Welcome to the Profit of Education website. Continuing the conversation begun in the book Profit of Education, we discuss the latest economic evidence on education reform.

The Student Visa Collapse

Due to the pandemic, the number of international students receiving visas to come study in the United States has collapsed. I want to begin with a look at the timing of the collapse. I follow this with a look at the cumulative effect. Next, I’ll share some numbers about how different the effect has been across different countries. Finally, I’ll suggest that the shock could have been much mitigated.

First, giving credit where due, the existence of the collapse was first revealed by journalist Catherine Rampell in a tweet. Here is my version of Rampell’s picture. (All data is publicly available from the State Department.)

The picture gives the number of student (F1) visas granted in each month of the government’s fiscal year. You can see that this year and last year were running about even—until Covid-19 hit. Starting in March, the number of new student visas plummeted compared to the previous year. The deterioration worsened during the Spring. By late summer more visas were being issued, but the number being issued was still tiny compared to last year.

Where were we left at the start of the school year? The next figure shows the cumulative number of visas across the fiscal year.

Over the 2020 fiscal year, the U.S. issued fewer than a third the number of student visas than we had in 2019, the total dropping by approximately 250,000. (Note that for the most part only students just starting their studies in the U.S. need visas issued. F-1 visas are usually valid for the duration of the student’s academic program, therefore international students already studying pre-pandemic can generally remain without a new visa.) There are some perhaps obvious reasons why this is bad, but there are also some factors that mitigate damages.

The usual estimates place the dollars brought to the American economy at between $40,000 and $50,000 per student annually. And higher education is—or has been—one of America’s most successful exports. $40,000 times 250,000 missing international students is ten billion dollars. That’s a lot of money lost.

But this might exaggerate the damage. Some of the international students who didn’t get visas have enrolled for online classes. Online international students are paying tuition, although not paying for room and board nor buying slices at the neighborhood pizza joint.

Alternatively, we could lose more. What happens going forward? Let’s hope that Covid gets conquered and that things will be back to normal by the next academic year. If the students who couldn’t get here this year all come in 2021-22, then we face only one year of economic loss. On the other hand, a lot of those students may have found an alternative to attending college here in the States. To the extent that happens—which will be very hard to predict—losses will continue for the length of a college career, about three additional years.

Perhaps surprisingly, the fraction of “missing student visas” is very uneven across students’ countries of origin. The overall 2020 rate was 31 percent of 2019 issuances. Here’s a sample of the 2020 to 2019 rate for selected countries.

What you see here is that the pattern in the collapse seems random, or at least not just due to Covid. China got hit first, of course. But China also recovered fairly early. Why was the collapse less bad in Spain—which was hit very hard—than in Taiwan, where the pandemic was better controlled? The worst death rates across the globe have been in Belgium, which saw a relatively modest drop in visas, while Saudi Arabia has reported relatively low death rates but had a huge drop in visas. The pattern appears more to be haphazard than it appears to be from a rational response to the pandemic.

Was the student visa collapse inevitable? Clearly, there was going to be some loss both because some travel lockdowns were necessary and because some families were going to choose to keep their students outside the not-too-healthy United States. Nonetheless, we could have done better—and we can do better going forward. The proximate cause of the collapse is that the U.S. shut most consular offices, making applying for a visa impossible. Fundamentally, there’s no good reason that student visas should require an in-person visit to a consulate in the student’s home country.

Let me tell you a quick story and then show a little suggestive data.

I have a doctoral student who is still stuck in his home country and cannot get into the U.S. because he cannot get a visa. When my university admitted the student, he was working for an international agency in the United States and held an appropriate visa. Unfortunately, on becoming a student the law requires the student to go home in order to apply for a student visa instead of the valid visa he already held. Getting home wasn’t easy due to travel restrictions. But my student got home, where he’s now stuck waiting for an appointment at the consulate. This makes no sense.

Now for a little more data. Businesses recruit foreign workers with an H-1B visa, many of which go to workers who are physically present in the United States. H-1B applications are mailed to a service center in California, Vermont, Nebraska, or Texas. No need to go to a home-country consulate. This next picture shows that while H-1B visas took a dip, there was not nearly the collapse seen for student visas.

There is just no reason that students should have to visit a home-country consulate in person. A good portion of their application is already submitted over the internet. Final processing could surely be done at the port of entry for most cases. Right now our student visa system is so screwy that students who need to renew a visa while continuing their studies (mostly graduate students) are required to leave the country to apply for a renewal. (In yet another oddity, these same students are generally legally allowed to remain in the U.S. with an expired visa so long as they stay enrolled in a university—they just can’t travel home to see their family and then re-enter.)

Some part of the loss of international students was inevitable in light of the pandemic. But we could make the system a lot more user-friendly by eliminating most in-person consulate visits. Looking to the future we should do just that.

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