Here's how much international students contribute to the U.S. economy

Washington Post

28-05-2025

As the Trump administration pauses new student visas in its battle to force change at the nation's elite universities, economists warn that the loss of international students would affect not just the schools that depend on their tuition but local and state economies, as well.
The more than 1.1 million international students who studied in the United States last year contributed nearly $44 billion to the U.S. economy during the 2023-2024 school year, according to the nonpartisan think tank National Foundation for American Policy — from $10 million in Alaska to more than $6 billion in California — and supported more than 378,000 jobs.
'Students don't just spend money paying tuition fees,' Nicholas Barr, a professor at the London School of Economics, said in an interview. 'They pay rent, they go to restaurants, they travel.'
States with high concentrations of universities in particular benefited from the economic impact of international students. The nearly 90,000 international students studying at the more than 250 colleges and universities in Texas during the last academic year contributed $2.5 billion to the local economy, according to NAFSA, the Association of International Educators. The 82,000 international students who studied in Massachusetts contributed an estimated $3.9 billion, while California, the state with the most international students, had nearly 141,000 international students contributing $6.4 billion.
The economic demands of international students leads to the creation of jobs, Barr said, whether it's extra staffing at local bars and shops or at the university itself, with extra personnel needed to handle the logistics of having more students.
A pause on student visas could have serious impact on 'everything from real estate to restaurants to pretty much any business you can imagine that gears toward consumers,' said Constantine Yannelis, an economics professor at the University of Cambridge in Britain.
'Local real estate markets are relying on renting to students. If there is a significant drop in the number of students, it will have a huge effect on the real estate market,' Yannelis said. 'Many local businesses, movie theaters, bars — there will be a drop in demand.'
The loss of these contributions is not something that universities can easily make up by accepting more domestic students, Yannelis said, because international students tend to pay more than their American classmates, who can benefit from in-state tuition and a wider range of financial aid. He predicted universities might have to cut back on course offerings or financial aid.
The long-term effects of fewer international students are not as easily measurable, Yannelis said. He grew up near the University of Illinois at Urbana-Champaign, hearing about the success story of one of the school's most famous alumni: Shahid Khan, a businessman and owner of the Jacksonville Jaguars. Khan attended the University of Illinois as an international student from Pakistan before going on to develop a more economical way to manufacture single-piece car bumpers with his start-up, BumperWorks, and taking over the auto manufacturing company Flex-N-Gate. He kept his businesses in the area, Yannelis said, creating many jobs and opportunities for locals. 'I'm worried about the long-term consequences,' he said. 'A huge portion of American entrepreneurs are international, and many of them started their careers as students in the U.S.'
Although the visa pause is temporary while the State Department weighs expanded guidelines for screening applicants' social media accounts, and other Trump administration efforts have been challenged in court — a federal judge temporarily blocked a ban on Harvard University's ability to enroll international students — the 'damage is already done,' Yannelis said. 'Even if all of these policies are reversed next week, we'd still have this cloud lingering over us because we've created an uncertainty around the U.S. being a top place for worthy talent.'
Barr was himself an international student, earning his doctorate in economics at the University of California at Berkeley as a Fulbright scholar. 'I don't think I would apply now because of the uncertainty,' he said, adding that he was sad for both the universities and the prospective students who will not be allowed to enjoy the same experiences he did.
'America is shooting itself in the foot big time,' Barr said.