OLIVIA GINGOLD – FEBRUARY 19TH, 2020
EDITORS: LUCIA DARDIS, PARMITA DAS
International students: we go to class with them, we notice their accents, and we learn about new cultures from them. What we do not necessarily notice is how their presence also brings growth to our economy and innovation to our business environment.
In the 2018-2019 academic year, the United States had over one million international students. The top three countries with students studying abroad in the United States were China, India, and South Korea. For many years, international students have been attracted to the quality of education the United States offers, the specialization (particularly in STEM fields), and the welcoming environment of the country.
Since Donald Trump was elected in 2016, however, that welcoming environment has instead become more and more alienating. Throughout the last three years of the President’s term, he has increasingly advocated in favor of unilateralism, closing our borders, creating new international tariffs or raising pre-existing ones, and creating stricter trade deals. International study has not been exempt from this scrutiny. In an era of increasing security threats, particularly from rising powers such as China, international students have been targeted by President Trump as a threat to our national security. As such, scrutiny on students applying for student visas, particularly in critical areas such as engineering, data, and IT, has increased.
The number of visas which have experienced delays has spiked during the Trump era. This is due to the removal of a rule in January 2017 that required U.S. Citizenship and Immigration Services to process student visas within 90 days. Since then, student visa processing time has stagnated, with processing times for Optional Practical Training visas, a type of F-1 student visa, spiking to anywhere between 3.5 to 5.5 months from a previous maximum of 3 months previously.
These visa delays have immediate impacts on students who are not able to begin or continue their studies in the United States. A long term effect also comes into play here. Visa delays have the possibility of discouraging future potential students from applying or matriculating into the United States’ higher education system. One student experiencing a delay in her OPT talked about how her position was a dream for any of her family back home, and then declared that “even if [she doesn’t] really know what the American Dream is at this point, [she suspects] that it’s a scam.” Another student at the top of his class in Mexico chose a Canadian school over an American school because of President Trump.
The United States used to be perceived as a welcoming environment, but these new regulations have made an increasing number of international students wary. Fear that their visas will be delayed or fear that the environment in the United States is now hostile to foreigners both impact international students’ decisions to study abroad. This has been reflected in the number of student visas issued recently. According to a report from Bloomberg, the number of student visas issued between 2016 and 2017 fell by around 250,000.
A negative impact on international perceptions of the United States will have a negative impact on our economy as well. International students’ tuition is considered an export good in the calculation of GDP, so losing tuition will mean a lower GDP. Big, public colleges, like UC Berkeley, which charge higher tuition to international students in order to support programs at lower costs for domestic and in-state students are hurt by this loss of tuition. Worse, there is a disproportionately larger cost on smaller, private schools which don’t simply utilize, but rather rely on international students to keep the school afloat. The University of Kansas is one good example, their campus, which has around 500 international students, saw up to six to eight week delays in their students’ visa applications.
To make matters worse, international students are more intertwined with the economy than just the raw financial numbers imply. According to new data from NAFSA, the Association of International Educators, international students contributed $39 billion to the U.S. economy and supported more than 400,000 jobs during the 2017-2018 academic year. With 1,095,099 international students in America, this means that, on average, for each international student that decides not to study abroad due to these increased regulations, the U.S. economy loses $31,960.58. By observing and extrapolating from the trend of decreasing visa applications, it can be estimated that, between 2015 and 2017, the U.S. economy has lost out on nearly $8,000,000,000. This large figure is because tuition is only one of the many ways international students contribute to the U.S. economy. During their time in America, these students also contribute to the GDP through their consumption of goods and services, from necessities such as food and grocery shopping, health services, and housing, to frivolities like entertainment, clothing, and others. This shows just how big the contributions of international students to our economy are.
Bright international students also become business tycoons. Big company names such as Chobani, the greek yogurt mega-corp, and Tesla, the electric car company that calls the Silicon Valley home, were both founded by people who were once international students exhibiting the robustness that they contribute to our economy, both in the short- and long-term. If the United States continues to discourage international students from studying in the states, this talent will inevitably be recruited by other countries who will then reap the benefits that new business and innovation will bring to their economies in the form of goods, services, and increased labor.
In a world that is perpetually deepening its globalization, the United States’ sudden shift towards unilateralism is inconsistent with the times. The United States’ restrictions on student visas is only one way that this shift inwards is having a negative impact on our economy, our people, and international interests as well. There is fear that this new animosity towards international students will cause the United States to not only miss out on tuition and consumption, but also top international talent. A rising tide may not always lift all boats, but in this case, it seems like it does.
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Disclaimer: The views published in this journal are those of the individual authors or speakers and do not necessarily reflect the position or policy of Berkeley Economic Review staff, the Undergraduate Economics Association, the UC Berkeley Economics Department and faculty, or the University of California, Berkeley in general.