How U.S. Policies Toward International Students Could Threaten Economic Growth

International student enrollment supports billions in U.S. economic activity and hundreds of thousands of jobs. Restrictive immigration policies could harm universities, labor markets, and long-term innovation.

6/6/20252 min read

The Economic Power of International Students in the U.S.

The United States has long been a magnet for international students. In the 2023–2024 academic year, over 1.1 million international students contributed approximately $43.8 billion to the U.S. economy, supporting more than 378,000 jobs, according to NAFSA: Association of International Educators.

This economic impact extends beyond university campuses. International students support jobs in housing, food services, transportation, insurance, and retail. For many universities, especially public ones, international tuition has become a financial lifeline amid declining state and federal funding.

Political Uncertainty and the Trump-Era Impact

Recent statements and proposed policies by Donald Trump have created new uncertainty for international students. Restrictions on student visas and negative rhetoric have already discouraged applicants and led some to choose other countries over the U.S.

Economist Giovanni Peri, director of the Global Migration Center at UC Davis, noted that his program has already lost international students due to concerns about visa approvals and funding stability. Some researchers have avoided international travel for fear they wouldn't be allowed to re-enter the U.S.

Why International Students Matter to the Economy

International students don’t just pay tuition—they drive innovation and long-term economic growth. Research shows that foreign graduates are four times more likely than U.S. citizens to start new businesses in the U.S. Many also fill critical jobs in high-growth sectors such as technology, engineering, and scientific research.

Cornell labor economist Michael Lovenheim explained that highly educated foreign workers boost productivity, wages, and GDP growth. Their economic contributions extend well beyond the campus gates.

Broader Risks to Universities and the Labor Market

Restricting international enrollment could have wide-reaching effects:

Fewer startups and entrepreneurial ventures
Declines in university research output and funding
Slower growth in local economies around college towns
Gaps in the labor market, especially in STEM fields

In a previous study, Peri found that only 20% of international Master’s graduates remained in the U.S. for at least two years due to visa constraints—despite bipartisan support for reforms like green cards for STEM graduates.

Rethinking the Balance: Global Talent vs. Domestic Access

Some scholars, like Princeton professor David Bell, have called for a more balanced national conversation about international enrollment. While expanding foreign student populations can fuel innovation and global collaboration, it may also raise questions about access and support for American students.

Bell argues for a more thoughtful approach: maintaining or slightly adjusting international enrollment levels, rather than aggressive policy reversals that may cause long-term harm.

Long-Term Implications for the U.S. Economy

If anti-immigration policies continue, the U.S. risks losing its global edge in education, science, and entrepreneurship. Economists warn that the economic impact could be visible in just two to three years.

As Michael Lovenheim puts it, the benefits of international students are “positive and large.” They support economic growth, bring diverse talent, and reinforce America’s leadership in global innovation. Discouraging them could reduce productivity, shrink the labor force, and undermine national competitiveness.