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Is the International-Education ‘Bubble’ About to Pop?

There has been much talk in the United States recently about higher-education “bubbles.” The growing student-loan debt is one, while others point to increasing costs and continued high unemployment as an indicator that higher education writ large is creating a bubble. Closer to our area of study are claims of a possible international-branch-campus bubble.

One bubble has gotten less attention and may be on the verge of popping. And if it does, it could have a big impact on academe.

Colleges and universities in the United States have become increasingly reliant on international students. According to latest data from the National Center for Education Statistics, international students account for around 10 percent of all graduate enrollments (compared with about 3 percent in undergraduate programs). But a recent report from the Council of Graduate Schools suggests that the pipeline may be starting to dry up. The number of international applications to American graduate schools increased by only 1 percent this year, following three consecutive years of about 10 percent growth.

Maybe a 1-percent growth rate is not that alarming, especially following so many years of near double-digit growth. It’s probably only a small blip that will rebound next year, right? Perhaps. But we think the 1-percent increase could be an indicator of a more troublesome future, especially for science, technology, engineering, and mathematics, or STEM, programs.

First, international graduate students provide a substantial amount of talent in science and engineering – the fields that tend to drive the knowledge economy. Eighty-four percent of foreign students who earned doctoral degrees in the period of 2001-11 did so in high-demand areas in the fields of science and engineering. The National Science Foundation reports that the percentage of science and engineering doctorates awarded to foreign students peaked at 41 percent in 2007. About 35 percent of postdocs are temporary visa holders. Finally, according to a report by the Partnership for a New American Economy, foreign students, postdocs, and other nonfaculty researchers were behind 54 percent of the patents issued by universities in 2011. This means that any “blip” in international-student enrollments will disproportionately affect the areas of science and engineering.

Second, about half of all foreign applicants are from one nation: China. In fact, the NSF reports that about 40 percent of all foreign students who received doctoral degrees from 2001-11 came from China. According to the Council of Graduate Schools, applications to graduate schools from China have declined by 5 percent. This is a drastic reversal following seven consecutive years of double-digit increases in Chinese applications.

In an ideal scenario, the proportion of applications would be distributed among enough nations that a downturn in one country is offset by an increase in another. And, in fact, the decline in Chinese applications was offset by a 20-percent increase in applications from India. But that is only shifting, not diversifying, the source. In fact, the NSF data reveal that individuals from China, India, and South Korea account for half of all doctoral degrees in science and engineering awarded to foreign visa holders. When most applicants come from just a few source countries, what happens when students suddenly start deciding to go somewhere else?

This trend is also set against a broader backdrop of two consecutive years of overall decline in the number of individuals attending graduate school in the United States. While other nations are reducing barriers to attract intellectual talent and their institutions are increasing recruitment of foreign graduate students, universities here may have become complacent. Recent data suggest that it is an unfounded expectation that interest among foreign students in a U.S. education will never wane. The reality is that we are in an intensifying worldwide competition that Ben Wildavsky calls the “great brain race.” Stop to consider the possibility that the U.S. dominance in the race may no longer be definite.

Do these trends portend the end of graduate education as we know it in the United States? Likely not. But so much of our STEM-research infrastructure has come to rely on China sending us its graduate students. What would happen to our knowledge economy should China continue to cut back?