How much international students matter to the economy

Summary

Podcast Summary: "How Much International Students Matter to the Economy"

The Indicator from Planet Money by NPR, hosted by Darren Woods, delves into the significant role international students play in the U.S. economy. In the May 1, 2025 episode titled "How Much International Students Matter to the Economy," Woods is joined by business journalist Talib Visram to explore the ramifications of the Trump administration's policies on international students and the broader economic implications.

1. Introduction to the Issue

Darren Woods opens the episode by introducing Talib Visram to discuss the critical topic of international students in the U.S. economic landscape.

Darren Woods [00:20]:

"Today you're here to talk about international students, right?"

Talib Visram [00:24]:

"As you know, since March the Trump administration has been revoking visas from foreign students across the country. From the biggest state schools systems to tiny community colleges."

2. Trump Administration's Crackdown on International Students

Visram outlines the Trump administration's aggressive stance on international students, initially targeting those with perceived pro-Palestinian activism and later expanding to include students with minor legal infractions.

Darren Woods [00:34]:

"They started targeting students with perceived links to pro Palestinian activism. It's since expanded to include some students with minor infractions with the law."

Universities are responding by advising students against traveling abroad due to increasing visa issues at borders, creating an atmosphere of uncertainty and fear among the international student community.

3. Personal Story: Valentina's Experience

The episode highlights the personal toll of these policies through the story of Valentina Tardunho Poleo, a Venezuelan PhD student at NYU, who is relocating to Oxford University to escape the unstable environment.

Valentina Tardunho Poleo [01:10]:

"A PhD is a very long commitment. So I had this idea in my head this is where I'm going to be for the next five, six, seven, who knows how many years."

Valentina's decision to self-deport underscores the broader impact of policy changes on individual lives and academic pursuits.

Talib Visram [01:30]:

"She's choosing essentially to self deport. She feels it's best for her own safety given the current climate."

4. Economic Impact of International Students

International students constitute approximately 6% of the higher education population in the U.S., contributing a staggering $44 billion to the economy and supporting nearly 400,000 American jobs in the last academic year alone.

Darren Woods [02:59]:

"There are a million or so international students in the US... last school year they contributed $44 billion to the US economy and created and supported close to 400,000 American jobs."

International students are considered an "export" because they pay for U.S. educational services with foreign currency, significantly benefiting local economies across the country.

5. Universities' Dependence on International Students

International students often pay full tuition and living expenses, which serve as a substantial revenue source for universities. For instance, New York University has seen its international student enrollment surge by 250% over the past decade, with tuition contributing approximately 12% of total revenue for public universities.

Barnett Sherman [03:55]:

"They [international students] actually could be viewed to some degree as a subsidy to US students... international student provides a great opportunity for schools to bolster up and improve their revenues and improve their course offerings."

This reliance became particularly evident during the 2008 recession when universities like Michigan State University increased international enrollment to compensate for declining domestic student numbers.

6. Decline in International Student Enrollment

However, the Trump administration's restrictive policies have jeopardized this reliable funding source. Between January and March of the current year, there was a 38% drop in interest for master's and PhD programs in the U.S., according to Study Portals.

Talib Visram [05:07]:

"One study showed that some public schools used foreign recruitment to weather the 2008 recession... But now that usually reliable source of funding might be in jeopardy."

The American Council on Education attributes this decline to the administration's targeting of students advocating for Palestinian rights and the revocation of visas for minor infractions.

Talib Visram [05:38]:

"After he entered office, DHS and the State Department started singling out students speaking in favor of Palestinian rights."

7. Alternatives for International Students

Faced with increasing restrictions in the U.S., international students are exploring alternative destinations such as Canada, Australia, the UK, and increasingly affordable options in other countries. These nations offer robust educational opportunities without the looming threat of visa revocations.

Barnett Sherman [08:35]:

"There are a lot of US Students that are looking abroad and saying, gee, why should I go into debt when I can go overseas and get a great education."

Moreover, these countries are not subjected to the same level of government interference in academic freedom, making them more attractive to aspiring scholars.

8. Conclusion: Broader Implications

The crackdown on international students not only affects individuals like Valentina but also poses a significant threat to the U.S. higher education system and its economic contributions. The potential "brain drain" extends beyond students to include professors and scientists, exacerbating the challenges faced by U.S. institutions in maintaining their competitive edge globally.

Darren Woods [07:08]:

"This is all unsettling for students like Valentyna."

Talib Visram [09:17]:

"For Valentina, starting a new chapter in the UK outweighed the hassles of staying."

The episode concludes by highlighting the complexity and far-reaching consequences of restrictive immigration policies on the academic and economic fabric of the United States.

Darren Woods [10:07]:

"Tomorrow on the show, we're going to dig more into the brain drain, and not just from students, but also professors and scientists."

Key Takeaways

• Economic Contribution: International students are a vital economic asset, contributing billions to the U.S. economy and supporting hundreds of thousands of jobs.

• Revenue for Universities: They provide essential revenue streams for universities, enabling institutions to enhance their offerings and maintain financial stability.

• Policy Impact: Restrictive immigration policies have led to a significant decline in international student enrollment, threatening both economic benefits and academic excellence.

• Global Competition: As other countries bolster their educational offerings, the U.S. risks losing its position as a premier destination for international scholars.

• Personal Stories Matter: The experiences of students like Valentina illustrate the human cost of policy changes, emphasizing the need for balanced immigration approaches that consider both security and economic vitality.

This episode underscores the critical role that international students play in the U.S. economy and the importance of inclusive policies that support global academic collaboration and economic growth.

Transcript

[NPR]

NPR.

[Darren Woods]

This is the Indicator from Planet Money. I'm Darren woods and today I'm joined by business journalist Talib Visram. Welcome.

[Talib Visram]

Thanks so much for having me.

[Darren Woods]

And today you're here to talk about international students, right?

[Talib Visram]

As you know, since March the Trump administration has been revoking visas from foreign students across the country. From the biggest state schools systems to tiny community colleges.

[Darren Woods]

They started targeting students with perceived links to pro Palestinian activism. It's since expanded to include some students with minor infractions with the law. Some universities are advising students not to travel out of the country because of issues some visa holders have had at the border.

[Talib Visram]

All of this is leading to panic among some foreign born students who are now searching for escape routes. Like Valentina Tardunho Poleo. She's from Venezuela and is three years into a physics PhD at NYU, but she's relocating to Oxford University this summer.

[Valentina Tardunho Poleo]

A PhD is a very long commitment. So I had this idea in my head this is where I'm going to be for the next five, six, seven, who knows how many years. I got a cat. I was never planning on moving a cat to the uk.

[Talib Visram]

She's choosing essentially to self deport. She feels it's best for her own safety given the current climate.

[Darren Woods]

Other current and prospective students are also shopping elsewhere.

[Talib Visram]

So what happens if a new generation of bright eyed scholars decide to forgo school in the US and take their dollars elsewhere?

[Darren Woods]

Today on the indicator the economic impact of Trump's crackdown on international students.

[NPR]

Support for NPR and the following message come from Edward Jones what does it mean to live a rich life? Maybe it's full of brave first leaps, tearful goodbyes and everything in between. And with over a hundred years of experience, your Edward Jones financial advisor can help. Edward Jones Member SIPC this message comes from Discover. Are you still quoting 30 year old movies? Have you said cool beans in the last 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card Based on the February 2024 Nielsen report, this message comes from Capital One with the Capital One Saver card. Earn unlimited 3% cash back on dining and entertainment. Capital One what's in your wallet? Terms apply [e-mail] at any given year.

[Darren Woods]

There are a million or so international students in the US that's about 6% of the higher ed student population. But last school year they contributed $44 billion to the US economy and created and supported close to 400,000American jobs.

[Talib Visram]

International students coming into the country are considered an export. That's because they purchase an American service education and generate revenue for the US with foreign currency.

[Darren Woods]

And the US has a surplus in the sector because foreigners buy education at a much higher rate from the US than vice versa.

[Talib Visram]

They're coming with loaded wallets because they have to prove they have the money to sustain themselves, usually without work or financial aid. So for a number of years, they're boosting local economies in all corners of the country. Barnett Sherman is a professor of multinational finance and trade at Boston University.

[Barnett Sherman]

I was looking at Mankato, Minnesota, 45,000 people south of Minneapolis. It hosts the Minnesota State University campus. They had about 1,700 international students calling Mankato their home. Those students brought $45 million into that community.

[Darren Woods]

Foreign students generally pay full whack on tuition and living expenses. And it turns out that New York University hosts the most. Its international Student enrolment surged 250% over the last decade. Tuition for a four year degree there is around $260,000. These fees are a big source of income for colleges across the country. One recent estimate says it accounts for an average of 12% of total tuition for public universities.

[Barnett Sherman]

It actually could be viewed to some degree as a subsidy to US students. It's certainly a benefit to the schools because the enrollment has been declining in U.S. institutions for the last 10 years. It's down over 2 million students, U.S. domestic students. So the international student provides a great opportunity for schools to bolster up and improve their revenues and improve their course offerings.

[Talib Visram]

It's true. One study showed that some public schools used foreign recruitment to weather the 2008 recession. For several years, Michigan State University increased international enrollment by a factor of six.

[Darren Woods]

But now that usually reliable source of funding might be in jeopardy. Just between January and March this year, interest in master's and PhD study in the US dropped 38%. That's according to Study Portals, which gathers research about study programs around the world.

[Talib Visram]

The non profit American Council on Education, or ace, suggests that it may have something to do with Trump's policies. After he entered office, DHS and the State Department started singling out students speaking in favor of Palestinian rights. This was Marco Rubio back in March. Every time I find one of these lunatics, I take away their visa.

[NPR]

You're saying it could be more than 300 people at some point, I hope.

[Talib Visram]

We run out because we've gotten rid of all of them, but we're looking every day.

[Darren Woods]

That includes at least a few cases for crimes like drunk driving. But other reasons are even hazier.

[Talib Visram]

They're cancelling visas for years old infractions like speeding, staying in parks after hours, and even catching more fish than is permitted with a fishing license.

[Darren Woods]

After a ton of lawsuits, on April 25, the Trump administration temporarily restored legal status for some students, saying it is working on a new policy for determining their legal right to study in the US but it doesn't cover them all and it doesn't eliminate uncertainty. Further, Immigration and Customs Enforcement explicitly said that it is actively formulating a new framework for terminations. They're not done with this. We reached out to the State Department, who told us that along with the Department of Homeland Security, it enforces zero tolerance for aliens in the United States who violate our laws, threaten public safety, or in, quote, other situations where warranted. But this is all unsettling for students like Valentyna.

[Talib Visram]

Quick note. For all intents and purposes, Valentina is an international student, but she's on Temporary Protected Status, or tps, a category for people facing political unrest in their home countries. Trump tried to take Venezuelans off the list, and though the courts paused that, Valentina does not feel that her status here is safe. So she made the decision to leave.

[Valentina Tardunho Poleo]

All of my friends are here. I have an apartment that I love, roommates that I love. My close family is all in the U.S. once I leave, I'm probably not going to be allowed to come back for who knows how many years.

[Talib Visram]

As a PhD student in the sciences, Valentina does receive fellowship funding, so does not pay tuition, but she is contributing to the economy and is having her life uprooted.

[Darren Woods]

Nonetheless, she's glad she planned ahead with the move to Oxford University, because she says she feels even more unsafe in the U.S. now, after more than 200 Venezuelans with alleged but tenuous ties to gangs have been sent to the hellish Seacot prison in El Salvador.

[Valentina Tardunho Poleo]

The plan is to leave in June, but I kind of have everything packed. So if at a moment's notice I had to leave, I'm ready to go.

[Talib Visram]

Whenever foreign students do have options. Most come from India and China, and those countries are growing their own education offerings. Canada, Australia and the UK are strong, traditional alternatives, and other super affordable options are attractive.

[Barnett Sherman]

There are a lot of US Students that are looking abroad and saying, gee, why should I go into debt when I can go overseas and get a great education.

[Darren Woods]

Also, those foreign colleges aren't dealing with threatened freezes on funding if they don't bow down to the government's demands, which is happening in the U.S. for example.

[Talib Visram]

One of the many stipulations for releasing funds to Harvard is that it stops admitting international students hostile to the values inscribed in the U.S. constitution and Declaration of Independence, whatever that means.

[Darren Woods]

So overall, students are getting a raw deal for the massive cheques they're writing, no guarantees on research funding, freedom of speech, or even being let into the country.

[Talib Visram]

For Valentina, starting a new chapter in the UK outweighed the hassles of staying. And there was one more thing I just had to ask her about that transatlantic cat move.

[Valentina Tardunho Poleo]

Um, do you have two hours? So apparently the UK has no rabies. If you want to move a cat, you can't fly with it. You have to ship it like a package, and that's like £4,000 or so. So a friend is going to fly my cat to Paris and then I'm going to drive from London to Paris, pick it up, go to Calais, take a ferry, and then drive back. So I wouldn't recommend that.

[Darren Woods]

So it turns out moving where you study is a bit like herding cats.

[Talib Visram]

Who would have thought? So much hassle.

[Darren Woods]

Well, thanks so much for joining us, Dalib.

[Talib Visram]

Appreciate you having me here.

[Darren Woods]

By the way, tomorrow on the show, we're going to dig more into the brain drain, and not just from students, but also professors and scientists. We're seeing data that scientists and researchers appear to be fleeing overseas amid cuts to research grants and border issues. This episode was produced by Cooper Katz McKim, with engineering by Jimmy Keeley and Harry Paul. It was fact checked by Sarah Juarez. Cake and Cannon is the show's editor, and the indicator is a production event.

[NPR]

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