US colleges face $1 billion loss as new international student enrollment drops sharply in 2025

New international student enrolment at US colleges fell sharply this fall, potentially costing the economy nearly $1 billion, according to multiple reports. The decline comes amid ongoing visa restrictions and changes in government policies affecting foreign students.

The fall 2025 semester saw a 17% drop in new international student enrolment, according to a snapshot from the US Department of State and the Institute of International Education (IIE). Overall, international students contributed nearly $55 billion to the US economy during the 2024-25 academic year, including tuition and living expenses, highlighting the scale of the economic impact.




Visa restrictions and policy changes affect enrolment

The sharp decline in new students is largely linked to the Trump administration’s adjustments to student visa policies. “Fewer new international students are choosing to study in the US because of policy uncertainty and visa restrictions,” Bjorn Markeson, an economist at Implan, said in conversation with CNBC. He added that these students support thousands of jobs and local businesses, generating tax revenue for community services.

Before the policy pause on new visa applications earlier this year, there were nearly 1.2 million international undergraduate and graduate students in the US, mainly from India and China. They made up about 6% of the total higher education population, according to IIE’s Open Doors report.

Economic consequences of declining student numbers

NAFSA: Association of International Educators projects that the drop in enrolment will cost the US economy $1.1 billion, factoring in lost tuition and student spending. Implan’s analysis also found that including ripple effects across local economies, the total economic loss approaches $1 billion.

“The ripple effects of these policy changes are being felt across campuses and communities around the world,” Fanta Aw, executive director and CEO of NAFSA, said in conversation with CNBC. She emphasised that the pipeline of global talent entering US colleges is in a precarious position, underscoring broader implications for higher education.

Impact on colleges and universities

US colleges and universities are among the hardest hit. International students typically pay full tuition, making them an important revenue source. According to a survey of over 825 institutions by Open Doors, declining numbers of foreign students reduce resources available for faculty, programmes, and financial aid for domestic students.

Ted Mitchell, president of the American Council on Education, told CNBC that full-paying international students often fund scholarships for US students. “It’s a 1-to-1 relationship,” he explained, highlighting the direct financial consequences for campuses.

Historical context and enrolment trends

US institutions have long been the top destination for international students. However, the enrolment pipeline has been under pressure since the Covid-19 pandemic. The decline in fall 2024 enrolment marked the first drop since 2020-21. More restrictive visa policies and changing international perceptions of studying in the US contributed to the continuing decrease, according to multiple reports.

With fewer international students arriving this year, US colleges face not only an immediate financial hit but also potential long-term effects on educational diversity, campus programs, and the broader economy.Ready to navigate global policies? Secure your overseas future. Get expert guidance now!