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Universities rely on foreign tuition due to inadequate state funding, expert says
The number of newly enrolled international students declined by 17 percent during the recent fall semester, according to the Institute of International Education’s Fall 2025 Snapshot on International Student Enrollment.
This drop has exposed universities’ heavy financial reliance on foreign tuition dollars, according to Shaan Patel, CEO and founder of college admissions company Prep Expert.
Unlike the nearly 40 percent of American students who rely on federal aid to cover higher education expenses, international students do not have access to these benefits and pay their tuition in cash, making them infinitely more attractive to universities, Patel told The College Fix via email.
“Many universities have relied heavily on international tuition revenue due to the inadequacy of state funding to support increased costs. Ultimately, however, the problem is not with foreign students but with the universities’ over-reliance on them,” he said.
Patel added that American families “should not be forced to pay away their children’s place in the state institution system because of support for foreign students. The slowing of the number of foreign students enrolling will force universities to take a long, hard look at their finances.”
Schools with larger endowments such as the University of Pennsylvania and Columbia, whose student bodies are approximately 20 percent and 40 percent international, respectively, have been able to keep their heads above water financially, even outright refusing federal dollars.
Yet broader structural problems remain. Since 1980, college tuition and fees in the U.S. have increased by 1,200 percent, prompting critics to accuse universities of inflating costs and prioritizing profits over affordability for American families.
Patel said that while “foreign students provide a degree of support to graduate STEM programs, […] we cannot depend upon them as the answer to our systemic challenges. If we want to create a stronger STEM pipeline, we need to invest more in K-12 education in the United States.”
Universities are not doing more to make college more affordable for Americans “because cutting costs requires a reconsideration of the entire structure of modern universities,” Patel said, adding that the conversation itself is “highly unpopular” among administrators.
Expanding administrative structures, new programs, amenities, and compliance staff have fueled exponential growth, Patel said.
“To summarize, the primary motivation behind a university’s exponential growth is related to the financing available via Federal Financial Aid (Student Loans),” he said.
He noted that while the Trump administration has tightened the H-1B visa program, many Americans remain skeptical about the broader economy. Today, over 20 percent of the U.S. workforce is foreign-born, a share projected to keep rising, even as many American-born workers face unemployment.
Patel said that to mitigate this issue, Americans should have greater access to information regarding how much non-resident tuition helps finance universities.
He also suggested “better enforcement of international student visa compliance” and “a reasonable cap on the number of international students who attend public post-secondary schools.”
“Universities and other institutions of higher education in the U.S. ought to remain open and embracing of talented people from outside of the U.S., but at the same time, not at the cost of U.S. citizen students being able to attend,” he said.
Former Department of Education Press Secretary Angela Morabito echoed these sentiments in an interview with Newsmax.
“The difference between a college and a hedge fund with a football team is looking thinner and thinner these days,” and colleges need to start “actually cutting costs so students don’t have to take on so much debt,” she said.
At less wealthy institutions, the impact has been especially severe. As a result of decreased foreign student enrollment, schools like the University of Central Missouri are facing bankruptcy, according to AP News.
International students historically accounted for nearly 25 percent of the small, Midwestern university’s tuition revenue before Trump’s new policies.
“We aren’t able to subsidize domestic students as much when we have fewer international students who are bringing revenue to us,” UCM’s president, Roger Best, told AP News.
