US universities likely to lose $20,000 per student on new visa rule

Uncertainty keeping Indian students from paying admission, first-year fees

Parth Mehta (name changed) has decided not to pay his admission and first-year fees of $22,500 to a leading university in the United States. Mehta feels that it doesn’t make sense to pay the fees till he gets his student visa and knows that he will be able to stay and study in the US.

Overseas education consultants in India say that many students who have got admission to US universities and were supposed to join them in the fall semester, feel exactly the same way. The reluctance to pay the fees comes in the wake of the US government order stipulating that foreign students attending only online classes would have to leave the country. 

Experts believe that the immediate loss of revenue for US universities would be to the tune of roughly $20,000 or Rs 15 lakh per foreign student. In a typical year, students start applying for their visa at this time and also pay the first tranche of their fees.  

“Students are confused and apprehensive. If universities are asking them to study online, then students are asking why they should pay right now. Plus, many students who have applied for admission are now uncertain about being able to go to the US after the Immigration and Customs Enforcement (ICE) order,” said Rohit Sethi, director at ESS Global, an overseas education consultancy firm.  

Top US universities like MIT and Harvard have already sued the US government over the ICE order. 

“On Monday, a division of ICE announced that it will not permit international students on F-1 visas to take a full online course load this fall. In response, MIT and Harvard jointly filed a suit against ICE and the US Department of Homeland Security (DHS) in the federal court in Massachusetts. In the lawsuit, we ask the court to prevent ICE and DHS from enforcing the new guidance and to declare it unlawful,” MIT told Business Standard in an email response.

Others like the University of California, Berkeley, are also planning to take the legal course. “The University of California system, headquarters for all campuses in the UC system, plans to sue the federal government over this issue,” the varsity told Business Standard.

At a time when the state funding of US universities and overall enrolments have been hit, asking foreign students to leave the country in cases where their classes are entirely online has many repercussions.

On one hand, there is the public health risk of taking in-person classes, and on the other, jittery foreign students are having second thoughts about joining.

Budget projections suggest Berkeley will take a hit of $240 to $340 million in revenue, depending on state funding, fall enrollment and other factors, the university told Business Standard. “Students are not willing to pay any money except for application fees worth $200-300 due to the uncertainty. I won’t be surprised if students change their study destinations,” Sethi of ESS Global added.

“There could be an immediate cost impact of Rs 15 lakh on US varsities. It is logistically impossible to move such a large number of foreign students. Moreover, students will want to transfer to those universities which are offering blended and hybrid classes, or those that are opening campuses,” said Sumeet Jain, co-founder and higher education expert at Yocket, one of the largest networks for study abroad aspirants.

The international students market in the US is pegged at around $40 billion. Foreign students are a major source of revenue for universities, and the fees for international students are often twice that for domestic ones. On an average, Indian students pay Rs 30-40 lakh to study in the US, Jain said.

Among foreign students, Chinese and Indians form the bulk of the crowd. According to the Open Doors Report, 200,000 Indian students arrive in the US every year. At MIT, Indian students account for four per cent and 10 per cent of the undergraduate and post-graduate programmes respectively, while at UC Berkeley, they constitute 10 per cent of the total number of students, which is second only to China.

US varsities are now reaching out to foreign students and offering them fee waivers to retain admissions.

But that may not be enough. Consultants say that the fact that other overseas education destinations like UK, Australia, New Zealand and Canada are allowing students to stay on and attend online classes, could work against US varsities. “Many could start looking at these destinations more favourably in the next admission session,” said Sethi.

Meanwhile, with final year exams at Indian universities unlikely to be completed before September, students applying at overseas universities are in a fix and have begun approaching campuses for delayed joining dates.

Countries like the UK have stolen a march over US universities in this regard too. “Admissions have been deferred by many UK campuses till the first week of December, but not by US universities,” Sethi said.