, I’m not sure Mr. Borjas understands the student visa process. For example, he says there is no tracking of foreign students once they enter the United States. This is completely untrue. Colleges keep extensive records on foreign students who are enrolled, and the information we keep is dictated by the INS. For years we reported the information to INS via a number of forms, including I-20, I-538, I-20B, I-721 and I-765. Once SEVIS goes operational, we will deliver it in real time. Schools often report unusual behavior, as the Pan-Am International Flight Academy did in the case of Zacarias Moussaoui, the so-called 20th hijacker now awaiting trial in Alexandria, Virginia. 

Mr. Borjas also claims there are no restrictions on what international students can study. This too is incorrect.  In fact, there are significant restrictions. These restrictions have been generated by different agencies and cover different issues. The most prominent is the so-called Technology Alert List, created by the Commerce Department. Students who wish to study in a field listed on the Technology Alert List — that’s 16 fields, including such things as nuclear engineering, lasers, sensors, ceramics, radar, electronic guidance systems, munitions — cannot be granted a student visa until the State Department generates an express security advisory opinion on that student. The system is particularly aimed at two groups: potential students from state sponsors of terrorism — that’s the “big seven” — and, two, non-export control countries, including China, India, Israel, Pakistan and Russia. 

The State Department has established a very formal system called Mantis. It’s triggered whenever a student from one of these countries applies for a visa in one of the Technology Alert List fields.  By all accounts, the system works well. The Bush administration has proposed a more extensive system called IPASS that will formalize this system even more by bringing together all the federal security agencies and the federal science agencies to look at particularly worrisome cases. This system, despite what Mr. Borjas said in his anonymous quote, cited by the AP, has our enthusiastic support. 

Second, Dr. Borjas says that if foreign students were such a good thing, then other countries would be rushing to recruit them. What he does not add is that they are. He thinks we are unique in pursuing international education. In fact, while we have the largest number of international students, our share as a percent of the total is declining. In an increasingly global economy, all countries with highly developed education systems see an advantage in attracting international students. In Australia, for example, the international education market has grown by an average of 15 percent every year in the 1990s. Foreign students now comprise 18 percent of the total enrollment in Australia, compared to roughly 2 percent of total enrollment in the U.S. 

Again, contrary to what Mr. Borjas asserts, Australia’s efforts have clear and unambiguous governmental support. The government liberalized visa rules to permit more international students.  Several countries, including Australia, New Zealand, Canada and the U.S., have asked to make higher and adult education services a subject for negotiations in the current GATS negotiations so that the flow of international students can be increased. It may come as a surprise to Mr. Borjas to learn that U.S. universities have indicated to the U.S. trade rep, we’re not sure this is a good idea.  There are other examples.  The German government offers scholarships to attract foreign students to study in that country.  British Prime Minister Tony Blair announced that national policy in the United Kingdom would be to increase the number of international students. 

Three, the clear benefits of international students cited by colleges are largely dismissed as sweeping platitudes. Mr. Borjas says, “Needless to add, there is little evidence to support these claims. While some of the benefits could exist and be substantial, it’s prudent to be somewhat skeptical, particularly when the claims are made by persons representing an industry that gains financially from the presence of foreign students.” In other words, there is no public interest that we can speak to; it all comes down to money, in his view. It’s not clear how he can easily dismiss the comments of government officials who have spoken regularly and strongly on this point, but he does so. 

Academics, of course, have long noted the benefits of bringing foreigners to this country.  Here is one, and please bear with me while I read this rather long quote. 

“Immigration has blessed the U.S. through much of its history. Every country is, if one goes back far enough into history, a nation of immigrants. But the U.S. is unique in this regard. No other nation has offered such a beacon of hope and aspirations to tens of millions of persons from around the world, and nowhere has this beacon shown for so long. Without the dreams and toil of the millions of immigrants who tamed and harvested the land and helped build great cities from sea to shining sea, the U.S. could not offer today such wonderful and unrivaled mix of cultural and economic opportunities. Unless the U.S. chooses a wise immigration policy in the future, there’s a real chance that there simply will be no immigration at all. That would leave many people — immigrants who would greatly benefit from the opportunity in sharing the American dream and who could in turn benefit the American people — forever knocking on heaven’s door.” 

But no university president could have said this more eloquently, so I will cheerfully align higher education with Mr. Borjas’ unambiguous platitudes from his book “Heaven’s Door.” Now, I know that since he’s an author trying to sell books and that he checks Amazon.com hourly, as he told us, I should discount this comment because of his obvious financial interest. I will still agree with him.

Fourth, while he criticizes tried and true platitudes offered by college and universities in support of international students, his argument relies on flimsy evidence and ad hominum criticisms to make his case. He asserts that, “The large influx of foreign students into particular programs has altered the educational plans of generations of native-born Americans.” He asserts, “Bright native-born students are apt to pursue fields that have not been targeted by immigrants, such as business and law.” I’ve heard lots of theories about why American students find business and law appealing career choices, but I have never heard anybody suggest that they’re doing it because the immigrants aren’t there. Ironically, far and away the most popular field for international students in the United States, is business and management. So I assume we will soon be seeing American students fleeing business and management courses. He even writes, without significant information or evidence, “Foreign students have lowered the quality of undergraduate education.” These are broad-based charges that have very little data to back them up. 

Fifth, his arguments about the economic benefits of international students are incomplete or terribly confusing. He notes that there are three distinct types of costs and benefits generated by foreign students. For some reason, he doesn’t count the benefit of goods and services purchased by foreign students while they’re in the United States. The Commerce Department says that higher education services are the fifth-largest service sector export that the U.S. has.  In other words, international students help lower the U.S. trade deficit. This whole line of reasoning is simply ignored. Given that there is a fairly obvious contribution that these students make, and that many economists are worried about the trade deficits, it’s not clear why an economist like Mr. Borjas would simply ignore it. But obviously, factoring the $11 billion into the cost/benefit equation obviously changes the analysis considerably. 

In addition, Mr. Borjas doesn’t seem to have a very good understanding about the financing of higher education. For example, he correctly points out that every student enrolled in American colleges, public or private, receives a subsidy. At private colleges, he suggests the subsidy is at least $6,400.  n other words, New York University, which is the number one institution attracting foreign students to the U.S., with 4,900 of them, is spending $31 million annually to attract them. But if NYU was paying such a large subsidy to attend, how is it that institutions are greedy? Aren’t you greedy only if you make money on a proposition? Can you spend money and still be greedy?  Mr. Borjas would have us believe that even though they’re losing money on every international student they admit, they’re at the same time anxious to get more of them because of the revenue they generate. This doesn’t add up.

Sixth, he implies we can reduce the risk of terrorist attacks simply by eliminating some or all international students. This doesn’t make sense. We admit roughly 300,000 international students a year out of 30 million foreign visitors who get a visa. In 1999, the U.S. granted more than 20,000 visas to Iranian citizens to come to the U.S.; 400 of those, just 2 percent, were student visas. To cite another example, we issued 2,170 visas to Iraqis, and just 36 percent of them were for student visas. The vast majority of people who get visas to visit the United States come under the category of B visas, or pleasure visas. We don’t get very far if we stop student visa recipients and leave the door open for every other type.

Finally, and most disappointingly, it’s not clear what Mr. Borjas would do about the many problems he identifies. He clearly believes the system is totally broken, but he offers absolutely no suggestions about fixing it. Does he want to bar all international students completely? Does he want to bar students from some countries but not others? Does he want to bar students from studying in certain fields but not others? If so, which students and which fields? What steps would he take to improve the INS? What steps would he take to limit the number of schools that can issue the I-20s?  It’s well and good to write a polemic about a significant public policy issue, but to do so without any hint of what should be done to address it, especially for a professor of public policy, is at best half a step. And the failure to consider what public policy steps ought to be taken illustrates, I think, what is most problematic about this paper. It generates a great deal of heat but sheds very little light on this important issue.

MR. KRIKORIAN: Thank you, Mr. Hartle.

(Applause.)

Let me give George a couple — two minutes to respond.

MR. BORJAS: Let me just respond to a few of the issues here: number one, I don’t understand the student visa program. It’s not that I don’t understand it; I view it from a perspective that’s quite different from the people who view it because their livelihood depends on it. Mine doesn’t. So it’s just that I’m taking much more objective viewpoint on that. 

Number two, suggestions for fixing it. Let me give you one suggestion for fixing it. Actually, one thing -- before I get to the suggestion, one thing that Mr. Hartle did was to basically grab my point that foreign students are heavily subsidized. I mean, he did not dispute that at all. So the subsidy is there. I mean, there is no doubt about the fact that foreign students are heavily subsidized. Regarding NYU, it may be a private institution, but they’re also heavily subsidized by the federal government, and by all kinds of state government — or by all kinds of government. So the fact of the matter is that even those students enrolled in private institutions receive a very large subsidy from the public sector. And NYU gains from both that subsidy and from having foreign student workers. I mean, they have lower pay as a result of that. So it’s very clearly in their interest to keep admitting them, since they’re being subsidized and they’re getting, basically, cheap labor. 

Now, a suggestion for fixing it, we already have on the books a law that basically says that if you’re a foreign student at the secondary level, which actually is legal in the U.S., believe it or not, you’re supposed to pay the school district the average cost of your education. And the law actually has a very detailed formula of what it would be that you have to pay if you want to study high school in the United States, basically, school districts per student cost. Let’s do the same thing for college students. Let’s actually force, as part of the policy — since we both admit they’re being subsidized — let’s actually change the law so that students in higher education pay the average cost of their education. In other words, why should the taxpayer subsidize them? We shouldn’t. And let them pay the full cost of education. They’re being educated, they get the returns when they leave, they should pay the cost of their education. That’s changed a lot of ways — actually very clear-cut change in policy that’s already in the law for secondary schools.

A couple more things. He was saying that perhaps we already have restrictions on what students can study. I gave you the data on how many Ph.D.s were actually granted in very security-sensitive fields. I don’t care what the restrictions say in principle; the facts are quite different.

And I dismiss the comments of government officials regarding the student program? Definitely.  (Laughter.) And I’ll end with that.

MR. KRIKORIAN: Okay, thanks, George.

QUESTION AND ANSWER SESSION

MR. KRIKORIAN: Let's take your Q&A for a little while. Identify yourself, please, and say who particularly, if anyone, you want to direct your question to.

No questions at all?

Okay, yes. Identify yourself, please.

MS. GEYER: My name is Elizabeth Geyer. I’m from the United States Student Association. 

I guess, in terms of how you had repeatedly talked about that there’s obviously an underlying or economic interest and therefore they should be skeptical about anything the higher education community says, I guess my question is about the Center for Immigration Studies. What is the fundamental — are you all just anti-immigration in general or is this just another sort of report to — because, I mean, my view specifically of this program is that it’s created because there are going to be — or I haven’t heard of a way to track visitors or for people in business or other visas. 

So, because this program is particularly students, it’s convenient to create, you know, this system to track students because — I mean, how are you going to track visitors? Are you going to have the hotels report to the INS, or are you going to have, you know, business people reporting through some other system? So, I mean, in terms of just a percentage, like was mentioned, you know, 300,000 out of 30 million, and what percent of those — if the student visa holders are, you know, at any — if there’s any evidence that they break the laws anymore, or that they contribute less to the economy —

MR. KRIKORIAN: The question basically is why students and not everybody else essentially. So, is that what you're asking?

MS. GEYER: Well, that, and also, what is your position on everything else?

MR. KRIKORIAN: Well, I mean —

MS. GEYER: I mean, you know what I'm saying? Like are you also, just in general —

MR. KRIKORIAN: Yeah, okay. Well, first of all, George doesn’t work for us so we publish stuff from a lot of outside people. But, I mean, our — on our website we have our mission statement. Our job is to examine and critique the impact of immigration on the United States, and we examine all different elements of it. Actually, we haven’t done much on foreign students, and it’s actually a big hole, I think, in our examination of the whole of immigration policy is that almost nobody has looked at foreign students. So, we are in effect trying to play catch-up because this is an area that has been very seldom examined. 

I’ll leave it to George to talk about —

PROF. BORJAS: Let me describe the history of my work on this, since it’s been come into question. The Sloan Foundation has a program on scientific manpower, and I actually wrote an academic paper for them for a conference that was held at the National Bureau of Economic Research in January, of which this is sort of a wordy sort of version of that. So I began to worry about this issue after 9/11, obviously, but it’s sort of an academic work I’m doing. 

And what happened after 9/11 was that I quickly discovered there are a whole bunch of issues in immigration policy that my book doesn’t address at all — and my book was only written two years ago — and one of them being foreign students. So that got me — that sparked my interest in the topic. 

MR. KRIKORIAN: I just want to take exception that we are publishing wordier versions of academic papers. That's — I don't know if that's good or not, but anyway — (chuckles).

Okay, anyone else? Next question, yes.

AUDIENCE MEMBER: (Off mike) — and my question is for Mr. Borjas. Do you have more research, because it seems like a lot of the facts are missing. In terrorist attacks, there were three Americans, or officially American citizens, and there are, you know, terrorist al Qaeda members that have French passports. So it seemed like you just highlighted the, you know, people who came here for the student visa. 

And my second question was on — you mentioned a lack of English proficiency as hurting the system. Do you have more research on that because — (inaudible) — in the United States — (inaudible)? So I want you to elaborate on that.

PROF. BORJAS: Let me answer the last question first. I actually have a paper published in the American Economic Review, the top journal in the profession of economics, regarding the impact of foreign students and their academic achievement upon the graduates. And in my paper I find a substantial negative impact — not a huge negative impact, but a negative impact on academic achievement. In that paper, which is on my website if you want to go see it, you will also find reference to other work that in fact have studied that topic quite precisely. 

Regarding the first question, I think Mark has much more to say about the —

MR. KRIKORIAN: What was the first question?

PROF. BORJAS: Who came regarding the terrorism in the — (inaudible) — and so on. They've just completed a study on that.

MR. KRIKORIAN: Sure, I mean, we just did a report, which I’ll hold up again, on our website in its entirety, examining how the terrorists entered the country over the past 10 years; not just the 9/11 terrorists, but starting in 1993, the first World Trade Center attack, the murder of CIA employees, going through to 9/11, the plot to blow up the Brooklyn subway, the New York landmarks, the African embassy bombings. And al Qaeda has used —

AUDIENCE MEMBER: Did you think that Oklahoma bombing that was done by Timothy McVeigh, that that was —

MR. KRIKORIAN: Well, there was no immigration aspect to that. That’s why we’re specifically looking at the immigration aspects of this. Al Qaeda, so far as we know, wasn’t involved in that.  Although apparently, the supposed third conspirator, that may or may not be fictional — there is a drawing of them — but it looks very much like the guy they just arrested, Jose Padilla. But that’s kind of a conspiracy fantasy so far. 

But the point is that al Qaeda, over the past decade, has used every aspect of the immigration system. In other words, it’s penetrated every element of immigration. We’ve had legal immigrants and naturalized citizens among the terrorists, illegal aliens, foreign students, people who applied for asylum, people who snuck across the border, people who stowed away on ships. So the point is that every aspect of the immigration system has been penetrated by al Qaeda, and it all needs to be looked at, and essentially foreign students is one area that hasn’t been looked at as extensively as others. 

And let me add that I think there’s an additional reason, really, to look at foreign students as opposed to B visas, for instance, as Mr. Hartle pointed out. In other words, tourist — much shorter-term visas, because, you know, it takes a while to plot, to hatch this kind of conspiracy. If you become an illegal alien after 30 days, or even six months in the United States, that is much more problematic than if you have two, four, six, ten years to operate in the United States. And if a foreign student visa helps you get married, and therefore get a green card and ultimately citizenship, even better. Bin Laden himself has specifically said that one of his chief objectives is recruiting people who have — naturalized U.S. citizens because they’re coming and going is much — they have much easier time entering and exiting the Untied States, because as citizens there’s not the same kind of scrutiny or patrol as there is for temporary visa holders. 

So this is, you know, not the entirety of the security problem that we face after 9/11, but it’s a real and significant part that nobody’s ever looked at, really, before.

MR. HARTLE: Let me pick up on her point about Mr. Borjas’ assertion that foreign students have lowered the quality of undergraduate education. He makes two points. The first point is that English language proficiency is not what it should be by some foreign students. That merely plays into popular stereotypes without citing any evidence to back it up. 

The second point he makes, that they actually are not as good at teaching as native-born students, was new to me so I went back to look it up. I found two articles that dealt with this. One was a study by the University of Wisconsin Madison that doesn’t support Mr. Borjas’ hypothesis at all. The other, as he indicated, was a study that he did that looked at one class in one department at one public university. I will quote to you the first sentence of his own conclusion. “It is important to stress the limitations of this study. The results presented in this paper cannot be generalized to other fields or other institutional settings.” Of course, what he’s doing in this paper, this wordy paper, apparently, is generalizing in just that fashion.

PROF. BORJAS: There are also other studies that Mr. Hartle hasn't found, which were also published in the American Economic Review.

MR. KRIKORIAN: I don't want to get into a — (inaudible). Come up afterwards if you want citations and all that. Let's not do that here.

Yes, sir.

AUDIENCE MEMBER: Richard Harkle (ph) from — (inaudible). I’d like to ask you to comment on your subsidy issue. I’m not sure if the article of the Williams College professor that talked about — (inaudible) — subsidies across colleges and universities, but my guess is that that’s referring to the actual subsidies that a state provides its own students — (inaudible) — that tuition does not fully cover the full cost of education. 

Representing the public universities and colleges as I do, one of the things we’re very conscious of is the cost of education and the price of education. When it comes to subsidies, I think we’re very familiar with that when it comes to non-resident students. And so, when we’re talking about the tuition that is paid by a non-resident student, say, going to the University of Michigan from Wisconsin or Illinois or Germany or Italy or South America, and so forth, they’re paying the full cost of the cost of education and are not being subsidized.

PROF. BORJAS: I am glad you mentioned the University of Michigan, because it’s actually a school I mentioned in the paper here, just handed out in the CIS report. The University of Michigan out-of-state tuition is an additional $14,608 per year. Gordon Winston, of Williams College, estimates that the University of Michigan, a very good public university, the subsidy is $24,340. So even if you were to pay out-of-state tuition —

MR. KRIKORIAN: The total cost —

PROF. BORJAS: The total cost for a student — even if you were to pay out-of-state tuition at Michigan, you still have received a large subsidy.

MR. HARTLE: Presumably, the good citizens of Michigan are quite capable of deciding whether they want to do that or not.

PROF. BORJAS: They should learn that fact.

MR. HARTLE: It's not exactly hidden that the subsidies exist for everybody who goes to college in the country. I'm surprised you haven't realized this before. This is very widely known within higher education.

PROF. BORJAS: Somehow, it's escaped the interest or the attention —

MR. HARTLE: It escaped you, yes.

PROF. BORJAS: — of the foreign student lobby, the fact they're being subsidized.

MR. KRIKORIAN: Yes, sir.

AUDIENCE MEMBER: (off mike) — on this issue of ideology. Mr. Hartle, you have intentionally accused Mr. Borjas of being ideological. I'd like to know what ideology he is guilty of. I'll also ask Mr. Borjas if he thinks that Mr. Hartle — (off mike) — of the study is also informed by ideology. And when I say — (off mike) — for or against immigration.

MR. HARTLE: Yeah, my view is I think that now more than ever we need to engage the world.  Education promotes familiarity; familiarity leads to understanding. If that’s an ideology, that would be mine. 

Throughout our history, some people have always advocated backing away from the world.  Isolationism has never been far from the surface in American society, particularly in troubled times.  However, we also know that isolationism, whether we’re talking about it as the “yellow peril,” whether we talked about it as America First, while it might work in the short run, historically is a bankrupt and discredited approach. As the world grows ever smaller, the chances of effectively walling ourselves off from the rest of the world grows smaller too. 

Mr. Borjas’ view is that we should wall ourselves off from the rest of the world, apparently; that we should stop international students coming in; that the benefits are grossly overestimated and the costs are widely unrecognized. The reason I think his approach is ideological is because I think he torques the data around to prove his point without providing any sort of a fair and balanced approach that normally one would expect of a scholar who’s written a book such as his. I’d hate to be a student who turned this paper in at the Kennedy School as a thesis.

PROF. BORJAS: He'd get an A-plus.

MR. KRIKORIAN: We'll let our Cuban-born nativist respond.

PROF. BORJAS: Right. First of all, Mr. Hartle completely misstated what I actually say in the paper, in the following sense: There's not a single line in this paper or in the academic version of this paper that says we should stop foreign students altogether. That's not —nowhere in this paper does it say that, and I hope you find that before you leave.

MR. HARTLE: Well, if it's not there, I can't find it.

PROF. BORJAS: Of course you can’t because it’s not there. What I do say and what I try to do — I mean, literally what sparked my interest in this was that the foreign student program post-9/11 was one of those issues in immigration they had never even been thought about. I mean, I’ve always thought about it — being a university professor my whole life, I’ve always thought about it as a very good thing that seemed to be a terrific thing; great research assistants and stuff like that.  And I’ve hired a whole bunch of them over my lifetime, and a lot of them are my friends. 

So I’ve always had a very good, sort of, outlook towards this, but I began to think about it and I began to look at the literature. And the fact of the matter is that if you were to set aside all the stuff put out by the lobbying groups — higher education groups or international education groups — there’s almost no academic study, believe it or not, of the foreign student program. I mean, it’s just quite incredible, the huge hole in the literature — thinks one of the topics that people haven’t seemed to care about. 

And that’s what sparked my interest. And if you want to think about ideology that drove me into this, it’s really not ideology at all. I was just trying to find out what was going on. I mean, I literally was trying to find out what was going on, and I wanted to find out how the program worked, which meant I got on the Web and literally went to these websites that I handed out a couple examples today. I mean, that’s the way I found out. I got on the Web; I said, what if I were a foreign student trying to get into the U.S., where would I go? And I learned how the program works by going to these websites. And that’s how I become interested in this. It’s really just doing a cost-benefit analysis, which amazingly now does not exist in the literature, period.

MR. KRIKORIAN: Let's take a couple more questions.

AUDIENCE MEMBER: (off mike) Could you please define the foreign student program that you're evaluating?

PROF. BORJAS: Okay. The way I — and technically I define it better in the paper — it's the F-1 and M-1 programs.

AUDIENCE MEMBER: So the INS student visa —

PROF. BORJAS: F-1, M-1.

AUDIENCE MEMBER: But what's the program?

PROF. BORJAS: Oh, the INS student visa system. You know, the F-1, M-1 program, along with the F-2, M-2 on the spouses, and so on, right?

AUDIENCE MEMBER: So you're looking at the way INS — the way Congress has told INS to — (off mike)?

PROF. BORJAS: The way that the F-1, M-1s are handed out, yes, precisely.

MR. KRIKORIAN: Yes?

AUDIENCE MEMBER: My name is Jean Eluga (ph). I'm with the American Dental Education Association. As a Cuban-born citizen, don't you find yourself somewhat hypocritical by criticizing colleges and universities since you are an employee and also a foreign-born citizen?

MR. KRIKORIAN: That's why we didn't do this at Harvard.

PROF. BORJAS: That's right. (Laughter.)

What’s hypocritical about it? I mean, it’s an interesting scientific question, okay? Do we as a country gain from the foreign student program? Is that a bad question to ask? I don’t think so. It’s actually the respectable question to ask. It’s a question that is sort of an answer before we debate this issue. And what I found out was nobody has asked the question before. And as an academic it’s always great to be first asking a question. You get more fame so you get more money, and therefore I did it. No hypocritical aspect to this at all. A simple scientific question: what is there to be gained from the program?

MR. KRIKORIAN: No, let's not — ask him afterwards. I want to give more people a chance —

AUDIENCE MEMBER: One comment. You said you were going to benefit economically by focusing on this question — completely hypocritical.

MR. KRIKORIAN: Yes, ma'am. You're next.

AUDIENCE MEMBER: (off-mike) Howard University School of Communications at Howard University Television. The question is, you mentioned a lot about national security, and do you think increased scrutiny of foreign students will be a panacea for the overall national security problem?

PROF. BORJAS: That is not what my paper says. That is not what I said. The security issue that I raised was specifically the fact that there seemed to be foreign students from particular countries studying particular fields that we seem to do nothing about. That is the only security issue I raised in my whole talk. That is the only security issue raised in my paper. 

I think we should be concerned about the fact that a substantial number of Ph.D.s are being granted to foreign students from countries that could be hostile to us in the future, in very sensitive areas.  And what I also said was that the Bush program of trying to screen these applications, which is 2,000 applications a year — now, just think of what 2,000 is. There are 2,000 work-hours in a year. So, as I said before, even if every single member of the panel worked with their full-time jobs and just devote themselves to reading the stuff that’s going come in, they have one hour per application. It’s not going to work. 

Moreover, they find a very uncooperative university structure to deal with this. So what I said is that the Bush program would not work and that, whether we like it or not, we will eventually have to confront a very simple question: Should we try to prevent particular types of students from studying particular types of programs? That’s all I said.

AUDIENCE MEMBER: (off-mike)

PROF. BORJAS: That's a security issue to be decided upon.

MR. HARTLE: I have indicated that the colleges and universities enthusiastically support the Bush administration’s IPASS program. Mr. Borjas keeps claiming we oppose it, and he’s simply wrong. We enthusiastically support it.

MR. KRIKORIAN: Let's take one last question.

AUDIENCE MEMBER: My name is Steve Camarota. I’m director of research at the Center for Immigration Studies. 

On this question of subsidies, which I think is the most interesting thing, as someone with a Ph.D. who knows economics, I was unaware of the subsidy myself, so I confess ignorance there. But whenever I’ve seen your organization or the others testify, the subsidy doesn’t — I mean, we don’t hear, well, foreign students pay $10 billion a year in tuition but they use $12 billion a year, and the rest — the other $2 billion comes from taxpayers. (Inaudible) —taxpayers are getting a really good yield for their extra $2 billion. 

I take it now, though, that the colleges and universities will try to incorporate that and say, yes, it’s true, we have this $2 billion or $3 billion going to them — to the foreign student —but it’s still a good deal. When I’ve heard congressmen cite your statistics, they never mention the subsidy. When I heard folks testify before Congress, they never do the subsidy. It seems to be a pretty big issue that the American Council on Education, as well as the universities in general, has pretty much glossed over. Are you suggesting now that they will be talking more about the subsidy?

MR. HARTLE: Why is it a big issue?

AUDIENCE MEMBER: Because when a congressman says, look, these foreign students pay $10 billion a year — and I can think of one in particular that says, this is an enormous benefit; that $10 billion is just cash in our hand, was basically the term. But in fact, the extra couple billion the taxpayers kicked in wasn’t mentioned. It doesn’t mean the taxpayers aren’t getting their money.  What it means is it’s an important consideration. And that’s where I see Dr. Borjas’ — we need to think about that. Are we getting our money’s worth? You might decide we’re not, and you might decide it would be cheap at twice the price.  he point is, you’ve got to know it to debate that aspect.  And I don’t see the organization as having been very helpful in that area. (Off mike) — the subsidy and say, but, hey, it’s a good deal.

MR. HARTLE: I guess it’s never been a particular surprise to anyone in higher education that every student, whether they’re born in the U.S., whether they’re born overseas, does not pay the full cost of their education. It does not matter whether you go to a public college or a private college. You’re going to pay a price, there will be a subsidy that somebody else is paying, and you will — the total cost of your education will be on top of that. 

What I’m not really sure about is why we should be — apparently you think we ought to have three pricing structures, I gather, at public institutions. Apparently this might what Mr. Borjas thinks. In-state students get one, sort of rate, out-of-state students gets another rate, and foreign students get a third rate. Obviously, any state university, any state legislature, can do that anytime they want. I hope you’re not suggesting that state legislatures don’t know the difference between cost and price in higher education and don’t appreciate that they’re subsidizing the dost of the education that they’re giving students. I would think state legislatures are very much aware of how much the tuition costs and how much it costs to educate a student.

AUDIENCE MEMBER: But in general, what are you thinking? That they're subsidizing their fellow Americans. If you have foreign citizens, that's a different dimension, and at least it would be something that you can think about.

MR. HARTLE: Ah, the "yellow peril" is back.

AUDIENCE MEMBER: I think it's outrageous for you to say that.

MR. HARTLE: No.

AUDIENCE MEMBER: You suggested that anyone that says, let's debate this foreign aid program, then you are basically a race-baiter. That's outrageous. Why do that?

MR. HARTLE: No. Well, because I think your point is outrageous to suggest that nobody knows how higher education is financed in this country. You’ve suddenly discovered something, and the fact that the country isn’t outraged about it troubles you deeply. The fact that state legislatures apparently don’t know how they’re paying for higher education in their state is something that offends you. 

I think you’re fundamentally wrong in what you’re saying about how higher education is financed.  And the fact is that private institutions don’t get subsidies from state governments to do that.  They’re paying for it out of their own money. It is inconsistent with Mr. Borjas’ underlying philosophy that financial incentives determine all. If NYU is subsidizing students at $6,400 apiece, out of their own money, greed doesn’t seem to enter into the equation very clearly. At least it certainly raises lots of questions about his understanding of financing higher education. 

MR. KRIKORIAN: Let me give George just a last wrap-up, and then we have to —

PROF. BORJAS: I will conclude by asking my three questions again, actually put in this context.  Let’s have, for the first time ever, some honest advertising from the American Council on Education, from NAS (ph) and all these lobbying groups regarding the subsidy, and ask the simple question as part of the debate: Should American taxpayers subsidize the tuition of hundreds of thousands of foreign students enrolled in public universities? Simple question. Let’s actually have that as a debate. 

Number two, does it really make any sense whatsoever for the INS to decentralize the system so much that over 70,000 schools have the authority to admit foreign students? My answer is no. It makes no sense whatsoever, and we should rein that in. 

And number three, getting back to the national security issue, we can really, as a country, cannot afford to ignore and put our heads in the sand regarding the fact that perhaps some educational programs should be off-limits to particular types of foreign students.

MR. KRIKORIAN: Thank you, George. Thank you, Terry. I appreciate everybody coming and hope to see you at our next event. Thanks a lot.