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The Costs and Benefits of Foreign Students in United States Higher Education

Abstract This paper makes a two-fold contribution to the practical application of cost-benefit analysis and to our understanding of the costs and benefits to the host country of foreign students in higher education. First, within the technical constraints it develops a model for assessing costs and benefits; this model is potentially applicable to all countries with foreign students. The model includes educational and political as well as economic inputs, and the paper discusses qualitative as well as quantitative costs and benefits. Secondly, the model is applied to the particular case of the United States. The significance of different perspectives for assessing net benefit is recognized, and costs and benefits are assessed from the perspectives of higher education institutions, state residents and all US citizens. The paper finds positive net benefits, subject to a number of assumptions. However, the policies of both state governments and the US government do not appear to be consistent with the goal of maximizing this net benefit.