Global Cities Initiative – Foreign students in America

Foreign students from large, fast-growing cities in emerging markets who are enrolled in universities and colleges in the United States contribute significant financial and social benefits and skills to their new metropolitan destinations, according to the Global Cities Initiative, a groundbreaking joint project of the Brookings Institution and JPMorgan Chase.

The project’s report, The Geography of Foreign Students in US Higher Education: Origins and destinations, highlights how foreign students bring millions of dollars each year to local economies.

It estimates that between 2008 and 2012, foreign students contributed US$21.8 billion in tuition fees and U$12.8 billion in living costs to 118 metro areas that are each home to more than 1,500 students.

The report urges American metropolitan leaders to capitalise on students’ connections to fast-growing foreign markets, to increase jobs and investment.

“With knowledge of both markets, foreign students can be valuable assets to local business communities that are seeking to expand globally, and the wider metropolitan economies in which they sit,” says the report released on 29 August in Washington DC.

Using a database on foreign student visa approvals from 2001 to 2012, the researchers found that the number of international students on F-1 visas in US colleges and universities grew dramatically from 123,000 to 550,000. The F-1 is the most common visa issued to foreigners studying in a full-time academic programme in the United States.

According to Neil Ruiz, principal researcher of the report, the sharpest increases occurred among students from emerging economies such as China and Saudi Arabia.

Sending metropoles

Investigating the geographical profile of foreign students in America, the researchers found that between 2008 and 2012, more than 575,000 students were from 94 cities in emerging economies.

“We noted the metropolitan environment was an important feature not only of where foreign students locate in the United States, but also of where they originate worldwide,” said Ruiz who is an associate fellow at the Brookings Institution’s metropolitan policy programme.

Seoul, the capital of South Korea, is the largest source city for foreign students in the United States, having sent 56,500 students during 2008-12. It is estimated that those students spent US$1.3 billion in tuition fees and US$781 million in living costs.

Other Asian cities that dominated the list of largest home markets for US foreign students during the period were Beijing (50,000), Shanghai (29,000), Hyderabad (26,000), Riyadh (17,400) and Mumbai (17,300). They were closely followed by Taipei (17,000), Hong Kong (12,400) and Kathmandu.

Among oriental mega cities sending students to America, Kathmandu was an exception: despite a population of just 700,000 million, the modest Nepalese capital sent 10,700 students during the five-year period.

Destination metropoles

In close scrutiny of destinations of foreign students, the researchers unsurprisingly noted heavy clusters in metropolitan areas with high concentrations of colleges and universities.

The top metropolitans of destination for foreign students studying for bachelor, masters and doctoral degrees included the New York metropolitan area, which hosted more than 100,000 students, accounting for about 10% of all F-1 visa approvals in the United States.

From 2008-12, other cities that welcomed more than 20,000 foreign students included Los Angeles, Boston, San Francisco, Washington, Chicago, Dallas and Philadelphia.

High foreign student intensity was also recorded in San Jose, Miami, Atlanta, Houston and San Diego, with each of those metros hosting more than 15,000 students.

With 285,000 foreign students entering on F-1 visas from 2008-12, China is the source of the largest number of international students in the United States. According to the Institute of International Education, during the 2012-13 academic year, China contributed 29% of foreign students in the United States.

“Most of those students found their way to Purdue University, University of Illinois, Michigan State University, University of Southern California and Ohio State University, which are the top higher education destinations for Chinese students,” said Ruiz.

A similar trend was noted among students from Seoul, who sought admission in large numbers at the University of Illinois, Indiana University, New York University, the University of Southern California and City University of New York.

Fields of study

The flow of international students into the United States is driven by the need to study science, technology, engineering and mathematics – STEM – disciplines and business courses.

“Over two-thirds of foreign students are studying STEM and business, compared to 48% of US students,” said the Brookings Institution in a statement made available to University World News.

The Indian city of Hyderabad is the top source of STEM foreign students, with most of its students studying engineering, computer science, technology and mathematics in leading universities and colleges in different metro areas of the United States.

Other Indian cities that send large numbers of students to study STEM disciplines include Chennai, Pune and Bangalore, which are emerging hubs of information technology.

Taking into account that job openings in STEM fields are deemed difficult to fill locally in the United States, about 45% of foreign graduates have been extending their visas to work in the same metropolitan area as their college or university.

Many metro areas have been retaining high proportions of foreign graduates under federal government-approved temporary optional practical training programmes.

Currently, the optional practical training programme can authorise foreign students on F-1 visas to work for 12 to 29 months after they graduate from a tertiary institution in the US. During 2008-12, an average of 75,000 positions were granted each year to foreign students receiving bachelor, masters or doctoral degrees.

The number of such positions seems to be increasing: as of November last year, there were about 100,000 F-1 visa students in optional practical training programmes.

Growing economic force

The emerging evidence is that while foreign students are benefitting from such arrangements, they are also increasingly becoming a growing economic force with huge potential for investment and job creation.

According to Dr Allan Goodman, president of the Institute of International Education, the importance of foreign students is likely to increase, as some provide economic benefits by serving as bridges back to their home cities and offering valuable skills to employers in their metropolitan destinations in the United States.

“Towards this goal, international education creates positive economic and social impact for communities in the United States and around the world,” said Goodman in a statement.

But few local leaders in the United States appreciate that students from fast-growing economies could be of value in facilitating opening of new markets and other business opportunities abroad.

The Brookings report offers a two-pronged approach to help metropolitan leaders realise the full benefit of foreign students’ local presence.

According to Ruiz, the crux is to map out how to influence foreign student connections with their home communities abroad to facilitate and deepen economic exchange.

“Foreign students can offer valuable knowledge of the business, cultural and societal norms of their countries of origin and serve as a bridge to globalise local economies,” said Ruiz.

Retention recommended

Researchers at Brookings also advise policy-makers in government and industry to rejuvenate the retention of foreign student skills by developing programmes that connect foreign graduates to employers located within adjacent metropolitan areas.

However, labour experts are divided as to whether local employers should be aggressively encouraged to obtain the necessary visas for foreign students with in-demand skills.

According to the report, one school of thought maintains that there are enough native-born workers to perform high-skilled jobs and that employers are taking advantage of the visa system and using foreign labour for its low cost and exploitability.

“Allowing foreign students to enter the labour market would effectively depress wages for US workers,” says George Borjas, a professor of economics and social policy at Harvard’s Kennedy School.

The second school of thought calls for immigration reforms that would make visas available for graduates who would like to stay in the United States.

Fronted by the Global Cities Initiative, the group argues that in order for US business to tap international markets, there is a need to expand its reach and foreign students can help to open markets and facilitate trade, foreign direct investment and knowledge transfer.

But no matter which side one is on, the United States is indisputably the leading global hub for higher education and training. In the last academic year, the country hosted 819,644 international students who represented 21% of all students studying abroad worldwide.

But while American universities, global networks of students and professionals and high-level research and innovation activities combine to attract many students each year, most US cities and their leaders are yet to map out a clear strategy on how to use foreign students to reap further business and economic benefits.