Published on People Move

Foreign Students Strengthen the US Economy

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Foreign students who attend U.S. colleges and universities on F-1 visas bring billions of dollars each year to local economies. In order for their economic benefit to be realized through increased local jobs and investment, however, regional leaders need to capitalize on their connections to fast-growing foreign markets. This is the key finding of a new Brookings report I released today.

The Geography of Foreign Students in U.S. Higher Education: Origins and Destinations is the first ever metropolitan-level analysis tracking the local origins, size and growth rate of the foreign student population in U.S. higher education.  To date, research on foreign students in the U.S. has focused on national trends with little discussion of the impact this group has on individual metropolitan areas. Based on data from 2008 to 2012, the report identifies the 118 metro areas with the largest numbers of foreign students and measures their monetary contributions to these regions.
America’s renowned educational institutions attract hundreds of thousands of students each year from around the world. Just last year, a record 21 percent of the world’s students who studied abroad did so in this country.  As we kick off a new school year, it’s important to understand how students from fast-growing foreign nations can help build global connections while shoring up our local economies and businesses. This report provides the data to do that.
Between 2008 and 2012, foreign students contributed $35 billion in tuition and in living expenses to 118 metro areas that are each home to at least 1,500 students.
Just 45 percent of these students, however, extended their visas and found employment after graduation through the optional practical training (OPT) program. OPT allows foreign students on F-1 visas to work between 12 and 29 months after they graduate from a U.S. higher educational institution.  New York and Honolulu had the highest percentage (75 percent) of graduates working for a local employer. Seattle, Miami and Las Vegas also ranked high for students who remained in their areas to work after graduating.
Foreign students are a significant source of earnings for U.S. metro economies in several ways.  First, they open up markets in their home cities, facilitating trade and foreign direct investment. In addition, they infuse revenue into local communities and they help fill demand for jobs requiring specific skills in local labor markets.
While large metropolises such as New York and Los Angeles have high numbers of foreign students, larger universities in other less-populated areas have the most significant concentrations of these students. Ithaca, NY (Cornell University) tops the list with 71.2 F-1 students per 1,000, compared to a national average of 22.4. Boston, MA; Santa Barbara, CA and Corvallis, OR also rank at the top of the list. The five U.S. metro areas experiencing the fastest growth in foreign students between 2008 and 2012 are Corvallis, OR (203 percent); Dayton, OH (202 percent); Tuscaloosa, AL (145 percent); Louisville, KY (125 percent) and Eugene, OR (106 percent). 
Two-thirds of foreign students are studying STEM or business, management and marketing fields, compared to 48 percent of U.S. students. STEM fields are the most popular with 37 percent of all F-1 students seeking degrees, while business management and marketing account for 30 percent of all F-1 students. Hyderabad, India is the top source of STEM foreign students. Beaumont-Port Arthur, TX, home of Lamar University, has the highest share of its foreign students pursuing STEM degrees
Between 2008 and 2012, China, India, South Korea and Saudi Arabia sent the most foreign students to the US to study.  Seoul sent more F-1 students than any other city, more than 56,000 from 2008-2012 (5 percent of all students). Beijing, China; Shanghai, China; Hyderabad and Riyadh, Saudi Arabia also top the list of source cities, each sending between 17,000 and 50,000.
Increasingly, U.S. colleges and universities are educating the world’s business, scientific and political leaders of the future. Metropolitan leaders should capitalize on this trend to strengthen their position in the global marketplace by giving local employers access to a larger pool of workers with valuable skills and knowledge already living in their areas.
America’s business and community leaders need to develop better strategies to retain these students. The Brookings report offers a two-pronged approach to help these leaders realize the full benefit of foreign students’ local presence.


Neil Ruiz

Senior Policy Analyst and Associate Fellow, Metropolitan Policy Program, Brookings

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