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International Students

The Global Commerce Of Higher Education

International students contribute billions of dollars to the economy of the United States every year. The U.S. Department of Commerce recognizes education and training as the fifth largest export of the United States and formally classifies it as an industry. During the 1998–1999 academic year, 490,933 international students studied in the United States and they brought almost $11.7 billion into the economy. During the 1999–2000 academic year, 514,723 international students were studying in the United States and they brought $12.3 billion into the economy, through expenditures on tuition and living expenses. While the number of international students studying at higher education institutions has steadily increased over the years, policymakers, market analysts and advocates have been concerned because U.S. competitiveness in the international student market has been declining. The U.S. share of internationally mobile students seeking higher education at universities outside their country of birth in 1982 was 40 percent. Statistics compiled by the Organisation for Economic Co-operation and Development (OECD) in the year 1998 show that this percentage has now declined to approximately 32 percent.

Recognizing the contribution of international students to their economies, countries such as the United Kingdom, France, and Australia have introduced vigorous recruitment campaigns to compete for international students. The United States, in its bid to remain competitive in this market, is also formulating a series of measures to regain its market share in this industry.

Definition and Distribution

For the purposes of this entry, an international student will be defined as a student who (1) is a citizen or permanent resident of a country other than that in which he or she intends to study; (2) has a legal residence outside the country that he or she intends to study in; and (3) is or proposes to be in the host country solely for educational purposes on a temporary student visa. The United States today uses the term international student to describe individuals who fit this description, rather than foreign student, as in the past. Other countries still refer to students from other countries as foreign students. In this entry, these terms will be used interchangeably since different sources use either term. Table 1 provides figures for the distribution of foreign students in OECD countries by host country in academic year 1998–1999.

Global Market for International Higher Education

The global market for international higher education may be explained in terms of an interaction between supply-side factors and demand-side factors. It is important to note that the available literature in this area focuses only on students from developing nations choosing to pursue their higher education in developed countries. The literature does not shed light on reasons that students from developed countries choose to study in either developing countries or in other developed countries.

Supply-side factors. Supply-side factors refer to factors that motivate host countries to invite international students to study at their institutions of higher education. Supply-side factors may be classified into economic, political, security, and academic factors. Many of the factors mentioned here are specific to the United States, but may be generalized to other countries as well.

Economic factors. First, as mentioned earlier, international students and their dependents bring money into the economy. International students in Australia contributed more than $1 billion to the Australian economy and foreign students in the United Kingdom contributed approximately $1.8 billion to the economy of the United Kingdom. Second, international graduate students serve as research assistants in labs and projects at universities in the United States, thereby contributing to technological and scientific advancements. Third, in a country like the United States that has a strong tradition of immigration, foreign-born doctoral recipients, especially those in the science and technology fields, often stay on to enter the labor market as academicians or researchers, thereby making positive contributions to the U.S. economy and national interests. Finally, the presence of international students contributes to the creation of new jobs in the field of international educational exchange.

Political and security factors. First, students who study in the United States and then return to


their home countries are seen to go back with a sense of good will towards the United States. This good will benefits both U.S. political interests and business interests globally. Second, educating international students presents an opportunity to shape the future leaders who will guide the political, social, and economic development of their countries. International students in the United States gain an indepth exposure to American values such as democracy and take those values home to support democracies and free-market economies in their own countries. Third, educating international students plays an important role in American development assistance programs. Students educated in the United States form a cadre of trained professionals that understand the mission of U.S. development agencies such as the U.S. Agency for International Development (USAID). Development activities, while promoting social and economic progress in nations, also help to create a greater demand for American goods and services. Finally, international students provide Americans with an exposure to different cultures and political philosophies that, in addition to its social value, is seen as vital for U.S. security concerns.

Academic factors. First, international students provide cultural diversity to American campuses. Second, since they are often the best and the brightest in their countries, international students often provide a healthy dose of competition to American students, thereby raising the standards at institutions.

Demand-side factors. Demand-side factors refer to factors that motivate international students to seek higher education in countries outside their home countries. Economic models of student mobility have been developed since the mid-1960s by researchers including Everett Lee, Larry Sirowy and Alex Inkeles, Gerald Fry, William Cummings, Vinod B. Agarwal and Donald R. Winkler, and Philip G. Altbach. Most studies analyze demand-side factors that are classified as "push" factors and "pull" factors.

Push factors. The term push factors refers to factors that push students to seek higher education in countries other than their host or native countries. These can include poor educational facilities in certain subjects, social discrimination, limited openings at the university level, and an array of political and economic factors at home.

Pull factors. The term pull factors refers to incentives that pull students towards host countries. These factors include availability of scholarships, better facilities, political ties, cultural and linguistic similarities with the host country, and finally the hope that a foreign educational credential will help in obtaining a better job on their return to their home country.

Attracting International Students

The 1970s and 1980s saw a set of restrictive mechanisms, including tougher entry requirements and sharply higher tuition costs, come into place to restrict the flow of foreign students into the United States, Britain, France, Germany, Australia, and Canada. Reasons for this development included arguments that enrollments of foreign students damaged chances of students at home, that foreign students concentrated themselves in urban centers, and that foreign students often stayed and obtained employment in the host countries, thereby reducing opportunities for noninternational students in certain fields in those countries. However, recognizing the contributions that foreign students make to the economy, the United States and other countries have started making efforts to attract foreign students again.

Since late in the twentieth century, the United States has been in the process of formulating an international education policy to ease visa requirements, ease prohibitive tuition costs, and increase scholarships for international students.

The United Kingdom, the primary competitor of the United States for international students, has declared a formal international education policy designed to attract international students. The government and the British Council developed a program known as "the U.K. Education Brand" in 1999. The U.K. Education Brand is a research and development program that, according to the British Council, is intended to "re-establish and maintain the United Kingdom's credentials as a world class provider of education and training." In addition to aggressive marketing strategies, Prime Minister Tony Blair proposed a four-point program in 1999 to increase their current market share from 16 percent to 25 percent by 2005. The four point program includes (1) a streamlined visa process for qualified applicants; (2) state-of-the art electronic information systems in other countries to provide information to potential students; (3) removal of work restrictions so that international students can work and pay for school; and (4) 1,000 extra scholarships for international students funded by government and private industries.

Australia and other countries created easy-to-read websites that are inviting to students. Australia has established a comprehensive website that deals with all aspects of international education, sponsored by the government.

France, in 1998, announced a new initiative called Edu France, jointly created by the French ministry of national education, research, and technology; the ministry of foreign affairs; and the ministry for international cooperation. Edu France was created with a budget of 100 million French francs for four years and a target of attracting 500,000 students overall.

Japan's government is developing a plan to raise the number of foreign students studying in Japan from approximately 20,000 to 100,000. In 1999 the Japanese ministry of education instituted a simplified testing requirement for foreign students in Japan. Until 1999 students who came to Japan either at their own expense or on private scholarships had to take two tests, the Japanese Language Proficiency Test and the General Examination for Foreign Students. Now they need to take only one. Students interested in studying a liberal arts curriculum take the language proficiency test and students interested in studying science-based subjects take the general examination. Also, the tests are now given in ten overseas locations in Asia and are administered twice a year, compared to the previous system where they were administered only in Japan and only once a year.

Most countries interested in attracting international students are now formulating policies which ease work restrictions and visa requirements and simplify testing procedures.

Implications of September 11, 2001

The events of September 11, 2001, when international terrorists (several of whom had been in the United States under student visas) hijacked and crashed four American passenger planes, do not portend well for the United States as an attractive destination for international students. First, national security concerns have demanded that the United States tighten its immigration and admission procedures. Legislative demands for better tracking of international students could increase the oversight of international students in ways that some may find oppressive. Second, foreign students' own concerns for their personal safety might cause students not to choose the United States as a destination for study. Since neither the nature nor the degree of U.S. and international students' responses to the events of September 11, 2001 are clear at this time, it is too early to gauge the short-or long-term impact of potential changes.


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