How international students are keeping US colleges afloat and powering the tech industry

Think back on your college experience and you may recall the presence of the International House, an on-campus residence set aside for international students. The fact that there was likely only a single house for all the students probably made you think your school didn’t have a large international contingent.

Now consider the fact that nearly 1 million foreign students are enrolled at colleges and universities across the United States — a figure that has jumped 40 percent in the past decade.

As students from across the world stream onto U.S. college campuses, these International Houses increasingly make obvious the fact that foreign students are not a “special interest” that can be neatly housed in one section of campus. Today, the opposite is true: international students not only make up an increasing share of the overall U.S. student population, but also single-handedly keep these institutions afloat financially. Adding to this — amid considerable debate over a STEM crisis in the U.S. — international students are pursuing studies in science, technology, engineering and mathematics in record numbers, which in turn is powering the U.S. tech industry.

The numbers on international students at U.S. colleges and universities are astounding:–

  • The U.S. is host to the largest proportion of the world’s 4.5 million college and university students, almost double the number studying in the United Kingdom, the second biggest host.

  • Of the 974,926 international students in the 2015-2016 academic year, 586,208 were undergraduates, with more than 165,000 coming from China.

  • In 2016, 45 states hosted more international students compared to the previous year, with five states witnessing double-digit growth rates. For example, Texas increased its international student population by 18 percent.

  • Eight institutions had more than 10,000 enrolled international students, including New York University, University of Southern California and Columbia University.

The economic impact of the increasing growth of international students in the U.S. is equally stunning. In the 2014-2015 school year, international students contributed more than $30 billion to the U.S. economy and supported more than 373,000 jobs.

Since the 1950s, the United States has been the destination of choice for foreign students seeking higher education. However, the explosive growth in recent years is no happy accident. The rapid arrival of international students in the U.S. is coincident with the Great Recession, when public and private coffers tightened dramatically.

International students have essentially functioned as the bailout for U.S. colleges and universities.

Investment in higher education from state and local governments dropped to a low point in 2012 ($71.9 billion). Since then, state and local government investment has grown to $91 billion in 2015, but that’s still below pre-recession levels. Meanwhile, as a result of declining investments since 2008, tuition and fees at both two-year and four-year public institutions rose 28 percent.

Between 2008 and 2015, international students have essentially functioned as the bailout for U.S. colleges and universities. This is largely because foreign students often pay two to three times the tuition and fees of domestic students, which helps compensate for declining subsidies and smaller budgets. Furthermore, most of these international students don’t require any financial assistance from U.S. colleges. Around 72 percent of them receive the majority of their funds from personal and family income, as well as assistance from their home country governments or universities.

This trend is seen across U.S. college campuses. International students at Idaho State University, for instance, pay more than $20,000 a year in tuition, around 2.5 times more than what in-state students pay. At Purdue University in Indiana, the tuition paid by international undergraduates amounts to almost half of all new revenue it has raised through tuition since 2007. At Oregon State University, where state subsidies per full-time college student dropped 45 percent in the past five years, the international student population now exceeds 3,000 (up from 988 in 2008). This allowed them to add 300 tenure-track professors and expand enrollment to approximately 29,000 students.

In addition to addressing higher education budget woes and enrollment issues, international students are also filling the STEM gap in the labor market.

Once on campus, around 40 percent of international students end up studying fields related to science, technology, engineering and mathematics (STEM), creating a solid pipeline of talent for jobs in the U.S. technology sector. As recent research shows, immigrants already contribute heavily to the U.S. tech industry, having started more than half (44 of 87) of America’s startup companies valued at $1 billion dollars or more (“unicorns”). Specifically, nearly one-quarter of U.S. unicorns had a founder who first came to America as an international student, which shows their path to success often begins on U.S. college campuses.

Thus, in addition to addressing higher education budget woes and enrollment issues, international students are also filling the STEM gap in the labor market. To retain its historical preeminence, the U.S. will need to produce approximately 1 million more STEM professionals beyond the current rate over the next decade, according to the President’s Council of Advisors on Science and Technology. Currently, there are 478,815 international students studying STEM topics.

Colleges and tech companies may view international students as a win-win situation, but that’s not to say the transition is easy. Tensions between U.S. students and international ones from Kuwait and Saudi Arabia at Idaho State University escalated this year to the point of the Kuwait education ministry threatening to pull scholarships following reports of discrimination and hate crimes. In 2012, the Chinese Students and Scholars Association at Purdue University organized a protest on campus following fee hikes targeted at international students, with signs that read “We are not cash cows!” A recent Wall Street Journal analysis of dozens of large public universities revealed that in the 2014-2015 academic year, there were 5.1 reports of alleged cheating for every 100 international students.

International students are fundamentally transforming U.S. higher education, but as recent events demonstrate, these young people are not here to simply foot the bill and silently create economic benefits to the U.S. economy. As the country gains more and more students (and eventual workers) from abroad, there are big questions around how institutions need to accommodate these populations and ease the growing pains, from student relations to housing to classrooms and syllabi to student bank accounts and credit cards to work visas.

Accommodating these students early on will also have an impact on where they land their first jobs out of school. Tech companies recruiting from the influx of international students who are specializing in STEM fields would do well to understand these students’ needs, desires and values — beyond what the typical American grad has presented to the job market. Immigrants may be powering the tech industry as it stands, but we are miles away from truly harnessing their ideas and innovations at scale.