The current state of one of America’s most important exports – international education

Richie is the founder of Young American Expat and its other ventures. He is also an international trade expert & a recognized thought leader in the space, having authored or interviewed in 100 + publications in the realm of trade and expat topics such as Forbes & Entrepreneur. 

Originally written for The PIE News September 2017

One sector that normally isn’t in the spotlight with respect to international trade is international education, writes Richie Santosdiaz, an expert in economic development and international trade, and founder of Young American Expat.  People generally see exports and international business in terms of tangible products like manufactured goods (such as cars or food). With respect to services, people generally think of the financial sector. International education doesn’t commonly appear in conversations on trade, exports or international business. But it should. 

International education is big business. According to data from the Institute of International Education, nearly one million international students are now enrolled in US universities, and contribute around $35.8 billion to the US economy.

The vast amounts of foreign direct investment US universities have made overseas also shows the importance of international education for the US economy. Taking a step beyond just affiliating themselves or forming partnerships with overseas universities. For example, the Middle East has benefited from investments from the American HE system, including New York University setting up an overseas campus in Abu Dhabi and Georgetown University setting up one in Qatar.


Enrolment: A changing American landscape
It is not news that college tuition in the USA is expensive, with the College Board saying the average cost of tuition and fees for the 2016–2017 school year is $33,480 at private colleges. This has created what many are calling a student loan crisis, which some argue could be worse than the 2008 financial crisis. Many students in America are not able to afford tuition and have no choice but to use loans, which a significant proportion of students are not able to pay back.

This has even had some wondering if college is worth it at all. According to the National Student Clearinghouse Research Center, undergraduate and graduate fall-term enrolment declined by 1.4% last year, to 19 million students. In comparison, in 2011 enrolment hit peaks of 20.6 million. Universities in America, more so than ever, have had to rely on international students to help keep enrolment up.

Outside competition
The USA has made gains from its strong education sector, which has benefited from international education exports. Even those with little background in the international education sector will realise that the USA is home to several global leading universities like Harvard, Yale and Princeton.

However, the USA is competing with the UK and many others in attracting international students. Industrialised English speaking nations like Canada, Australia and Ireland have their own prestigious universities, which rank on par with those in the USA. These countries are seeing much growth in their international education sector and are ambitious towards expansion.

According to the Australian Bureau of Statistics, international education had a record-breaking 2015-16 in Australia, making the nation more than A$20 billion and confirming international education’s status as the country’s third-biggest earner and becoming its largest service export.

Ireland last year set a goal to make their international education sector worth €2 billion by 2020.

Also, international student enrolment at universities in Canada, Australia and Ireland has been improving for several years.

In Canada some universities have seen a huge surge in applicants, to the extent that they have to turn many qualified students down, due to a limited source of funding and places.
Additionally, many non-English speaking countries – both in industrialised nations and also emerging economies – now offer a significant proportion of their programs, particularly in postgraduate studies, in English. These include the likes of some of the best universities in the world, such as IESE and IE Business School in Spain and HEC Paris offering MBAs and other business degrees entirely in English.

Current political climate
Many countries, such as Canada, Australia and Ireland expect to see their enrolment increase even more given the past year with the current political climate in the USA and the UK.

In the US, President Trump has shown the world an “America First” approach, which is being felt with regards to international business and wider international trade. Headlines were made recently as President Trump reportedly floated potential cuts to the J-1 exchange visa program.

Meanwhile, countries like Ireland have actually made it more appealing for international students to work post-graduation. Recently Ireland doubled the time graduates can remain and find work after graduation, from 12 months to 24.

For the US, President Trump’s stance on immigration is not appealing to many considering the US for study. He may not be targeting international students per se, but his policy isn’t helping a sector that has been facing challenges of growing global competition.
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Perhaps the growth of other nations is a wakeup call to make the international education sector great again.

​-Richie Santosdiaz