International Education Matters

A Forum for Issues Pertaining to
Intensive English Programs

The Effects of Congressional Legislation
on the International Education Market

Kevin Clark
ke.clark@neu.edu
March, 2003

This paper explores the effects of congressional legislation on the economics of international education. The United States has passively maintained the lion’s share of the global market for international education since the end of World War II, doing little to promote and exploit the market’s potential. Several major competitors have entered the market aggressively. Rather than competing in order to maintain or increase its market shares, the United States continues to contribute to its own losses by both neglecting to promote itself and by passing counterproductive legislation.

This paper will address the topic at hand by: 1) Giving an overview of the contributions of international students to the economies of the United States overall and Massachusetts in particular; 2) Describing how the market has been exploited by international competitors; 3) Outlining examples of legislation that has affected America’s standing in the market, with a focus on student tracking; and, 4) Drawing conclusions regarding the economics of international education.

Are International Students Good for the U.S Economy?

International students comprise the United States’ fifth largest service-sector export. As table 1.1 demonstrates, international students studying in the United States contribute considerably to the American economy. Their net contribution in the 2001 -2002 academic year was nearly two billion U.S. dollars.

Unlike the majority of American students, international students receive very little financial aid from the United States government. They are “full-ticket students” in the idiom of admissions officers across the country.

Based on the figures in table 1.1, foreign students are good for the American economy. Yet, the United States has done very little to actively recruit international students. The appearance of international students on campuses across America has been an accepted fact of life, an economic given, for several decades. The perceived superiority of the higher education system in America resulted in international students “reaching the quarter-million mark in 1978 and the half-million mark in 1999” (Moffatt, 2002). Even after the terrorist attacks of September 2001 and the subsequent tightening of visa issuance regulations, the presence of international students on American campuses saw a 6.4% increase in 2002. As table 1.2 shows, these numbers have remained steady or increased since 1980.

Table 1.2 Number of International Students Studying in the USA 1980 – 2000
Year Number 1980-1981 311,880 1985-1986 343,780 1990-1991 407,530 1995-1996 453,787		Year Number 1996-1997 457,984 1997-1998 481,280 1998-1999 490,933 1999-2000 514,723

During the 1997 – 1998 school year, 481,280 foreign students studied in the USA. This was a 5.1% increase over the previous year. In the 1999 – 2000 school year: 514,723 foreign students were in the USA. During the 2001 – 2002 school year, 582,996 foreign students attended American universities. Comprising only three percent of the national college student population, international students contributed nearly twelve billion U.S. dollars to the national economy in the 2002 – 2003 school year.

Are International Students good for Massachusetts’ Economy?

During the 2001 – 2002 school year, 29,988 international students studied in Massachusetts (Table 1.3).

Table 1.3:  Massachussetts 2001 -- 2003
Total Number of Foreign Students		29,988
Contribution from Tuition and Fees to the State Economy		$562,799,000
Contribution from Living Expenses		$582,865,000
Total Contribution by Foreign Students		$1,145,664,000
Less U.S. Support of 32.5%		-$372,059,000
Plus Dependents' Living Expenses		+$27,506,000
Net Contribution to Massachussetts Economy		$801,111,000
(Nafsa, 2003)

After California, New York and Texas, Massachusetts had the fourth highest population of international students in the United States (Anderson, 2002). They contributed a total of $801,111,000 U.S. dollars to Massachusetts’ economy, an economy that faced severe budget and personnel cuts in its education budget during that same year.

How do these numbers affect individual universities? Boston University collected $131,247, Harvard University was enrichened by $87,618, and Northeastern University reeled in $72,695 in 2001 – 2002 (NAFSA, 2003).

What kind of Market is International Education?

It is an international market in which many nations compete. Significantly, it is one in which America’s share is declining. Between 1983 and 2003, the United States’ share of the market dropped from forty percent to thirty percent (Rudavsky, 2003). A recent Chronicle of Higher Education article (McMurtie, 2001) demonstrates how other countries’ governments have actively sought to increase their market shares:

Britain has traditionally maintained about half as many international students as the United States has. Recognizing the profitability of this market, Toni Blair recently committed eight million dollars to an effort aimed at attracting 75,000 additional international students. This effort includes scholarships and easier visa procedures. After conducting marketing surveys, the government decided to actively promote British universities with a marketing drive aimed at improving the stodgy image of British universities. As a result of this effort, Britain saw a six percent increase in enrollments from outside of the European Union in the fall of 2000. Jenny Scott, the British Council’s director of education for its United States’ office, reports that the government made the visa process easier for countries that are significant to the market such as China, India and Pakistan. Chinese enrollments reached seventy percent in the fall of 2000 while the number from India increased seventeen percent (McMurtie, 2001).

In Australia, thirty-nine universities operate a nonprofit organization that provides centralized information and logistical support for prospective international students. Australian universities are actively marketed abroad by the government. Marketing efforts have capitalized on Australia’s hardy out-of-doors reputation while playing up the excellence of its universities with the slogan, “An intellectual adventure.” “Since 1994, the number of international students in Australia has risen 73 percent while the number in America has increased only 21 percent,” (McMurtie, 2001).

In France, the government has initiated an effort to attract 500,000 more international students. In Germany, a consortium of universities started a sixteen-million-dollar recruitment campaign that targets the Middle East, Europe and Latin America. In Japan, where there has been a drop in college-age domestic students at home, the government has supported efforts to go after students in China and South Korea to fill classroom seats. As a result, Japan has seen a twenty-three percent increase in international enrollments. Canada, which does not even have a ministry of education, has developed a nonprofit network of educational institutions and governmental offices to draw more international students (McMurtie, 2001).

Compared to the initiatives that these other countries have used in order to position for market share, the U.S. stands in stark contrast. First of all, the United States has no organization such as the British Council, the mission of which is to increase the presence of British culture overseas and inculcate a desire to take part in British education. Secondly, the budgets for the 400 American overseas advising centers have been significantly cut (Southwick, 2001). Thirdly, not only are U.S. efforts to capitalize on this market lacking, one finds many instances of efforts that could easily be interpreted as aiming at decreasing the number of international students in America.

Lip Service and Counterproductive Measures

Secretary of State, General Colin Powell, speaking about Education Week, declared, “As we work to end the scourge of terrorism, let us also work to increase peace, prosperity and democracy. People-to-people diplomacy, created through international education and exchanges, is critical to our national interests” (Moffatt, 2002). Rod Paige, Secretary of Education, reinforced this idea by saying, “International education not only promotes mutual understanding and cooperation among nations, it can also strengthen national security, foreign policy, and economic competitiveness” (Moffatt, 2002). Speaking soon after the terrorist attacks of September 11, 2001, Terry W. Hartle, Senior Vice President for Government and Public Affairs stated “The lesson of last week is that we need more engagement with the world, not less” (Southwick, 2002).

Many acts of Congress and several of George W. Bush’s presidential directives, however, signal that the present government is headed in the opposite direction regarding international education. In fact, since September 11, 2001, “Congress has passed more laws concerning international education than in the past twenty years combined” (Arnone, 2002).

On October 29, 2001, the American President issued a directive entitled “Combating Terrorism through Immigration Policies,” a directive that states, “The government shall implement measures to end the abuse of student visas and prohibit certain international students from receiving education and training in sensitive areas, including areas of study with direct application to the development of and use of weapons of mass destruction” (Burd, 2002). This directive would exclude international students’ participation in such sought after courses as chemical engineering, nuclear technology, biotechnology, advanced computer technology and robotics.

The regulation that poses the greatest potential threat to America’s share in the international education market is the Congressionally mandated student visa tracking system: Student and Exchange Visitor Information System (SEVIS).

The History of SEVIS and Its Legislation

International education is a regulated market in that every foreign student who would like to study in the United States must adhere to the regulations that Congress empowers the State Department and the Immigration and Naturalization Services to employ. SEVIS, a computerized student tracking system that links U.S. consulate offices around the world and INS officials at ports of entry with thousands of post-secondary institutions around the United States, is the most recent evidence of how highly regulated this market is. The implementation of this system can be traced through developments in congressional legislation.

On February 26th, 1993, terrorists detonated a truck bomb in the parking garage of the World Trade Center in New York. It was subsequently discovered that one of the accused terrorists had entered the United States on a student visa. In response to this bombing, the US Congress passed the Illegal Immigration Reform and Immigration Responsibility Act of 1996, which required the establishment of a registration and tracking system for all international students studying in the United States. In 1997, the previously established Interagency Partnership Regulating International Students (CIPRIS) began test piloting a computerized system to track all students as well as some professors and researchers. During the summer and fall of 2000, the database from CIPRIS was drawn upon in order to create SEVIS, the Student and Exchange Visitor Information System, an advanced computerized tracking system that was heatedly debated within the government and higher education circles (Arnone, 2002).

In the fall of 2001, the World Trade Center Towers were destroyed and the Pentagon was attacked by terrorists. Subsequently, Congress enacted the USA Patriot Act, which, in addition to dedicating $36.8 billion dollars to the development of SEVIS, reinstated a previously abandoned deadline date, January 30, 2003, for the implementation of the system (Arnone, 2002). After several false starts the SEVIS system was completely implemented on February 15, 2003.

SEVIS: Before and After

Before SEVIS, an international student who wanted to study in an American university followed these steps: She sent in the appropriate application materials, which included paperwork that demonstrated sufficient financial support. The university considered the student’s application packet, then produced and sent qualified applicants a form I-20, which the student presented at her local American Consulate. A consulate officer would meet with the prospective student, interview her and either issue or deny a student visa. If the student received the visa, she proceeded to the United States.

Since the implementation of SEVIS, things have changed. When a student applies to a university, the university no longer has the ability to manually create an I-20 form. Instead, the university must enter a request for an I-20 into a centralized computer system. The State Department receives this request through a computer network and either grants or denies it. If it grants the request, it sends back to the university an I-20 which has a bar code on it. The university sends this I-20 to the student. The student carries the I-20 to the local consulate officer, who checks the SEVIS system for confirmation that the I-20 corresponds with a proffered spot at the given university. The consulate officer conducts the interview as before, but the interview is longer and may include a waiting period. A student either receives a student visa or does not. A student who receives the visa may proceed to the United States. At the port of entry, the student’s bar code on her I-20 is scanned, and her university is notified of her arrival at the local airport. The onus is then on the university to register the student’s arrival on campus on the SEVIS system. Having acknowledged the student’s arrival at the university, the university is subsequently held accountable for all changes in the student’s status being updated in the SEVIS system. These changes may be anything from a withdrawal from the university to a change of address to taking on a work study job.

In addition to the $36.8 million dollars that the USA Patriot Act dedicated to the implementation of the SEVIS system, all international students are now charged an additional ninety-five dollar fee to support the system that tracks them (Curry, 2001).

Market Effects:

While the early data show an increase in international students studying in the USA in the 2002 – 2003 school year, this does not indicate that international education in America is alive and healthy. An increase in overall enrollments has taken place even as America continues to lose overall market shares. Whereas forty percent of all foreign students studying outside of their countries chose to come to America ten years ago, only thirty percent of the overall population chose to do so this past year. The market has been aggressively tapped by the efforts of other countries such as Britain, Australia and Japan, efforts that have included easing visa procedures and placing fewer restrictions on students in country.

Many of the effects of the SEVIS system have not been assessed yet, and a great deal of the data is simply unavailable. The State Department does not provide visa acceptance/denial rates as public record. Neither does it provide the reasons for visa denials. During a recent teleconference a State Department spokesperson reported that twenty-five percent fewer F-1 visas had been issued for the current school year than had been for 2001 – 2002 (Smith, 2003), yet overall international enrollments have reportedly increased.

A great deal of the data is anecdotal. A 214(B) denial is the most often cited reason for refusing a student visas. It denotes that the consulate officer found that the visa applicant did not demonstrate strong enough ties to her country (U.S. Department of State, 2003). Directors of Intensive English Programs deride the 214(B) denial as the consulate officer’s safety net. With Intensive English Programs (IEPs) experiencing an average decrease of twenty-three percent in enrollments in 2003 (UCIEP, 2003), an increased number of applicants reports receiving a 214(B) denial. Most IEP administrators believe that intensive English programs have been singled out for this type of denial, as consulate officers attempt to limit visas. On one hand, the State Department claims that consulate officers “do not second guess a U.S. academic institution’s decision to admit a particular foreign student,” (McMurtie, 2001). On the other hand, NAFSA’s Victor Johnson, contends that “Congress is ready to pounce on any (federal employee) who makes a wrong visa decision,” which causes consulate officers to look “at every visa decision as a potential career-ending decision,” (Mollison, 2002). Many in the field contend that IEPs are being especially closely scrutinized. Hani Hanjour, one of the September 11 hijackers, entered the United States for an ESL program at a Berlitz language school that he never attended (Curry, 2001). Also, two of the September 11 hijackers were issued student visas for flight school six months after they died in the attacks. Visas for ESL programs and vocational training programs have been reported in straw polls to be receiving a disproportionately large number of 214(B) denials.

Many contend that the legislation that has been created around student visas in the war on terrorism is foolishly misguided. In the media and in congress, spokespeople are quick to remind the public that one of the September 11 hijackers entered the United States on a student visa. What people forget is that the other nineteen hijackers were not in the United States on student visas. In fact, student visas comprise only two percent of the visas that the United States issues each year (Arnone, 2002). Ninety-eight percent of visas are issued to populations for whom there is no legislated tracking mechanism. Tourists need to report to no one the agenda for their visits. As the Associate Director of Public Policy for NAFSA stated, with this legislation and $36.8 billion dollars, “We’ll know everything there is to know about 2 percent of the population and nothing about the other 98 percent,” (Strohm, 2002).

Conclusions:

Although the significant dollar amounts that international students contribute to the national and state economies are clear, few of the other factors affecting this lucrative market are. First of all, the continued and growing presence of international students in American universities is a deceptive phenomenon. Their considerable presence does not denote a healthy market because America’s global market share continues to decline regardless of the perceived stability in raw enrollment numbers. Secondly, while other countries deftly and effectively market their universities, the United States decreases its market efficiency by creating more barriers through legislation and presidential directives. Finally, although the present and long-term effects of SEVIS, the USA Patriot’s Act and Homeland Security are still opaque, it is clear that barring students from desirable courses of study and suspending habeas corpus are not steps in the direction of efficiency in this market.