The Economic Benefits of International Education to the United States: A Statistical Analysis

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1 The Economic Benefits of International Education to the United States: A Statistical Analysis NAFSA estimates that foreign students and their dependents contributed more than $12.87 billion to the U.S. economy during the academic year. This conservative figure is based on tuition figures from the College Board, enrollment figures from the Institute of International Education's Open Doors 2004 report, living expenses calculated from College Board figures and analysis of the data by Lynn Schoch and Jason Baumgartner at Indiana University Bloomington s Office of International Services. NAFSA's annual Economic Impact Statements estimate the amount of money foreign students bring to the U.S. to support their education. This report does not rely on a multiplier effect. Although this might provide a more accurate estimate of actual economic impact, there is no consensus on the appropriate size of such a multiplier. Along with our partners at the Institute of International Education, the College Board, and Indiana University, we are committed to continuing efforts to improve our data and methodology. By any measure, international education makes a significant contribution to the U.S. economy. Important Data on International Education Exchange to the United States for the Academic Year: 572,509 foreign students studied in the United States, approximately 4.6 percent of total enrollment in U.S. colleges and universities. They brought more than $12.87 billion into the U.S. economy. The total net contribution to the U.S. economy from international students increased negligibly (less than.1 percent) from the previous year, a result of a 2.4% decline in foreign student numbers, offset by inflation and a slight increase in the overall level of U.S. financial support. The top ten countries of origin of foreign students in the United States were (in descending order): India, China, Republic of Korea, Japan, Canada, Taiwan, Mexico, Turkey, Thailand and Indonesia. University of Southern California hosted the largest number of foreign students followed by Columbia University, Purdue University, New York University and University of Texas at Austin. The New York and Los Angeles metropolitan areas led the nation in numbers of foreign students with 52,424 and 35,062 respectively. The Boston metropolitan area ranked third with 24,266 students. Business and management, engineering, and mathematics and computer science continued to be the top fields of study for foreign students in the United States. (Enrollment figures from the Institute of International Education s Open Doors 2004 report, found at:

2 Michigan Total Number of Foreign Students: 22,277 Part 1: Net Contribution to State Economy by Foreign Students ( ) Contribution from Tuition and Fees to State Economy: $280,697,000 Contribution from Living Expenses: $341,019,000 Total Contribution by Foreign Students: $621,716,000 Less U.S. Support of 30.7% - $190,607,000 Plus Dependents' Living Expenses: + $17,313,000 Net Contribution to State Economy by Foreign Students and their Families: $448,422,000 Part 2: Contribution to State Economy by Foreign Students' Dependents ( ) Spouses' Contribution Percent of Married Students: Percent of Spouses in the U.S.: Number of Spouses in the U.S.: 2,932 Additional Expenses for a Spouse: (% of student living expenses) 85.0% 25.0% Spouses' Contribution: $11,698,000 (No. of spouses x 85% x 25% x student living expenses) 13.2% Children's Contribution Number of Couples in the U.S.: 2,932 Number of Children per Couple: 0.6 Number of Children in the U.S.: 1,759 Additional Expenses for a Child: (% of student living expenses) 20.0% Children's Contribution: $5,615,000 (No. of couples x.6 x 20% x student living expenses) Net Contribution to State Economy by Foreign Students' Dependents: $17,313,000 Part 3: Foreign Student Contribution from Tuition/Fees and Living Expenses ( ) Institution and City # of Foreign Students Tuition Living Expenses Less U.S. Total and Fees and Dependents Support Contribution (thousands) (thousands) (thousands) (thousands) Adrian College, Adrian 13 $195.0 $197.9 $179.5 $213.3 Albion College, Albion 22 $437.0 $325.5 $349.1 $413.4 Alma College, Alma 14 $242.2 $301.4 $248.2 $295.4 Alpena Community College, Alpena 4 $13.4 $77.5 $5.1 $85.8 Andrews University, Berrien Springs 529 $7,120.0 $8,617.2 $3,880.3 $11,856.8 Aquinas College, Grand Rapids 13 $213.2 $196.2 $74.7 $334.8 Baker College of Muskegon, Muskegon 6 $41.8 $69.3 $3.9 $107.3 Baker College of Owosso, Owosso 9 $62.8 $100.0 $6.0 $156.7 Bay de Noc Community College, Escanaba 1 $3.7 $12.0 $0.9 $14.8 Calvin College, Grand Rapids 357 $5,418.6 $5,577.2 $3,528.0 $7,467.8 Center for Humanistic Studies Graduate School, Detroit 1 $12.6 $12.6 $4.4 $20.8

3 Central Michigan University, Mount Pleasant 408 $4,119.7 $6,044.5 $2,470.3 $7,693.9 Cleary University, Ann Arbor 65 $649.5 $752.4 $213.0 $1,188.8 College for Creative Studies, Detroit 69 $1,152.9 $1,220.4 $29.5 $2,343.9 Concordia University, Ann Arbor 4 $62.8 $71.1 $43.0 $91.0 Cornerstone University, Grand Rapids 24 $305.0 $489.5 $141.5 $653.1 Cranbrook Academy of Art, Bloomfld Hills 18 $299.8 $328.3 $16.1 $611.9 Davenport University - Western Region, Grand Rapids 192 $1,762.6 $2,871.3 $633.4 $4,000.5 Delta College, University Center 45 $157.2 $529.4 $38.4 $648.3 Eastern Michigan University, Ypsilanti 1,033 $11,796.9 $17,301.0 $4,516.4 $24,581.5 Ferris State University, Big Rapids 312 $3,302.6 $5,254.4 $1,531.6 $7,025.3 Finlandia University, Hancock 28 $169.3 $392.5 $31.5 $530.4 Glen Oaks Community College, Centreville 9 $22.5 $105.9 $7.2 $121.2 Gogebic Community College, Ironwood 6 $16.6 $70.6 $4.9 $82.3 Grace Bible College, Grand Rapids 4 $32.8 $56.1 $32.0 $56.9 Grand Rapids Community College, Grand Rapids 103 $389.9 $1,195.7 $88.7 $1,496.9 Grand Valley State University, Allendale 172 $1,858.6 $2,617.3 $665.7 $3,810.2 Henry Ford Community College, Dearborn 257 $793.2 $3,023.6 $213.3 $3,603.5 Hillsdale College, Hillsdale 29 $421.3 $523.7 $431.4 $513.5 Hope College, Holland 42 $734.5 $663.7 $639.5 $758.7 Jackson Community College, Jackson 20 $48.5 $239.2 $16.1 $271.6 Kalamazoo College, Kalamazoo 24 $499.4 $442.7 $430.9 $511.2 Kalamazoo Valley Community College, Kalamazoo 135 $457.0 $1,614.7 $115.8 $1,955.9 Kellogg Community College, Battle Creek 87 $333.4 $1,040.6 $76.8 $1,297.2 Kettering University, Flint 104 $1,874.1 $1,125.0 $293.0 $2,706.0 Kirtland Community College, Roscommon 3 $10.3 $35.3 $2.6 $43.1 Lake Michigan College, Benton Harbor 337 $836.2 $3,211.7 $226.2 $3,821.7 Lake Superior State University, Sault St. Marie 360 $3,129.8 $4,500.8 $1,380.8 $6,249.8 Lansing Community College, Lansing 495 $1,634.0 $5,920.5 $422.2 $7,132.3 Madonna University, Livonia 135 $1,377.1 $1,678.4 $405.5 $2,649.9 Marygrove College, Detroit 19 $188.9 $225.7 $49.2 $365.4 Michigan State University, East Lansing 3,277 $39,989.5 $45,406.0 $29,978.2 $55,417.3 Michigan Technological University, Houghton 693 $8,872.5 $9,983.6 $4,107.2 $14,748.8 Mid Michigan Community College, Harrison 11 $42.1 $129.4 $9.6 $161.9 Monroe County Community College, Monroe 4 $10.3 $47.1 $3.2 $54.2 Montcalm Community College, Sidney 3 $9.5 $34.8 $2.5 $41.8 Mott Community College, Flint 49 $170.8 $576.5 $41.8 $705.5 North Central Michigan College, Petoskey 3 $9.8 $26.7 $2.0 $34.5 Northern Michigan University, Marquette 71 $481.2 $1,173.0 $211.3 $1,442.9 Northwestern Michigan College, Traverse City 28 $107.6 $400.4 $28.4 $479.6 Northwood University, Midland 201 $2,504.3 $3,266.2 $802.9 $4,967.7 Oakland Community College, Farmington Hills 875 $2,925.1 $10,465.6 $748.5 $12,642.3 Oakland University, Rochester 330 $3,727.5 $6,126.1 $2,357.0 $7,496.6 Olivet College, Olivet 43 $574.5 $599.1 $536.3 $637.3 Rochester College, Rochester Hills 24 $237.7 $375.9 $21.4 $592.3 Sacred Heart Major Seminary, Detroit 16 $126.0 $227.9 $125.7 $228.2

4 Saginaw Valley State University, University Center Saint Clair County Community College, Port Huron 353 $2,989.2 $5,462.8 $1,079.2 $7, $97.9 $334.9 $24.2 $408.6 Schoolcraft College, Livonia 155 $589.7 $1,853.9 $136.7 $2,307.0 Southwestern Michigan College, Dowagiac 75 $207.7 $897.1 $61.7 $1,043.1 Spring Arbor University, Spring Arbor 28 $411.6 $493.7 $164.3 $741.0 University of Detroit Mercy, Detroit 441 $5,514.6 $9,959.8 $2,525.0 $12,949.4 University of Michigan, Ann Arbor 4,583 $100,675.0 $100,158.4 $77,778.9 $123,054.5 University of Michigan: Dearborn, Dearborn 302 $4,487.1 $4,737.8 $1,453.0 $7,771.9 University of Michigan: Flint, Flint 32 $298.4 $459.1 $136.9 $620.6 Walsh College of Accountancy and Business Administration, Troy 96 $976.2 $1,401.7 $277.8 $2,100.0 Wayne County Community College, Detroit 51 $132.2 $600.0 $40.9 $691.3 Wayne State University, Detroit 3,271 $35,437.5 $38,713.7 $27,357.0 $46,794.2 Western Michigan University, Kalamazoo 1,726 $16,894.6 $35,388.7 $17,148.8 $35,134.6

5 Methodology: How We Compute Economic Impact We define economic impact as the amount of money that foreign students collectively bring into the United States to ay for their education and to support themselves while they (and in some cases, their families) are here. The goal of our economic impact formulas is to use data already collected for other purposes to provide a reasonable estimate of the economic resources that foreign students import to the United States to support their education here each year. The data sets used for these reports come from two sources: 1. The Institute of International Education s Open Doors 2004 report, funded by the Department of State, provides numbers of foreign students at universities and colleges throughout the United States during the academic year. In many cases, this data provide separate totals for undergraduate, graduate, and non degree students. 2. The College Board provides cost figures for tuition, living, and miscellaneous expenses at U.S. institutions for the academic year. The extensive data provided by these two sources (which collect it directly from surveys of the institutions involved) allow us to make our estimates sensitive to differences between institutions. However, there are still areas where our estimates and formulas could be improved. For example, we compute economic impact only for students reported in Open Doors. Universities that do not provide information to the Institute of International Education are not represented. Also, enrollment reports represent peak enrollment, and not necessarily enrollment levels throughout the year. Tuition, fees, living expenses, and dollar estimates are derived from College Board data collected on surveys completed by institutions every year. We try to make our calculations sensitive not only to differing costs at institutions, but differing costs for ESL students, undergraduates, graduate students, and students on practical training. Students on Practical Training: We assume these students earn enough in their U.S. jobs to pay living and educational expenses for the year, and so import no funds for their support. Therefore, net economic impact of students in practical training is zero. Undergraduates and English Language Programs: The number of undergraduate students at an institution is specified by Open Doors data. College Board data provide undergraduate tuition and fee amounts, on-campus room and board amounts, and miscellaneous expenses. These categories are sometimes broken down into averages for international, out-of-state, flat rate, and in-state, students. When multiple averages are available, we choose averages in the order given above. Economic impact of an undergraduate equals tuition and fees, plus room and board, plus miscellaneous figured at 50 percent of room and board, less U.S. support. We assume: (1) that spring enrollment figures are the same as the fall figures reported, (2) that all students are

6 enrolled full time for two semesters or three quarters a year, and (3) that students live on campus for the full year. Miscellaneous expenses, enumerated in College Board data, average about 40 percent of room and board expenses. We use a 50 percent figure as an approximation that includes all extra expenses except for travel. The percentage of U.S. support for an undergraduate is based upon the institution type. For example, research institutions (based on Carnegie code) provide on average 10.7 percent support for undergraduates; community colleges provide 7.8 percent for undergraduates.