A Big Trade Surplus in Higher Education: What Chinese Students Give to the U.S.

An increasing number of international students pouring into the United States for higher education contribute not only to campus life and to dialogue within classrooms, but also to the U.S. economy at the local, state and national levels. During the 2010-2011 academic year, international students and their dependents contributed approximately $20.2 billion to the U.S economy, according to an economic analysis by NAFSA: Association of International Educators.

According to the Institute of International Education (IIE) statistics, the majority of international students studying in the USA come from Asia, with China and India ranking first and second, respectively. China’s ascent to the top spot is a recent phenomenon. Its year-over-year increase of 30 percent helped it overtake India in 2009.

That is generally good news for a slumping U.S. economy. The U.S. Department of Commerce reports higher education is among the country’s top service sector exports, as foreign students provide considerable revenue not only to the host campuses but to local economies of the host states for living expenses, including room and board, books and supplies, transportation, health insurance and support for accompanying family members.

“International students contribute financially not only to U.S. academic institutions, but also to the local communities in which they live,” said Rachel Banks, director of public policy at NAFSA. “Their contributions also help support programming and services on campus that benefit all students,” she added, “and support local businesses in the community through such expenses as rent, transportation, groceries, etc.”

There’s no denying that colleges like international students because they’re a good source of revenue. Unlike domestic students, international students, especially those at undergraduate level, have little, if any, financial aid. That means they pay almost 100 percent of tuition and fees.

As the NAFSA report shows, among graduate international students, 49 percent relied primarily on personal and family funds, but for undergraduate international students, the percentage climbed to 81 percent, which makes their larger numbers a potential boon for U.S. colleges.

The University of Southern California (USC) this year welcomed the most diverse student body in its 132-year history, and has 3,338 Chinese students, making it the top U.S. institution that hosts international students.

Timothy Brunold, dean of admissions at USC, said that USC saw a rapid rise of Chinese students especially during the past three to five years, and despite the gunshot that killed two Chinese students of USC this April, the number of Chinese students still increased 825.

Xu Zhong, a Chinese student who has just embarked on the master’s journey in computer science, said he was excited about studying at USC.

“I am sorry for the gunshot, but you can’t reject the opportunity of studying in such a prominent school just for something negative,” Zhong said.

After living in Los Angeles for a few months, however, Zhong began to complain about this “expensive city.” He has already paid about $19,000 for tuition and fees for this semester, but has to spend around $1,000 per month on living expenses.

“I live around the campus, where rent is much higher than that in downtown area,” he said. “And expense of entertainment is higher in that LA is a large city.”

But not a problem for some wealthy Chinese students.

“I know a few Chinese students here who spend a lot of money every day,” Zhong said, “ They purchase luxuries, have meals at top grade restaurants, and go to bars…”

Seeing China a huge potential market, however, Brunold said USC does not have any recruiting adjustments that target Chinese students.

“We don’t have any special programs that are exclusive for Chinese students,” he said, “We have sent representatives to China to reach out Chinese students, but we’ve also sent them to other countries as well. So for us, every international student is the same.”

Harvey Charles, vice provost for international education at Northern Arizona University told the Slate that many institutions have seen the international students as a source of revenue. “An increasing number of colleges view them as cash cows but don’t have the requisite infrastructure in place to support them,” Charles said, “That would be a recipe for disaster.”

While acknowledging the economic contribution Chinese students have made, Brunold denied the idea of describing them as a “cash cow.”

“The flood of Chinese students do have a large impact on the State’ economy. In 2011, international students contributed almost $3 billion to California. But our motivation is not money, but building a global community,” Brunold said, “At USC, everyone pays the same tuition, so there’s no difference for that. Chinese students bring money to USC, but more importantly, they bring varied views and perspectives to the classrooms. I think that’s what we really value.”

Brunold said USC has always had a positive impression on Chinese students. “They usually work hard,” he said. “We have Chinese alumni who are very successful in their career.”

Banks agreed on the indispensible role that foreign students play in the U.S. economy.

“International students from China become leading innovators in our economy, and therefore, contribute to job creation,” she said, “Also, more international students tend to study in so-called STEM fields than U.S. students do; until the U.S. is able to generate a stronger domestic supply of STEM talent, we rely on international talent to fill this need.”