Major U.S. Study Showed U.S. Universities Subsidized International Students

Major U.S. Study Showed U.S. Universities Subsidized International Students

This bulletin is a shortened version of a study done by David North for the U.S. Center for Immigration Studies in Washington, D.C. David North was a former Assistant to the U.S. Secretary of Labor, and has been an immigration policy researcher for several decades.


Research on the so-called economic benefits of International Students in Canada has never been done. Yet Canada’s universities continue to recruit large numbers of International Students and to boast about the economic benefits of such students to universities. In addition, Canada’s Immigration Minister has recently stated that Canada is looking for more International students. In doing so, he joins the universities in showing that there is an urgent need for some important research to be done in Canada on the “economic benefits” issue.


Who Pays? Foreign Students Do Not Help with the Balance of Payments

By David North,

It has been argued for years that foreign students contribute to America’s balance of payments because of money they bring with them from abroad. A careful analysis shows that such arguments are false because of three fundamental flaws: 1. The calculations ignore the massive, partially hidden subsidies to higher education coming from American tax dollars and endowment funds; 2. The calculations supporting the balance-of-payments argument use highly questionable data-collection techniques; and 3. Other, stronger, studies show that foreign students make heavy use of U.S. funds to support their graduate educations.

(1) The U.S. had 582,984 international students in the 2006-2007 academic year or 3.9 percent of the universities’ total enrollment.

(2) …most of them are graduate, not undergraduate students; most are here to secure academic credentials that will help them find jobs either in the United States or elsewhere. Thirdly, the …majority of them are from Asia with the largest single groups (again according to Open Doors 2007) coming from India 83, 833 and China (including Hong Kong) 75,445.

(3) …most graduate students (both domestic and foreign) are both workers (on campus) and students; they are usually employed…at least during the school year. One of the principal impacts of the large numbers of foreign graduate students I concluded after an extensive study for the Alfred P. Sloan Foundation, was that they had made a profound impact on the labor market of America’s graduate schools, loosening it and thus tending indirectly to undermine a motive for the recruitment of American women and minorities by these graduate schools. Further, their presence resulted in the lowering of the wages for everyone enrolled in them. America’s security interests may not be helped by the extensive admission of overseas people studying highly technical matters….

(4) The Institute of International Education (IIE) claimed that international students contributed $14.5 billion to the U.S. economy in 2006/2007. IIE relies on an annual survey of foreign student advisers at American universities and colleges. It asks… what is the primary source of funds used by these students? The advisers then make a campus-wide estimate of the primary sources to arrive at a figure (like the $14.5 Billion). (In 2006-07, the IEE claimed that each international student contributed $24,382 to the U.S.)

(5) Is there a better data source on this question of who pays for the education of foreign students? Yes. It is a continuing study handled conservatively and funded by six major government agencies: the National Science Foundation, the National Institutes of Health, the National Endowment for the Humanities, the U.S. Department of Education, the U.S. Department of Agriculture, and the National Aeronautics and Space Administration. It does not deal with all international students, but it does work with those getting doctoral degrees ­ and PhD candidates are probably the majority of foreign students.The annual study is called Doctoral Recipients from United States Universities; Summary Report; it is based on a survey of everyone receiving a PhD in a given year. My impression is that one does not actually obtain the degree without completing the survey; this does not guarantee 100 percent replies to all questions, but it does produce a lot of completed survey instruments.

(6) The study (is) run by the well-regarded National Opinion Research Center in Chicago (and) asks the same question that IIE asks: What is the primary source of financial support for the PhD recipients? But there is a major difference. It asks the doctoral recipients directly. It is first-hand data not the second-hand group-estimate data that IIE has on this point.

(7) The National Academy of Sciences estimates that U.S. Universities and Foundations contribute $37,234 to every international student. While the extent of support for non-doctoral students is presumably lower, these estimates from a highly reliable source indicate that the IIE’s alleged $24,872 per head contribution from overseas sources is totally overshadowed by the $37, 234 average support provided (by U.S. sources).

(8) U.S. citizens say that the primary source of their funding, in 30.0 percent of the cases, came from their own resources. Comparable findings were 15.9 percent for permanent resident aliens (greencard holders), and only 5.3 percent for those with temporary visas. (In contrast, The IIE estimated 55.2 percent of the international student doctoral candidates said their primary source of funding was their own resources.)

(9) This is a remarkable difference and over the years might have been expected to shake up IIE. (as well as universities, governments and media who make such claims).


David North conducted his own study on a sampling of 87 graduate students. He asked two questions : What percentage of your income, …Graduate Student, came from overseas, and what percentage came from U.S. sources? His findings were very similar to those of the National Council of Sciences. He found that 10.4 percent of the students’ incomes came from overseas, and the rest from U.S. sources. In other words, they relied heavily on U.S. funding.

‘In the course of my interviews with the 87 foreign students I asked a question about their family’s finances in 78 cases : Did they own a car? These were the responses: a majority of the parents of the people I interviewed did not even have an automobile.” He found it hard to accept the IEE estimate that on average international students bring $24 ,872 from overseas ­ every year ­ when a majority of the parents of the students he interviewed could not even afford an automobile.

He concludes : “It is more than slightly ironic that the other annual publication of the IIE is entitled ‘ Funding for United States Study: A Guide for International Students and Professionals.’ It is a how-to book, as its introduction states “designed to be a descriptive guide to financial assistance for prospective international students interested in studying or doing research in the United States.”

Case Closed !!!