International student enrollment drops because visa policies tightened. Universities act shocked that making it harder to enter a country results in fewer people entering that country. Groundbreaking stuff.
These institutions spent decades using foreign students as premium-priced revenue streams. Charge them triple. House them in dorms built during the Nixon administration. Call it cultural exchange. The business model worked until someone in Washington remembered that visas are not supposed to be automatic.
Colleges now face a financial shortfall. They will not lower administrator salaries. They will not cut the budget for the new wellness center with the sparkly fountain. They will raise tuition on domestic students instead. Your kid gets to subsidize the gap left by fewer students from overseas. You're welcome.
The reports show enrollment will fall this fall. Past tense meeting future tense in the same sentence. Journalism at its finest.
University CFOs are currently updating their spreadsheets. They are realizing that when you build your budget around foreign students paying full freight and those students stop coming, the math stops mathing. This is the same level of financial foresight that brought you the student loan crisis. These people managed billion-dollar endowments.
Retail traders will somehow find a way to lose money on this news. They will short education stocks that already dropped. They will go long on for-profit colleges because those sound scrappy. They will do whatever generates the maximum loss with the minimum research time.
The schools will survive. They always do. They will hire consultants to solve the international student problem. Those consultants will cost more than the missing tuition revenue. The consultants will recommend building a new international student center. The cycle continues.
Fewer international students means fewer people paying sticker price to learn that their degree could have been a YouTube playlist.
Photo by Kelly Sikkema on Unsplash
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