Milking the Tuition Cash Cow

The reality is that out-of-state and international students bring in more money per student on average for all schools — public and private — when it’s all said and done. When budgets get tight, universities aren’t shy to look beyond state and national borders to help their bottom lines.

Ask any admissions counselor about the role of international students and just about all will respond in the same way. The thousands of students from China, India, South Korea, Canada, Saudi Arabia and dozens of other nations who come to the U.S. every year bring unique perspectives to schools’ student bodies while enhancing the breadth of talent and diversity.

Ask the same question about out-of-state students and the responses will likely be more nuanced, depending on whether the institution is private or public. Private schools levy the same tuition sticker price on all students, regardless of where they originate. Public schools often charge two to three times as much for students coming from out of state than they do for in-staters.

A September report from the Brookings Institution found that nearly all flagship state universities across the country have increased their share of out-of-state students during the past two decades, at the expense of in-staters. The share of out-of-state students at these 50 schools has climbed by an average of 55% since 2002, and all but the University of North Carolina at Chapel Hill and the University of Delaware have seen an increase.

The reason? According to Aaron Klein, a senior fellow of economic studies at Brookings, shortcomings in government support have spurred universities to look beyond state borders to make up for the missing money.

“I hypothesize that schools are caught in a cycle where they compensate for the decline in state funding by enrolling more lucrative out-of-state students,” Klein wrote. “Increased recruitment of out-of-state students, in turn, may lead to less local political support and further erosion in state funding.”

A pair of interviewed admissions counselors told Volt the results of Klein’s studies are not surprising, given most universities’ need for money and the financial value that out-of-staters and international students create.

At Barnard College, an all-women’s school of approximately 2,800 students in New York that’s directly affiliated with Columbia University, Ruby Bhattacharya is one of just a few admissions counselors nationwide to offer need-based scholarships to international students. Bhattacharya, the school’s director of international recruitment, estimated that only 100 of the roughly 5,000 colleges and universities across the United States offer non-merit based scholarships to students from abroad. Decreasing financial accessibility even further, fewer than 30 schools, of which Barnard is one, meet full demonstrated need for all students regardless of citizenship.

“Financial aid tends to be very limited for international students across the U.S. as a whole,” Bhattacharya said. “Universities that offer need-based aid for U.S. citizens or permanent residents are eligible for federal funding from the U.S. government. International students are not eligible for that kind of funding and, because of that, less institutions make funding available for students from abroad.”

Although Barnard incurs the extra costs to diversify its student body, many other schools count on their diversity track records to draw out-of-staters and students from overseas.

UT Arlington’s College of Engineering has seen a steady increase in demand from out-of-state students this fall, exceeding even pre-COVID-19 numbers.

The University of Texas at Arlington has seen its international student head count jump 32% since the fall of 2019, notching similar figures for its U.S.-based out-of-state population. UTA has one of U.S. News & World Report’s highest diversity rankings for 2023, with a student body that’s 13% African American, 12% Asian, 32% Hispanic, 15% International and 24% White. Even so, the school’s in-state tuition eclipsed $12,000 for the first time this school year, and its out-of-state tuition hit a record high near $33,000, just as Texas state funding for schools has reportedly fallen short in recent years.

Lin Larson, director of student recruitment in UT Arlington’s College of Engineering, has seen a steady increase in demand from out-of-state students this fall, exceeding even pre-COVID-19 numbers. More than 98 countries are represented on the UT Arlington campus, with 65 nations in the College of Engineering alone.

“Anecdotally, when asked why international students select UT Arlington, they say cost is important, but more so, how the university embraces them and where they’re from,” Larson said. “Students tell us they feel like they fit in because they see others who look like them.”

Have the rising costs dissuaded more students from attending? Larson said the addition of a vibrant international student center in recent years and weekly gatherings in the Student Center help make up for the costs by giving students more resources to feel at home. For example, a weekly event called Global Grounds introduces students to other cultures and customs through tea, sweets and entertainment.

“Diversity is something UTA prides itself on, and it’s been a huge selling point for us,” Larson said. “It leads to better understanding and acceptance, which benefits everyone.”