Though higher-education services are a major U.S. export and a key source of domestic innovation and economic growth, this key sector is often lost in debates about trade and the current account balance. But with foreign enrollment in U.S. universities now declining in the age of Donald Trump, Americans should not be surprised if their own tuition bills go up.
America’s high-quality universities are among the key sources of its greatness. Every year, top students from all over the world vie for access to graduate and undergraduate programs in the USA, and American universities occupy most of the top spots in global rankings. Moreover, the basic research conducted at U.S. universities has been a primary driver of innovation and economic growth, as well as the source of a disproportionate share of Nobel prizes.
America’s universities cater to a wide variety of students, researchers, and other economic actors. The top research universities attract not just the best and the brightest students, but also clusters of high-tech companies, such as those in Silicon Valley and Boston. At the same time, public and private universities across the country offer excellent programs for four-year degrees. Community colleges provide vocational training as well as a pathway to a four-year degree for countless other high-school graduates.
Foreign students’ attendance at U.S. universities confers many advantages. For starters, these students usually pay full tuition rates (especially at the undergraduate level), which allows universities to allocate more financial aid for Americans who need it. At the graduate level, more than half of those enrolled in computer-science and engineering programs are foreign-born and could remain in the USA to work. Without them, America’s high-tech companies would face an even greater talent shortage than they already do.
Finally, the presence of foreign students enriches the university experience for Americans themselves. As an added bonus, many foreign students return home as staunch supporters of America, and can influence their country’s foreign-policy positions accordingly.
For all of his complaints about the U.S. trade deficit, Trump is shooting himself in the foot by ordering his administration to tighten visa requirements and thereby undercutting exports of U.S. higher-education services, as well as harming higher education itself.
With other countries attempting to beef up their own universities, the USA should be increasing its efforts to attract foreign students. Doing so would cost the USA nothing, attract the talent its economy needs, and make higher education more affordable for more Americans.
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