University Finances

John Derbyshire, at RadioDerb, is always entertaining but, like all of us, he sometimes wanders off into stuff he doesn’t understand.  Here is quote for his 2/17 podcast that went up on his website later:

Further down the news story reporting this we read that, quote:

More overseas Chinese students are studying in the US than ever before. According to the Institute of International Education, more than 304,000 international students were attending university in the US during the 2014-2015 academic year, marking a nearly fivefold increase from a decade prior.

End quote. Why are we issuing that many student visas? Our universities are a resource, a great educational resource. That resource should be for the benefit of our people.

The answer is simple: Money.  The Chinese have it and universities and especially state universities and extra especially non-flagship state universities (NSFU) want it.

Sidebar One: Why especially NFSU?  There are at least two reasons.  First, NFSU have much tighter funding than flagships.  They rarely have significant endowments or grants.  Second, NFSU have great difficulty getting out-of state American students while flagships have the brand, mostly from sports teams, to compete at a distance.  End Sidebar One.

Sidebar Two: What about private schools?  To oversimplify, private schools charge tuition net of aid based on ability to pay.  If the Chinese have the ability to pay, and they usually do, then they are interested.  End Sidebar Two.

Funding levels vary among states but roughly, the state pays one-third of student costs, students pay most of the rest, and grants and donations fill in the remainder. at NFSU the latter bit is usually small.  Most schools have excess capacity in some areas (bringing in 100 more students doesn’t require a new dean) so out-of-state tuition is profitable for most schools.  International students are big out-of-state opportunity and China is a big part of that.  The Chinese students who account for a large portion of the out-of-state students at NFSU are supporting the in-state students.  The state taxpayers are getting a bargain.

Sidebar Three:  Because of the budgetary importance of international students to many NFSU, admissions officers and international education folks are under great pressure from the administration to meet expectations.  It can lead to firings and low quality international students.  End Sidebar three.

The other view from the budget is if NSFU cannot meet their out-of-state expectations.  In that case money has to be found elsewhere to eliminate the shortfall.  It means that classes are cut back and in-state students suffer.  It could mean that the state pays more but that has been unlikely over the past decade plus.  There could be reasons to reduce student visas but the fate of the in-state students isn’t one of them.


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