Economic benefits of international education to the United States

jason1Editor’s note: this guest entry was kindly prepared by Jason Baumgartner (pictured to the right) of Indiana University in the United States. Jason has worked for the Office of International Services at Indiana University since 1999.  He is the lead software developer of the iOffice application suite, which is a comprehensive immigration case management solution to enable staff to proactively assist international students and scholars in maintaining their lawful stay without interruption.  This software is utilized by international offices throughout the Indiana University system and is licensed to other universities throughout the country.  He is a member of NAFSA.  He developed the current algorithm and conducts the annual analysis (since 2000) for the NAFSA Economic Impact of International Students.  He has a Master’s in Information Science from Indiana University.

As regular readers of GlobalHigherEd will notice, this is another in a series of entries (see ’Measuring the economic impact of ‘export education’: insights from New Zealand‘; Making sense of the economic contribution of international students in Australia (up to 2008)) that attempt to shed light on how countries calculate the economic impact (and ‘export earnings’) of foreign students.  I encourage you to read Jason Baumgartner’s entry below for its own sake, but also to begin comparing how the US (and this is really as close to an official view as one could get in the complex US higher education landscape) frames this issue in comparison to other countries, including New Zealand and Australia.

As I’ve noted before, we welcome guest entries on this issue from people studying the issue in any country, be they government officials, academics, consultants, or graduate students.  The issue of understanding the economic impact of foreign students is severely underdeveloped, with little reflection on how different analytical models (and associated assumptions) can generate very different findings.  Our thanks to Jason Baumgartner for his help in moving thinking about this issue forward.   Kris Olds


NAFSA’s annual economic impact statements estimates the amount of money international students bring to the United States to support their education and stay.  For the 2007-2008 academic year it is estimated that international students contributed approximately $15.54 billion to the U.S. economy.   The following graph outlines the growth of this economic impact over the last 30 years:


The economic impact is defined as the amount of money that international students collectively bring into the United States to pay for their education and to support themselves while they (and in some cases, their families) are here.

The methodology used to calculate the economic impact has been greatly refined over that last three decades with the current model in place since 2000.  The current algorithm in use was developed by Jason Baumgartner and Lynn Schoch at Indiana University – Bloomington’s Office of International Services.  The analysis of the dataset has been conducted each year since 2000 by Jason Baumgartner.

The goal of this economic impact formula is to use data already collected for other purposes to provide a reasonable estimate of the economic resources that international students import to the United States to support their education here each year.  The following figure outlines the algorithm:


The data sets used for this analysis comes from the following two sources:

  1. The Institute of International Education annual Open Doors report, funded by the Department of State, provides numbers of foreign students at universities and colleges throughout the United States during the academic year.  In many cases, this data provide separate totals for undergraduate, graduate, and non degree students.
  2. Peterson’s provides cost figures for tuition, living, and miscellaneous expenses at U.S. institutions for the academic year.  In some prior years this information came from College Board.

The extensive data provided by these two sources (which collect it directly from surveys of the institutions involved) allow us to make our estimates sensitive to differences between institutions.  However, there are still areas where our estimates and formulas could be improved.  For example, we compute economic impact only for students reported in Open Doors.  Universities that do not provide information to the Institute of International Education are not represented.  Also, enrollment reports represent peak enrollment, and not necessarily enrollment levels throughout the year.

To estimate expenses we use tuition, fees, and living expenses estimates derived from Peterson’s data collected on surveys completed by institutions every year.  We try to make our calculations sensitive not only to differing costs at institutions, but differing costs for ESL students, undergraduates, graduate students, and students on practical training as follows:

  1. Undergraduates and English Language Programs: The number of undergraduate students at an institution is specified by Open Doors data.  Peterson’s data provide undergraduate tuition and fee amounts, on-campus room and board amounts, and miscellaneous expenses.  These categories are sometimes broken down into averages for international, out-of-state, flat rate, and in-state, students.  When multiple averages are available, we choose averages in the order given above.
  2. Graduate Students: The number of graduate students at an institution is specified by Open Doors data.  Peterson’s data provide graduate tuition and fee amounts, on-campus room and board amounts, and miscellaneous expenses.  If there are no differentiated graduate expenses provided by an institution in the Peterson’s data then the undergraduate expenses would be applied.
  3. Students on Practical Training: We assume these students earn enough in their U.S. jobs to pay living and educational expenses for the year, and so import no funds for their support.  Therefore, net economic impact of students in practical training is zero.

Economic impact of an international student equals tuition and fees, plus room and board, plus miscellaneous figured at 50 percent of room and board, less U.S. support.  We assume that spring enrollment figures are the same as the fall figures reported, that all students are enrolled full time for two semesters or three quarters a year, and that students live on campus for the full year.  The miscellaneous expenses, enumerated in Peterson’s data, average about 40 percent of room and board expenses.  We use a 50 percent figure as an approximation that includes all extra expenses except for travel.

The amount of U.S. support given to international students is calculated to subtract from the expenses in order to establish a greater sense of the export dollars flowing into the U.S. economy.  For this analysis the Open Doors survey is used; which asks schools to report the percentage of their students who are self-funded, the percentage who have U.S. source income, etc.  The U.S. support percentage includes funding from a U.S. college or university, the U.S. Government, a U.S. private sponsor or current employment.  For this analysis the percentages are calculated based upon the institution’s Carnegie classification and the academic career of the student.  For example, this process will differentiate the level of support between undergraduates and graduates at a particular research institution while it also differentiates between a baccalaureate classified institution from an associate’s classified institution.

This model represents the export dollars brought in to each institution, state, and the overall U.S. economy that can be tracked over time.  This provides a good measure for comparisons to other export data, such as data published by the Department of Commerce.  This estimate also takes into account any U.S. funding or employment the international students may be receiving in an effort to best represent these export dollars flowing into the U.S. economy.  This provides for an algorithm that identifies and estimates for this large U.S. export, provides a political argument for support of international education at both the national and university level, provides a trend of this data going back many years, and is very sound to hold up to the political nature of critiques of this statistical analysis.

There is no multiplier effect calculated within this analysis which may provide an even greater representation of the end result of these export dollars in terms of the additional revenue generated by the flow of these dollars throughout the overall U.S. economy.  Instead this model focuses on core export dollars as a result of international students studying within the United States.

For more information please refer to the NAFSA Data & Statistics.

Jason Baumgartner

Editor’s update: link here for the press release of the newest US report (‘International Students Contribute $17.6 Billion to U.S. Economy‘) which was released by NAFSA on 16 November 2009. The report was also produced by Jason Baumgartner.

US-European academic collaboration via transatlantic joint and dual degree programs

Back in May 2008, we profiled a call for input into a survey by the US-based Institute of International Education (IIE) and the Germany-based Freie Universität Berlin regarding joint and dual/double degrees (see ‘Special survey on transatlantic joint and dual/double degree programs’). We’re interested in this phenomenon as it helps to suture together and de-nationalize, albeit unevenly, higher education systems, institutions, pedagogical practices, and learning outcomes. See, for example, the insights developed in these three guest entries for GlobalHigherEd:

The IIE/ Freie Universität Berlin survey results have just been posted here and here. I’ve pasted in the full press release, below, for those who want a summary of the free report before deciding if it should be downloaded.

iiefubreportcoverNew Survey Examines U.S.-European Academic Collaboration
Research Report Provides Data on Transatlantic Joint and Dual Degree Programs

NEW YORK and BERLIN, January 22, 2009 — In today’s global economy, professional collaboration with colleagues and customers in other countries is important for successful careers in business, government and academia. A new study by the Institute of International Education (IIE) and the Freie Universität Berlin finds that universities on both sides of the Atlantic are working to establish more international joint and dual degree programs to make their campuses more international and better prepare their students, but participation in and support for such endeavors varies widely among institutions and countries. In particular, the study found that European campuses currently offer twice as many collaborative degrees, and European students are more likely to participate than their U.S. counterparts. The fact that 87% of respondents said that they wanted to develop more joint and dual degree programs attests to the growing importance of this form of academic cooperation.

A new report, “Joint and Double Degree Programs in the Transatlantic Context,” released today by IIE and Freie Universität Berlin, examines the key findings of an extensive survey conducted in spring 2008, based on responses from 180 higher education institutions in the United States and the European Union. The report assesses the current landscape of transatlantic degree programs and identifies inherent challenges and opportunities of expanding existing or developing new programs. It is available for download at: or at

The survey and report are part of a project sponsored by the “European Union-United States Atlantis Program” jointly administered and funded by the U.S. Department of Education’s Fund for the Improvement of Postsecondary Education (FIPSE) and the European Commission’s Directorate General for Education and Culture. The project was launched in cooperation with several leading U.S. and European institutions: the Institute of International Education and the State University of New York (in the U.S.), and Freie Universität Berlin, the Franco-German University, and the Latvian Rectors’ Council (in the E.U.).

Later this year, the project partners will also publish a Transatlantic Degree Programs (TDP) Manual for Institutions, which is intended to serve as a key resource to institutions who wish to build or expand transatlantic joint or dual degree programs. Individual articles will provide practical recommendations on removing barriers and overcoming challenges in the development of these types of programs and highlight key issues related to establishing, managing and sustaining collaborative degree programs with a particular focus on the transatlantic context. Faculty members and university administrators with experience in developing and maintaining joint and dual/double degree programs are invited to submit articles to the Manual. Deadline for submitting articles is March 15, 2009. A call for papers is available on the websites mentioned above.

Major findings of Joint and Dual/Double Degree Programs in the Transatlantic Context report include:

  • European institutions are about twice as likely to offer at least one joint degree as U.S. institutions and offer about twice as many such degrees as U.S. institutions.
  • U.S. students are less likely than European students to participate in collaborative degree programs.
  • Top 5 partner countries for European institutions: United States, France, Spain, Germany and the UK. Top 5 partner countries for U.S. institutions: Germany, China, France, Mexico, South Korea/Spain
  • The most popular academic disciplines for collaborative degree programs are Business and Management and Engineering.
  • English is by far the most commonly used language of instruction, but the majority of responding institutions indicate that their programs offered language training both at home and abroad.
  • Dual or double degrees appear to be much more common than joint degrees.
  • U.S. institutions are much more likely to cover costs with student fees than European institutions. EU institutions tend to draw more funding from university budgets and external sources (such as foundations, governments, etc).
  • A large majority of responding institutions plan to continue to develop more joint and dual/double degrees.
  • The motivations for launching joint and dual/double degree programs appear to revolve largely around advancing the internationalization of the campus and raising international visibility and prestige of the institution.
  • The most important challenges for both EU and U.S. institutions appear to be securing adequate funding, and ensuring sustainability of the program. U.S. institutions also report challenges in securing institutional support and recruiting students, while EU institutions are more likely to encounter difficulties in designing the curriculum and agreeing on credit transfer recognition.

The Atlantis Program also sponsors a grant competition to promote a student-centered, transatlantic dimension to higher education and training in a wide range of academic and professional disciplines. The program will fund collaborative efforts to develop programs of study leading to joint or dual undergraduate or graduate degrees. The deadline to apply for 2009 grants is March 23, 2009. Information on the Atlantis Program and the application process is available at: or

# # #

Note that the US Council of Graduate Schools is also working on a report regarding such degrees, clearly highlighting a surge in interest in all aspects of their development, operation, and efficacy.

Kris Olds

China: from ‘emerging contender’ to ‘serious player’ in cross-border student mobility

Last year we carried a series of reports (see here, here and here) on the global distribution of student mobility. While the US and the UK had the lion’s share of this market, with 22% and 12% respectively, we noted China had made big gains. With 7% of the global market and in 6th place overall, it was an ’emerging contender’ to be taken seriously, with trends suggesting that it was a serious player as a net ‘exporter’ and importer of education services.

So it was with great interest I read today’s Chronicle of Higher Education report by reporter Mara Hvistendahl, on China now being ranked in 5th place (behind the US, UK, France and Germany) as an “importer” of foreign students. See this OECD chart, from its new Education at a Glance 2008 report, to situate this development trend and China’s current position [recall that China is not an OECD member country].

As the Chronicle report notes, this is a far cry from China’s 33 overseas students in 1950.

Given, too, that in 1997 there were only 39,000 foreign students whilst in 2007 there were some 195,000, this 5-fold increase in numbers in 10 years (Chinese Ministry of Education and the China Scholarship Council) represents a staggering achievement and the one that is likely to continue. So, how has China achieved this. According to the Chronicle report:

To attract students, China offers competitive packages, replete with living stipends, health insurance, and, sometimes, travel expenses. In 2007 the China Scholarship Council awarded 10,000 full scholarships — at a cost of 360 million yuan ($52-million) — to international students. By 2010 the council aims to double the number of awards.

Two-fifths of the 2007 grants went to students in Asia. In a separate scholarship program that reflects its global political strategy, China is using its strengths in science and technology to appeal to students in the Middle East, Africa, and Central Asia, forming partnerships with governments in those regions to sponsor students in medicine, engineering, and agriculture.

But there are other factors as well pushing China up the ladder as an education destination. China is increasing regarded as a strategic destination by American students and the US government for study abroad. Figures reported by Institute of International Education fact-sheet on student mobility to and from the US show an increase of 38% in US students going to China in just 1 year (2005/2006). This also represents a profound shift in Sino-American educational relations.

In sum, these figures reflect the outcome of an overall strategy by China (perversely aided by the US’s own global trade and diplomacy agenda):

  • to develop a world class higher education system;
  • to internationalize Chinese higher education;
  • to stem the tide of students flowing out of China;
  • to attract half a million students to China by 2020; and
  • to advance Chinese interests through higher education diplomacy.

If realized, this would put China at the top of the exporting nations along with the US. It will also register China as a global higher education player with global impact. Without doubt this will change the geo-politics of global higher education.

Susan Robertson