Many higher education institutions have their financial challenges these days, thanks in part to a saturated market, an increase in online education programs and an overall decline in the number of high school graduates pursuing college and university studies. Larger and more selective institutions are having less concern with enrollment than their smaller, often private counterparts, which typically are forced to manage with smaller endowments and subsequently struggle to make ends meet.
For many, tapping into and attracting an international student population has played a major role in balancing increasingly tight budgets, but that inflow has slowed in recent years. A snapshot survey of 500 institutions conducted by the Institute of International Education reported a 7% decline in the enrollment of new international students in the fall of 2017 compared to the prior year. Possible explanations for the decline include delays and denials related to the visa application process, the social and political environment in the U.S., and competition from colleges and universities in other countries.
Similarly, the recent release of Open Doors, a comprehensive annual survey of more than 2,000 colleges and universities funded by the U.S. State Department, noted that six years of steady growth in new international enrollments had curbed considerably. In the fall of 2016, U.S. international enrollments rose a modest 3.4% from the previous year, which had in turn seen a 6.7% increase from 2014. Accounting for much of the 2016 increase was a 19.1% bump in the number of participants registered in Optional Practical Training, a program comprised of individuals who are “sponsored” by an institution and considered “students” for visa purposes only. Basically, these are persons who have already been granted a degree and are now pursuing employment. Open Doors confirmed the assertion that new international enrollments are flattening.
In the hypercompetitive higher education market, any analytics related to the 1.1 million currently enrolled international students are a cause for concern, and may call for corresponding strategic planning on the part of institutions across the U.S. For many institutions, this may require to revision their longer term enrollment projections to adjust to the reality of this declining student population, which can no longer be counted on providing relief to a stagnating or declining domestic student population. Revenue diversification beyond tuition and cost containment remains key in order to ensure long-term sustainability of institutions of all sizes.
Contact Schneider Downs if you have questions and want to learn about the potential impact to your particular institution.
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