— This is the script of CNBC's news report for China's CCTV on July 15, 2020, Wednesday.
The policy was withdrawn only a week after it was announced, one of the main reasons for the U-turn was that the opposition was too strong. While not everyone is in favor of the policy, some do argue that internet-only students do not need to enter the United States, and American higher education is overwhelmingly opposed to the policy. Apart from concerns about student safety and brain drain, the main reason is the fear that American schools could face a huge financial shock.
In the United States, international students, most of whom pay the full fee, provide a necessary source of tuition for many American schools. A sharp drop in enrollment would have a huge financial impact on U.S. schools. Many schools have seen significant income reductions and are at risk of closing in the wake of the epidemic. Public universities collected more than $9 billion in tuition and fees from international students in 2015, with 28 percent of their tuition revenue coming from international students, according to Self Score., but the average number of international students is just 12 percent. International students also contribute significantly to private universities. The National Foundation for American Policy, a nonpartisan think tank, estimated Monday that newly announced student Policy changes and other immigration changes could reduce the number of new international students on U.S. campuses by 63% this fall. According to the Wall Street Journal, the total number of international students in the U.S. for the 2018-2019 academic year, which includes the number of newly graduated students remaining in the U.S. as students, totals 1.1 million. International students contributed about $45 billion to the U.S. economy in 2018, according to the Commerce Department.
If we also consider the challenges that U.S. universities face in terms of funding sources, the policy is even more noteworthy.
One consequence of lower funding for higher education in many parts of the country has been higher tuition fees and a growing problem with student loans. And schools increasingly rely on self-financed students. Forty-one states spent less on average between 2008 and 2018, according to the Center on Budget and Policy Priorities.
After adjusting for inflation, spending per student fell by an average of $1,220, or 13%, with six states seeing declines of more than 30%.
The US budget deficit has been exacerbated by the epidemic, with the latest figures showing a $3tn deficit for the 12 months to June. The federal government's annual deficit as a percentage of the economy is likely to be the highest since the World War II. Future government funding for education may face some uncertainty. The Trump administration is pushing for schools to reopen, CNBC previously reported that as much as $245 billion could be needed to keep schools safe.
At the moment, American universities are looking for ways to cut costs. International students are an important source of increasing income, judging by the current decision to withdraw the policy, the authorities, after a reassessment of the pros and cons, have recognized the important contribution that international students made to the U.S. economy. We will keep an eye on this issue.