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Just a few days ago, the American dream for a majority of the foreign students seemed to be crumbling with the announcement of the restriction on the F1 visa by the Trump administration. However, according to a recent statement given by the US administration, the ruling stands withdrawn, for the students’ welfare,

Analysing the education scenario of the States, it is clear that the withdrawal is not only beneficial for the students but also beneficial for the US economy. Education export contributes $41 Billion directly to the US economy. The following contains a detailed analysis of the billion-dollar Education industry flourishing in the USA as we speak and why the decision to withdraw the earlier ruling stands in clear favour of the country and is mandatory for their economy. 

Why USA?

According to the Institute of International Education (IIE), there are almost 1.15 million international students currently enrolled in the American Universities, and you’d be surprised to know that Indian and Chinese students constitute almost 52% of them! 

For years now, the States have been a go-to destination for Indian students wishing to study abroad, and when 14 of the top 20 Universities globally are in the States, you would say why not! (Source: World University Rankings 2019)


It is no secret that the fees for foreign nationals is higher than for the locals.
In 2018-2019, the Education export of the US ranked 4th in the list of exports at a staggering $41 Billion! These $41B were earned only through foreign students, and if this is not enough to topple you, let’s break it down further and calculate the precise economic value of this! (Source: Statista)

$41B is just from amassing the tuition and living expense, that is, it is the direct economic value, but let us also take a look at the indirect perks the country is thriving upon which are often not taken into account:

  • The students support roughly 5 lakh jobs annually (transportation, insurance etc.)
  • The local economics such as shops, car rentals, jobs etc. largely thrive on student demands having to be in the isolated locations.
  • Billions of dollars are spent in the real estate sector just for the students’ stay. In 2018, the real estate purchases from China for the same topped at $3 Billion.

Apart from these, the more indirect economic gains include:

  • Awards and Honours: 40% of the American Nobel in Physics, Chemistry and Biology were awarded to immigrants, who later work in the US and contribute directly to the economy.
  • Promoting US Foreign Policy and leadership: 62 world leaders have received higher education in the US.
  • The travel expenditure: There are 11 lakh international students in the US, and these students on an average journey to their home country at least once a year, if not more. If taken as a guesstimate from the data given and taking the average cost of flights, it totals to an approximate figure of $1.46 Billion. Take note that this is the minimum figure, and the actual number is much greater than this. 
  • Talent drain: 23% of the billion-dollar start-ups in America are founded by people who initially came to the country as students.

Let’s now bring the Indian contribution to the picture.

Indian students constitute about 18% of the total foreign students and raise an amount of $9 Billion in their education export to the US. A major part of this amount is the travelling expenditure incurred by Indians; not just the students visiting their homeland but also their families paying visits to the students now and then. Owing to our Indian sentiments, we make the second-highest study-related travel expenditure according to a report by NAFSA. What is alarming is that if this amount of $9 B or say 676,08,85,50,000 were invested in India annually, it would significantly boost the GDP and generate thousands of jobs in the domestic market!

Can we even amass the astronomical contribution the world is making to the US economy, just due to the fact that they studied there? If accounted for, these factors would make education the top export of the US, miles ahead of the automobile sector which currently stands at $158 Billion. 

Looking at the statistics and analysing the data, it is clear that higher Education is one sector which can give exponential direct returns and astronomical indirect returns which will never cease to end, and keeping in mind the benefits stated, the withdrawal of the curb on the F1 visa is justified, for everybody’s good. 


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