Financial contributions of international students: Contrasting approach of Louisiana & Ohio

Nov 23, 2013

International students contributed $17.7 billion in tuition and fee to the U.S. universities and colleges in fall 2012, resulting in an increase of $5.4 billion in tuition contribution between fall 2008 to fall 2012. Post-recession public higher education systems went through sharp budget cuts. For example, educational appropriations per FTE (full time enrollment) decreased by 23% in five years between 2007-2012. In this scenario, international students have been becoming integral to financial well-being of many institutions, as they can charge high out-of state tuition fee. This out-of-state tuition fee had been increasing at a faster pace than average growth in international student enrollment (blue line), as shown by the steeper slope of increase in Economic Benefit (green shaded area), which includes contributions in the form of tuition and fee.  

However, states are taking different policy approaches to meet their financial goals. Consider the contrasting example of Louisiana and Ohio. While Ohio increased the out-of-state tuition fee at the slowest pace among 50 states (5% in five years), Louisiana increased it with the steepest rate (69% in five years). 

This steep increase in tuition, resulted in slower five-year growth in international student enrollment in Louisiana (24%) as compared to Ohio (37%). Despite slower pace of growth in enrollment, Louisiana was able to get higher tuition total contribution from international students due to steeper increase in tuition fee. In other words, Lousiana chose an option of lesser number of  students paying more out-of-state tuition as compared to Ohio which kept its tuition fee low to attract larger number of international students. 



With the improvement in the economic environment in the US, budget appropriations are in slight recovery mode, however, they are far from the pre-recession level. Thus, international students will continue to be important for financial contributions to the US universities in general and public higher education in specific. 

In addition, some institutions and states are becoming increasingly over-dependent on few source countries. For example, Chinese form 41% of international student enrollment in Ohio as compared to 29% in the US. This increasing dependence on international students for financial contributions and with concentration by few countries shows that state policymakers and higher education institutional leaders need to be creative, strategic and proactive in attracting international students from a diverse set of source countries. It will require planning and some tough strategic choices. 

Dr. Rahul Choudaha
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