Rethinking Foreign Students
A question of the national interest.

By George J. Borjas, from the June 17, 2002, issue of National Review

Many foreign leaders the Philippines' Corazon Aquino and Israel's Ehud Barak, to name just two obtained part of their education in the United States. Such training may be one of America's highest valued exports: By giving future foreign leaders firsthand exposure to our system of government, we are presumably building a safer, freer, and more prosperous world.

Another foreign student, Hani Hasan Hanjour, got a visa to study English at ELS Language Centers, a Berlitz-owned school that leases space at a local college in Oakland, Calif. He did not attend a single class. Instead, he became one of the terrorists in the plane that crashed into the Pentagon on September 11. And two other terrorists were waiting for the official approval of their student visas to attend flight school an approval that the Immigration and Naturalization Service dutifully mailed out six months after the attacks.

In 1971, the State Department issued only 65,000 student visas. By 2000, it was issuing 315,000 such visas, and there may now be as many as 1 million foreign students in the U.S. The increase in the size of this program has transformed the typical American university, and the impact is especially striking in particular fields: Foreign students receive 35 percent of the doctorates awarded in the physical sciences, and 49 percent of those in engineering.

The program is now so large, so riddled with corruption, and so ineptly run that the INS simply does not know how many foreign students are in the country or where they are enrolled. It has grown explosively without anyone asking the most basic questions: Is such a large-scale foreign-student program in our interests? What does it cost us? And what does it buy us?

A foreigner who wishes to study in the U.S. starts by applying for admission to an educational or vocational institution. To qualify for a student visa, he must be accepted by an INS-approved school; he must enroll in it full-time; and he must have sufficient funds for self-support.

When the student is admitted into a program, the school sends him a Form I-20 ("Certificate of Eligibility for Nonimmigrant Student Status"). The student takes this form to the local consulate. A consular official interviews him and reviews the application before deciding whether to grant a visa. If the student was accepted by several U.S. schools, as is common, that student has received several I-20s. Inevitably, there are numerous reports of a black market for the unused I-20s in many countries.

But once a student enters the U.S., there is practically no monitoring of him: The schools do not even have to report whether the student actually enrolled. Recently, the Bush administration has proposed an Internet-based system to track these students: Each school would record any changes in a student's address, major, or enrollment status. But this approach will probably not be very effective, since the INS lacks the resources to take any action if, for example, the University of Southern California reports that ten of its foreign students dropped out in the past semester. There are already 10 million illegal aliens in the country; does anyone believe that the INS can somehow find those extra ten?

Indeed, many foreigners want to study in the U.S. precisely because a student visa buys them a ticket into the country. Between 1971 and 1991, just over 3 million persons received student visas, and 393,000 of them were able to eventually adjust their immigration status and obtain a "green card," or permanent-residence visa. Only about 13 percent of the students remain here in this legal manner; others remain illegally, and the lax monitoring system has surely encouraged many to do so. Around 10 percent of the 3 million illegal aliens who received amnesty in the late 1980s were persons with temporary visas, many of them foreign students, who had remained in the country after their visas had expired.

Although it might seem that a student visa does not buy much of a chance of moving permanently to the U.S., the chances would be far smaller without it. Foreigners have very few options for migrating legally to the U.S. unless they already have relatives residing here. One potential avenue is to enter the "diversity lottery," in which 50,000 permanent-residence visas are raffled off each year. The last lottery attracted 10 million applicants, so the chance of winning a green card was only 0.5 percent, far smaller than the chances provided by a student visa.

It would seem that a major roadblock in obtaining a student visa is that the applicant must be admitted by an INS-approved educational institution. There are, however, around 73,000 schools that are certified to hand out I-20s. It is eye-opening to browse through the actual list. In the San Diego area alone, the INS grants its seal of approval to nearly 400 institutions, ranging from the University of California at San Diego to Avance Beauty College, the College of English Language (where new courses start every Monday), the Asian American Acupuncture University, and the San Diego Golf Academy. Because there are so many INS- approved institutions, anyone with the money can buy a student visa to enter the U.S. America has effectively delegated the task of selecting immigrants to thousands of privately run entities whose incentives need not coincide with the national interest.

Consider the financial incentives of large research universities. These institutions need workers to staff their science labs and teaching assistants to assign to large undergraduate classes, and they would prefer to fill these positions at low salaries. Foreign students provide an almost limitless supply of willing workers. Similarly, the owners of privately run vocational schools benefit by having more tuition-paying students, and they have a huge incentive to sell visas under the guise of a foreign-student program.

There are widespread reports that the program has corrupted the admission and education standards at some schools. A well-publicized example involved a San Diego-area businessman who received between $200,000 and $300,000 to procure student visas for Middle Eastern students. In this intricate scheme, an admissions officer accepted bribes to admit the students, and professors at three different colleges sold passing grades.

There is even more corruption abroad. Because the foreign-student program provides a rare opportunity for migrating to the U.S., there is a thriving industry of consulting firms that grease the wheels of the process. The demand for student visas by Chinese nationals is so strong that, according to a U.S. consular official in Beijing, a fee of $10,000 buys phony letters of recommendation, false evidence of economic support, and even professional actors to stand in during the interview with consular officials.

The Internet has numerous websites of firms that guide prospective students for a fee. In India, the Foreign Studies Service Bureau will guarantee an I-20 form for about $800, and they even list the schools where the potential student can be enrolled. The list of 92 schools is topped by the University of Wisconsin at Milwaukee and Southern Illinois University at Carbondale. (The FSSB removed the fee information from its website soon after the first draft of this article began circulating.)

There is healthy competition among these firms. A South Korean immigration attorney gives some fatherly advice: "There are probably hundreds of 'YooHakWon' in Seoul, all specializing in helping students find a school in the United States . . . There are advantages and disadvantages in retaining their services. The advantage is that they will probably help you obtain an I-20 Form . . . The disadvantage is that the school chosen for you may not be the right school for you . . . All 'YooHakWons' in Korea receive a commission from a school in the United States when they introduce a student to them . . . They may try to introduce you to a school from which they receive a commission, rather than finding a school which is right for you."

In short, the INS relegated the vetting of prospective students to an amazingly large number of institutions that benefit financially from the presence of foreign students, and to foreign consultants who brazenly misuse, distort, and pervert the system. This corrupt outcome has little to do with whatever noble goals motivate the program's existence.

And to whose benefit? A study by the National Academy of Sciences concluded that all of the immigration over the past few decades increased the income accruing to natives by less than $10 billion a year. Of that $10 billion contribution, very little less than $1 billion can be attributed to foreign students, who account for less than 2 percent of all permanent immigrants.

The net gain to the country may be small but the higher-education industry can benefit substantially. Foreign students are an important part of the workforce in many universities. Wages and salaries in this sector are around $50 billion annually. If the huge influx of foreign-student workers lowered wages by only 5 percent, the payroll savings would be around $2 billion each year, transferring a significant amount of wealth from workers to management in that industry.

Taxpayers also lose. The tuition that colleges charge is not typically enough to cover the cost of an education. Gordon Winston, former provost of Williams College, estimates that the average per-student subsidy is $6,400 in private universities and $9,200 in public universities. The 275,000 foreign students enrolled in public institutions are subsidized to the tune of $2.5 billion a year. This subsidy is so large that the foreign-student program may actually generate a net loss for the U.S.

The typical discussion of foreign students' contributions tends to remain on the level of sweeping platitudes. For example, Michael Becraft, former acting deputy commissioner of the INS, has said: "Foreign-student programs have been found to serve U.S. foreign-policy objectives by exposing nationals of other countries to the institutions and culture of the United States, by helping to cement alliances with other countries, and by transferring knowledge and skills to other countries, particularly developing countries." And David Ward, president of the American Council on Education, recently testified: "Without exception, I found [foreign students] to be diligent and hard-working individuals who . . . helped expose American-born students to the world that they would encounter after graduating from college."

There is, in fact, little evidence to support any of these claims. If exposure to foreign students is so valuable to American students preparing them for "the world that they would encounter after graduating" why do we not see foreign countries offering thousands of dollars to induce Americans to attend foreign universities? Those countries have much more to gain by exposing their students to Americans. We are the world's largest market, and our culture and politics dominate world affairs. Yet France has managed with fewer than 12,000 American students, and Germany with fewer than 5,000.

There is also the argument that the U.S. gains because the foreign-student program lets us skim the best talent from other countries. But over half of the foreign students who end up staying in the country do so not because of exceptional skills or because they are swamped by job offers after graduation, but simply because they marry an American. And the methods foreigners use to obtain student visas, and the ones American institutions use to recruit them, do not boost our confidence that only the best and the brightest show up on our doorstep.

One could plausibly argue that foreign students have lowered the quality of undergraduate education. Undergraduates often charge that the poor English of many foreign-born teaching assistants impede their understanding of the material. And there is evidence that foreign-born teaching assistants do indeed have an adverse effect on the academic achievement of U.S.-born undergraduates, as measured by student grades and test scores.

But the issue that generated the most concern in the wake of the September 11 attacks was not that the benefits of the foreign-student program are greatly exaggerated; it was that foreign students might be a physical threat to Americans. Hence the INS's development of the computerized system to track the students.
Yet the security problems would not be solved even if it were possible to track every single student most of the time. By delegating the responsibility for selecting students to 73,000 private entities, the INS persists in creating security problems. To take just one example, 14 Syrian men with student visas arrived in the Dallas-Fort Worth airport in October 2001. They were all to be enrolled in a flight school, Delta-Qualiflight Aeronautics, which enrolls a very large number of Middle Eastern students. In fact, Arabic is the main language spoken at that school. That school's admission policy would surely raise concerns if it were reviewed by an independent agency; but there is no independent review.

The September attacks raise an even more important question about the student-worker program. The U.S. has traditionally banned the export of goods that it considers vital to national security, such as supercomputers, encryption technology, and material that can be used to produce weapons of mass destruction. Yet no similar ban exists on the knowledge that can be acquired in American universities and exported abroad. And the potential for this kind of abuse is not hypothetical: Consider the history of Dr. Rihab Rashida Taha. She obtained a Ph.D. in biology at the University of East Anglia in the United Kingdom. Her studies were funded by the Iraqi ministry of higher education, and her doctoral research was on plant poisons. Upon returning to Iraq, "Dr. Germ," as she is now known in the British tabloids, became the head of Saddam Hussein's bio-terrorism team.

Professor Paula Stephan of Georgia State University recently compiled statistics on doctorates awarded to students originating in countries targeted for increased security monitoring, including Algeria, Egypt, Iran, Iraq, Saudi Arabia, and Yemen. Between 1981 and 1999, students from those countries received 111 doctorates in nuclear and organic chemistry, with 40 of them going to Iraqi students; 434 doctorates in chemical and nuclear engineering, with 106 going to Iraqis; and 112 doctorates in atomic and nuclear physics, with 31 going to Iraqis.

The Bush administration recently proposed that a government panel review the applications of foreign students who want to study in sensitive areas; but this is likely to be an ineffective response. The panel may need to screen as many as 2,000 applications per year, and it will get little cooperation from the universities: According to the Associated Press, a lobbyist for the universities seemingly oblivious to the potentially catastrophic cost of a security breach is complaining that the panel's review "could delay entry into the country and prevent people from enrolling at the beginning of a school term."

Eventually, the U.S. will have to confront an unpalatable policy decision: Should foreign students belonging to particular national-origin groups be barred from entering particular types of educational programs?

The foreign-student program has been spinning out of control for years. The terrorist attacks motivated California Democratic senator Dianne Feinstein to propose a six-month moratorium on student visas, giving the INS a breathing period to put the program under tighter control. After intense lobbying by the nation's universities, however, Feinstein withdrew her proposal.

It's not politically correct to say so, but the foreign-student program may not be all that beneficial. Once we stop humming the Ode to Diversity that plays such a central role in the modern secular liturgy, we will recognize that the time has come for a fundamental reevaluation of the program: Why should American taxpayers subsidize the tuition of the hundreds of thousands of foreign students enrolled in public universities? Is it sensible to give so many different institutions the authority to admit foreign students? Can we afford to ignore the national-security rationale for keeping some educational programs off-limits to students from particular countries? The remarkably powerful combination of INS ineptitude and the greed of the higher-education sector has perverted what seemed to be a sensible and noble effort into an economically dubious proposition and a national-security fiasco. The foreign-student program shows yet again how our immigration policy has failed to serve the national interest.

George J. Borjas is a professor of public policy at the John F. Kennedy School of Government at Harvard.