International students comprise 6% of enrollees at U.S. colleges and universities. Reliance on revenue from international students varies widely, but for many large public and private research universities, foreign students are a vital source of revenue.
Public institutions lost much of their state funding during the Great Recession of 2008-10 and still need to fully replace it. International students pay full tuition and receive no financial aid, so their financial contribution has been seen as a solution. Instead of raising tuition even higher or cutting programs, many public institutions chose to recruit more international students as one way to replace lost funds from state budgets.
The Decline in International Students
Public universities took in $55 billion in revenue in 2024-25 from international students, but new enrollees declined by 17% in fall 2025 from 2024, according to the Institute of International Education (IIE). Although most institutions are not dependent on foreign revenue, a significant number are highly reliant on it. Aside from exceptionally well-endowed schools like the Ivies, these institutions suffer when foreign enrollees decline.
Moody’s indicates that schools at which international students exceed 20% of enrollees are at risk. Enrollment declines have already led financially stressed institutions to freeze hiring, cut spending, or warn about budget emergencies. Several research universities, including Johns Hopkins, have slashed spending. DePaul University imposed a hiring freeze and executive pay cuts after international enrollment fell by 30%.
More Trouble Ahead
There are several factors driving the recent and projected decline in the number of international students attending U.S. institutions. These are:
Immigration and Visa Policy
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- Stricter visa policies, rising costs, increased scrutiny at consulates, limited visa appointments, and visa bans affecting certain countries are among the key factors that have caused the decrease in enrollment.
- The Administration’s changes to student visa policy have resulted in 150,000 fewer international students, down from a 2023-24 peak of 1,177,766.
- In IIE surveys, 96% of institutions cited visa difficulties as a barrier to enrolling international students and 68% cited travel restrictions.
- The State Department has revoked over 6,000 student visas, attributing 4,000 to violations of law, though the Department has not confirmed whether any deported students were convicted of a crime.
Perception of a Hostile Climate
Concerns among prospective students about being unwelcome in the U.S. (67% according to the IIE) and about the broader social and political climate (64%), especially anti-immigrant rhetoric from top officials, have also stymied recruitment. University leaders cite “The declining desire of international students to study in the U.S.” as a factor in the decline in enrollment.
A State Department policy requires student visa applicants to make their social media accounts public so government agents can review them for “hostile attitudes” toward the U.S. This policy, along with the Administration’s mass deportations, ICE agents on college campuses, and high-profile detentions of foreign students have created anxiety and uncertainty among students weighing enrollment in the U.S.
Post-Graduation Work Opportunities
An anticipated change to Optional Practical Training (OPT), a program allowing international students to work in the U.S. after graduation, is expected to further reduce interest in U.S. institutions. Many foreign students have chosen U.S. schools because of OPT career opportunities after they graduate.
Competition from Other English-Speaking Countries
English-speaking international students often want to attend English-speaking institutions. Students deterred or discouraged from enrolling in the U.S. can attend a highly ranked alternative in Canada, Australia, Ireland, New Zealand, or the U.K.
Economic Impact
International students at U.S. institutions contributed $55 billion to the U.S. economy in 2024. The 17% drop in new enrollment in 2025-26 has led to a loss of over 135,000 jobs in higher education in the U.S.
Foreign Exchange
Exchange rate shifts act as tuition hikes (or discounts) that don’t show up in a college’s Cost of Attendance, so the exchange rate between the U.S. dollar and a student’s home currency is a meaningful factor in enrollment. When the dollar strengthens against a student’s currency, the cost of a U.S. education rises even if tuition remains nominally the same.
When the Chinese yuan fell against the dollar, Chinese students faced an effective tuition increase of $3,700 each, costing $1.2 billion across 328,000 U.S. enrollees. Mexican students saw a larger price increase of $6,500 when the peso dropped 14% against the dollar.
Foreign revenue plays a key role in college budget planning because it subsidizes American students. When exchange rates shift unfavorably, a foreign revenue decline causes a decrease in funds available for institutional aid for American students. In other words, a weaker foreign currency combined with a stronger dollar raises the cost of a U.S. education which, in turn, reduces merit scholarships (tuition discounts) for domestic students.
Outlook
The ongoing decline in international enrollment has been caused by a mix of policy changes, visa restrictions, immigration enforcement, the U.S. political climate, uncertainty about post-graduate work, and alternative English-speaking education elsewhere. If current policies continue, analysts predict a 15% drop in 2027-28. The long-term risk for the U.S. is a permanent loss of market share, especially in high-demand STEM programs.
The decline in international students is occurring simultaneously with a more ominous demographic crisis; the number of U.S. high school graduates peaked in 2025 and began a long decline leading to a 13% drop by 2041. As a result, American institutions will find it difficult to offset international losses with additional domestic enrollees. The projected impacts will be sharp declines in revenue at most colleges along with job losses, campus closures, higher tuition for Americans, and a weakened research and innovation pipeline.
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