A Dean’s Case For International Students

“Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one’s lifetime.” — Mark Twain,  Innocents Abroad, 1869.

Robert Bruner, dean of the University of Virginia's Darden School of Business

Robert Bruner, dean of the University of Virginia’s Darden School of Business

Swept into the miasma of debates over U.S. immigration policy are those who visit the U.S. legitimately, particularly international students. Just as some claim that immigration denies jobs to U.S. citizens, some argue that international students deny places in our colleges and universities to U.S. citizens. If so, then why should we recruit and make accommodations for these students? In particular, why should Darden do this? The short answer is that it sustains our educational mission, it is sound economics, and it is consistent with America’s highest values. Let me explain.

An Overview

At the outset, you must understand that contrary to the claims of the staunchest nativists, attendance by international students hardly constitutes a tidal wave. In the 2011-12 academic year, international students were 3.7% of all students enrolled in U.S. institutions of higher education. In 2012-13, international students comprised 14.2% of all students enrolled in U.S. B-schools.

Since 2002, the volume of people sitting for the Graduate Management Admission Test (GMAT) in the U.S. has declined 15%; all demographic indications are that this trend will continue. However, the volume of international test-takers has more than offset this decline. For instance, Asian GMAT examinees increased 11% over the last five years. Darden saw a 21% increase in international applications this year with just a 1% increase in domestic applications. Student mobility is rising. No surprise: as markets liberalize and aspirations rise, applications by international students (particularly from the emerging economies) have increased to offset the declining application volume from the U.S.

“But,” you may ask, “why should they want to come to the U.S.?” There are over 13,000 institutions in the world that award degrees in business. Applicants enjoy an enormous range of choice. The appeal of American schools is summarized in one word: quality. A passel of metrics point to the prominence of U.S. higher education, including the count of Nobel Laureates, the Shanghai Jiao Tong research rankings, and international b-school league tables. Applicants take notice. The market for university degrees is fairly efficient.

America’s higher education of international students lifts the economy. A recent report estimated that international students contribute $29.8 billion to the U.S. economy—of that, about 28% or $8.4 billion is supported by U.S. sources, but that still leaves a very healthy $21.4 billion net contribution to America’s GDP. A report by NAFSA found that “more than 60% of all international students receive the majority of their funds from personal and family sources. When other sources of foreign funding are included, such as assistance from their home country governments or universities, over 70% of all international students’ primary funding comes from sources outside of the United States.” And this estimate of net benefits probably understates the contribution of foreign students to the U.S. economy because it ignores so-called “multiplier effects”—an increase in GDP greater than the initial spending.

The U.S. has been running consistent deficits in the balance of trade since 1980, owing to large imports of oil and consumer goods. These trade deficits spawned a plethora of problems including a weakening dollar, inflation, flows of “hot money,” capital market volatility, and disputes with trading partners. Educating international students helps to stem the trade deficits–it’s an export of educational services and a smart trade strategy for offsetting what we buy from the world. As one of my colleagues says, “Other countries sell us cars and we train their leaders – which one of these seems like the smarter strategy?”

International Students at Darden

This brings us to Darden’s place in all this. We recently enrolled Darden’s newest full time MBA graduating class (2015) from 37 countries. And 37% of the 2015s were born outside of the U.S. In the 2012-13 academic year 33% ofall Darden students were international (I dislike “foreign” because of its association with a host of prejudices). The vast majority of the top 100 global business schools report international percentages at similar or higher levels.