Welcome back! I hope you had a fun-filled and safe July 4th holiday weekend. This week, I dig into how declines in international student enrollment will impact domestic students and institutional financial models. Then we close with three Sparks about professional degrees, faculty workload, and one institution’s AI kitchen.  

Hidden Subsidies 

From As international enrollment falls, U.S. students face program cuts and higher prices | The Hechinger Report 

As new federal data show international enrollment still falling, Jon Marcus looks at how that impacts domestic students.  

Our Thoughts  

Okay, you might be thinking, “Why are you writing about international enrollment again? Didn’t you already cover everything there is to say about this in some previous issues?” Yes, back in Issue 71, I discussed the potential impacts of the Trump administration’s policies on international enrollment. Then, in Issue 98, I talked about the impacts of falling international student enrollment on the local economy. However, now we’ve come full circle as international enrollment has fallen, and institutions, students, and families are starting to feel the real impact of this decline.  

If you don’t work in enrollment management or international student services at your institution, you may not have previously given international student enrollment much thought. In fact, most families probably consider international student enrollment as simply a part of the American higher education experience. But here’s the secret most don’t realize—almost all international students, especially at the undergraduate level, pay full tuition. Their tuition is not subsidized by state or federal financial aid or institutional grants, and their ability to pay full tuition has been quietly subsidizing domestic students, both in keeping the price down and funding services that all students use. According to a study from 2016, while international student enrollment may only account for 6 percent of total enrollment, it accounts for upwards of 12 percent of tuition revenue. Given the increase in international student enrollment over the past decade, that number is likely higher today.  

So, how did institutions become this dependent on international tuition in the first place? It wasn't an accident. It also wasn't greed. Instead, for the better part of two decades, public colleges have been responding to a problem partially created by the states. Domestic enrollment has fallen by roughly two million students since 2010, and state appropriations continued to shrink. Institutions needed to find additional revenue somewhere, and raising the price on domestic families who were already stretched wasn't a realistic option. International students who could pay full tuition were. A separate study found that for every 10 percent cut in state appropriations, public research universities recruited about 16 percent more international students. Institutions were replacing lost public funding with international tuition, more or less in step with how much the states pulled back. 

And for a long time, this strategy worked well. International student tuition dollars helped keep costs down for domestic students and paid for services or facilities that all students benefited from. Additionally, we find that international students weren’t taking seats from domestic students, a point even more true today as enrollment is down, and institutions have seats they desperately want to fill. There's nothing scandalous about charging students who can afford full tuition in order to discount the students who can't. For an institution that depends on tuition to operate, it's a reasonable approach and one that worked until 2025. However, the challenge is that this international student subsidy was hidden from most domestic students and their families.  

For the students who do stay enrolled, the cost is going up. Syracuse, Northwestern, USC, and the New School have all raised tuition for the coming year, pushing the total cost of attendance to somewhere between roughly $93,000 and $103,000. Here's what bothers me about this, though. When Jon Marcus asked these institutions how much of their tuition increases were tied to the drop in international enrollment, none of them would answer. The cross-subsidy was invisible to families while it was working, and now that it's falling apart, institutions still won't be straight about it. Families are paying more and choosing from a shorter list of programs, and no one will tell them whether the two are connected. All of this is happening at a time when two-thirds of Americans already question whether a four-year degree is worth the cost. 

If you want a sense of where this is headed, look at Canada. It would be easy to treat what's happening in the U.S. as a purely political story, something the Trump administration did to higher education, and the visa policies are certainly the immediate cause here. But Canada ended up in the same place for entirely different reasons. In 2024, Canada capped international student permits to address housing shortages and immigration concerns, with no visa crackdown involved. The result was the same as what we're seeing here, only faster and more severe. International enrollment dropped by 73 percent. Universities in Ontario alone are facing $1.5 billion in losses this year, most institutions are planning budget cuts, and at least one college has closed altogether. Alex Usher (as quoted in The Hechinger Report piece), who runs a higher education consultancy in Canada, described the situation more directly than any American administrator has been willing to: institutions were running surpluses on international students and using that money to keep services running for domestic students. He noted that Canadian students are now paying the same tuition but getting less for it. That's roughly where I expect American students to be within a few years at some institutions. 

So, where does that leave us? Perhaps unsurprisingly, it comes back to data. If you work in institutional research or enrollment management, the most useful thing you can do right now is build a realistic model of your institution's exposure. How much of your net tuition revenue actually depends on international students? Which programs wouldn't break even without them? What would a further 10 or 20 percent decline do to your budget? You can only answer those questions if your enrollment and financial data are clean enough to be connected, which is the same point about data governance I made back in Issue 99. Good strategic budgeting and good institutional data practice really are the same work. Institutions that start this work now will be better prepared for future enrollment shifts that impact the bottom line and better able to transparently explain to students and their families why tuition or services are shifting.  

Sparks 

• ED Issues New List of Professional Degrees After Court Order (Inside Higher Ed) - After a recent federal court decision, the Department of Education released a new list of professional degrees. Sadly, social work and education still didn’t make the cut even though we need more of both in our society. 
• The Faculty Workload Myth (The Chronicle of Higher Education) - Two economics professors at Purdue University discuss how much faculty actually work and the challenges that state government micromanagement create. Too often, I think we misjudge the work of faculty and this piece, supported by data, tries to make their work more transparent.
• Inside a University’s ‘AI Kitchen’ (Inside Higher Ed) - An inside look at Santa Clara University’s weekly workshops about AI for students, faculty, and staff. An interesting look at how one institution is trying to make AI more approachable for its community and offers some ideas worth borrowing.