Demand for American degrees is sinking

Mint

29-07-2025

SOME OF AMERICA'S most valuable companies were built by people who came to America as students. Elon Musk was born in South Africa and lived in Canada before studying physics at the University of Pennsylvania. Patrick and John Collison moved from Ireland to attend MIT and Harvard, respectively, before founding Stripe, a digital payments company. All told, more than half of America's billion-dollar start-ups were founded by at least one immigrant; a quarter have a founder who arrived as a student.
That pipeline of talent is now under heavy pressure. On May 22nd the Trump administration abruptly stripped Harvard University of its ability to enroll foreign students. A judge blocked the move the following day. But the administration only tightened its squeeze: on May 27th it suspended all new visa interviews for foreign students hoping to study in America. Officials say the pause is temporary. The damage might not be.
Attracting global talent has long been one of American academia's greatest strengths. The country draws more international students than any other; over the past two decades the share of foreign students has nearly doubled, reaching almost 6% in 2023 (see chart 1). Most pursue degrees in fields such as science, engineering and maths. Nearly a third come from India; a quarter from China.
America's top private universities attract the lion's share of foreign talent (see chart 2). International students make up 14% of the intake at the country's 158 most selective research institutions—more than double the national average. At the dozen 'Ivy-plus" universities—including the Ivy League and peers such as Stanford and MIT—the share reaches 28%. Columbia and Harvard, two institutions that President Donald Trump has recently targeted in his broader assault on elite universities, rely heavily on international enrolment, at 40% and 28% respectively.
Public universities, although less exposed in terms of headcount, face other risks. They tend to depend more on foreign tuition, which is often several times higher than the rates charged to local students, and lack the endowments that cushion private institutions.
Prospective students are already looking elsewhere. Studyportals, an online directory for degree programmes around the world, says clicks on American courses are now at their lowest level since the covid-19 pandemic (see chart 3). Weekly page views halved between January 5th and the end of April. First-quarter traffic to American undergraduate and master's degrees was down by more than 20% year on year; traffic to PhD courses fell by a third. The biggest drop was from India, where interest fell by 40%. The data suggest that British universities would be the most likely beneficiaries.
The financial stakes are high. In the 2023-24 academic year foreign students added $43.8bn to America's economy, according to the National Association of International Educators, a non-profit—mostly in Democratic-leaning areas (see map). They also supported jobs at universities and in other sectors, such as food services and health care.
But the heaviest cost to America will be in talent. Around three-quarters of international PhD students say they intend to stay in America after graduating. Blocking the next generation of students may punish the Ivies. Over time, though, it is America's edge in science, business and innovation that will suffer.