How American Universities Built Their Own International Enrollment Cliff (Part One)
Four Pipelines Under Pressure
A few years ago I had the good fortune to go on a grand tour of American universities, visiting multiple colleges for intensive week-long visits. Midway through my journey – which I later chronicled in my book Capitalizing on College – I traveled to the Midwest region to visit a tuition-dependent university that was bleeding students and in danger of closing.
Enrollment had plummeted by 15% over the past decade. The numbers were so alarming that the president and trustees had brought in a “business-savvy” provost in a last-ditch effort to stop the hemorrhaging and turn things around.
When I asked the provost to tell me about her strategy, her eyes lit up. She saw tremendous “excess capacity” where the academic units of the college weren’t “producing” at their potential “output.” The university was sitting on a goldmine of unrealized revenue streams. She rattled off the missed opportunities with barely contained excitement:
No online degree programs, no training system, no external vendors, a handful of courses, [and] no international programs other than a couple of faculty who do tremendous programs – but they are ‘his Rome trip’ and ‘her Paris trip.’
She kept going:
Financially they did no travel, no international partnerships, couple million in research grants, huge cache in community service but not integrated, and no experiential learning to speak of. And I am looking at this place going “holy shit!”
The conversation was striking. Here was a university executive avidly looking for margins and seeing dollar signs in every corner of the school. But notably absent in her breathless inventory of potential revenue streams were the international markets that have turned into vital sources of income for universities nationwide. She had identified the nooks and crannies at her school but had overlooked one of the most front and center opportunities schools had for growth. Needless to say, her prescriptions, while helpful, did not turn the tide at her school, and two years later she was shown the door.
But her blindspot for international revenue streams revealed something larger: the uncritical acceptance by American higher education of international programs to subsidize operations, cover costs, and generate the revenue that keeps institutions running.
After speaking with over 150 university leaders across the US, I’ve identified four distinct ways that institutions have woven international student programs into their financial survival strategies. What emerges is a picture of an educational system that has quietly transformed international education from a cultural exchange into a business model – one that many universities can no longer afford to live without – and must rethink in the modern economy.
Sending our students to you: Study abroad
The first tributary of the international program revenue stream is perhaps the most familiar program that many Americans assume exists for educational enrichment – study abroad. What began as a cultural exchange has become part of a revenue mechanism that universities increasingly rely on to balance their budgets.
The financial architecture is straightforward: A student pays their home institution a hypothetical 20k for a semester abroad. The home university then pays the foreign partner institution 15k for that same semester and pockets the $5,000 difference.
Universities have systematically evolved this model to maximize financial dependency. Many schools now outsource their study abroad operations to third-party providers who offer substantial kickbacks to secure student enrollments. A New York Times article revealed how these providers provide cash bonuses (up to 5% of student fees), marketing stipends, and exclusive agreements worth up to $500 per student. Some even throw in free trips for school officials, creating personal incentives that further entrench the financial relationships.
Universities have built an entire administrative apparatus around maximizing these revenue streams. One senior leader I interviewed for Capitalizing on College described their approach:
We have 135 agreements in 45 countries for exchanges. We use a platform to establish operations, and we network well in those countries with the government and with others. And with that network, we build tailor-made programs. We adapt, we have the flexibility to deliver what others want.
This extensive infrastructure represents a substantial institutional investment in international revenue generation – one that requires consistent student participation to justify its costs. The educational benefits are real – students do develop language skills, cultural awareness, and global perspectives. But universities have structured these programs into financial necessities, creating institutional pressure to maintain enrollment numbers that often prioritizes revenue over educational outcomes. When study abroad becomes essential to balancing budgets, the student experience runs the risk of becoming secondary to the revenue imperative.
Sending your students to us: International recruitment
The second tributary involves the practice that has made American universities most vulnerable to external forces: actively recruiting international students to study on US campuses. The political attacks on this practice by the federal government reveal just how dependent institutions have become in a moment when international students are increasingly price sensitive. It has long been a cornerstone of American higher education, with a majority of Americansfinding international students beneficial to the country and major university leaders like Arizona State University President Michael Crow stressing how international student recruitment is “a huge part of the American economy.”
While universities frame this as cultural exchange, the financial realities of the American education system have made it a crucial pilar of instituational stability. International students typically pay higher net tuition than most in-state students since they cannot access federal aid or state subsidies, making them a crucial revenue source for institutions facing declining state funding.
Universities have built entire recruitment infrastructures around this dependency, creating relationships that prioritize financial sustainability –– and put pressure on maintaining their educational mission. One senior leader I spoke to reflected on the depth of their school’s relationship with an international partner:
The market that we are serving, we are approaching in a very supportive way, in a very strategic way seeing them as our customers. We understand them very well.
The transactional framing is telling – in the American higher education system, students have become "customers" and education has become a "market." In a similar (though decidedly more blunt) acknowledgment of how financially dependent his institution had become on Chinese students, one president quipped, “I wish I had picked the lottery like I picked China.”
Sending our classrooms and faculty to you: Intensive courses
The third tributary involves universities creating offshore programming – mobilizing the classroom by educating foreign students in their own country. Rather than individual students traveling to the United States to take classes in person, this approach flips the model and takes in person classes abroad, but without a commitment to constructing and maintaining a physical building or campus.
Several schools I visited discovered they could successfully generate tuition revenue from international markets without the overhead costs of campus infrastructure or student services, targeting students who could not afford the full cost of studying in the US. They reported how they could extract tuition revenue from international markets without the overhead costs of campus infrastructure or student services. While framed as expanding educational access, this model also serves institutions' financial needs – allowing them to tap revenue streams in countries where local economic conditions make these programs profitable despite charging lower tuition than on-campus equivalents.
The financial appeal of this model has made it pervasive across higher education, and it has become particularly lucrative for Executive MBA degree programs offered by elite business schools. Commonly referred to as “EMBA” programs, students choose from courses offered on campus or in various locations globally such as those offered by Oxford’s Saïd Business School in South Africa and Hong Kong, or those offered by UVA’s Darden School of Business in Australia, Chile, India, Morocco, and Vietnam. These revenue streams have become so lucrative that one professor told me, “When the sun rises and the sun sets, it is rising and setting on one of our courses somewhere in the world.”
Sending our campus to you: Branch campuses
The fourth, final, and most extreme tributary when it comes to the international program revenue stream involves universities building permanent physical branch campuses in new countries – a model that reveals how completely some institutions have restructured themselves around international revenue extraction. This approach represents the ultimate commitment to international programming: the whole campus experience and related support structures are literally exported to new settings to secure long-term revenue streams in foreign markets – something akin to higher education’s version of an embassy.
Institutions pursuing this strategy have made massive capital investments that lock them into international revenue dependency for decades (like NYU Abu Dhabi). One vice president I spoke to contrasted developing branch campuses with the shorter-term strategies like study abroad and international recruitment:
The difference is many universities are working or are going out there in the world and they recruit students for the next semester, and it is not worth it. We go and we plant the seed, we work, we keep going. We keep going until we know that those results are going to be seen later.
Foreign governments actively court these partnerships, recognizing American universities as reliable sources of educational credibility and economic investment. The financial success of these ventures has created a dangerous cycle. Colleges and universities – oftentimes smaller schools without large bureaucratic obstacles – become increasingly dependent on international revenue streams. These partnerships often involve significant financial guarantees from host governments, creating mutual dependencies that risk prioritizing economic relationships over educational outcomes.
As one professor revealingly boasted, “Harvard could not do it, Yale could not do it. Our small Catholic institution did it. I mean, that is a huge deal!” When religious universities brag about successfully exporting their brand abroad, we must ask questions of the system’s propensity for transforming education into a global commodity market.
Conclusion
When university presidents compare student recruitment to gambling winnings, the system we’ve designed has clearly moved “from mission driven to margin obsessed” (as the subtitle of my book contends). The vulnerability this creates is painfully obvious when geopolitical tensions and visa restrictions threaten to cut off these revenue streams, leaving institutions scrambling to fill budget gaps they had grown dependent on international tuition to cover.
To be sure, the values and benefits of international programming still played a large role in how schools talked about its tributaries. One professor I met when writing Capitalizing on College went so far as to suggest that international programs offered a corrective to Western colonialism:
I am not sure it sinks in that internationalization does not mean we are going out into the world and we are saving it, which is such an American thing… I think the world has a lot to offer the United States. Internationalization has to be an exchange – let’s talk – which means understanding somebody’s culture, opening your head, not just your door.
But behind closed doors, administrators at all the schools I visited admitted some version of a deeper narrative: that the drumbeat of western extractive technologies continued, only now targeting student dollars rather than natural resources. The method had evolved, but the underlying logic remained unchanged – drawing wealth from international markets to sustain American institutions. The system's financial incentives had turned genuine educational exchange into a sophisticated revenue collection mechanism, ensuring that even well-intentioned efforts at internationalization served primarily to subsidize institutional operations.
*Be on the lookout for Part Two in which we will dive deeper into strategy and what the future holds for international students in American higher education.
Extra Edge
Issue Soundtrack: Distant Places Pt. I by Katia Labèque, Marielle Labèque, Bryce Dessner, and David Chalmin
Distributed Progress: This post is also appearing on the Substack Distributed Progress where my friend and colleague, Boston College professor Chris Glass, “explores how we can understand, expand, and distribute progress across the shifting landscape of mobility, technology, and geopolitics.” Be sure to check it out and subscribe!
Visual Scholarship: I find that images can sometimes unlock paths of learning beyond words alone. I invite you to explore this collection of helpful graphics that were created to accompany some of my writing.
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