A Passage to America: University Funding and International Students

Abstract

The number of international undergraduate students at U.S. public research universities increased dramatically over the last two decades, alongside concurrent reductions in state support for universities. We show that these trends are closely connected as public research universities relied on foreign students to cushion the effects of falling appropriations. The growing capacity in emerging economies to pay for a U.S. education provided opportunities for universities to recover revenues from full-fare paying foreign students. Between 1996-2012, we estimate that a 10 percent reduction in state appropriations led to an increase in foreign enrollment of 16 percent at public research universities.