Amid MU budget crunch, Chinese demand for US education offers boost

When Missouri Gov. Eric Greitens led a trade mission to China and South Korea in September, he did so with a variety of stated goals, including the cultivation of educational relationships in the two countries.

“There is already a very strong foundation of Chinese students studying in Missouri,” Greitens said during an interview with CGTN, a Chinese state-owned television channel.

With the rapid growth of the Chinese economy and the proliferation of the country’s middle class, China has developed an increasing appetite for American higher education, with millions of Chinese families seeking high-quality education all around the world over the last two decades.

At the same time, many American universities, especially public research institutions like the University of Missouri, have suffered from declines in state support and other financial difficulties, the National Bureau of Economic Research reports. The confluence of these factors has led to a trend of increasing Chinese enrollment at MU and, according to some experts, could represent part of the solution to the university’s financial woes.

Growing economic, educational ties

Between 2006 and 2016, Missouri service exports to China grew 466 percent. In 2015, China was Missouri’s No. 3 market for service exports, purchasing $746 million in services from the state. Education accounted for $223 million of that total, making it the state’s second-largest service exported to the country.

This fall, 982 students from China enrolled at MU, accounting for 49 percent of the university’s international students, according to an MU enrollment report. The total population of international students at the university this semester is 2,001, which is around 6.5 percent of the university’s overall student population.

Between the 2010-11 and 2016-17 academic years, the number of Chinese students at MU showed a general upward trend, although there was a dip in 2016-17, following racial unrest on the campus in 2015.

MU’s financial woes

Following that racial unrest, which gripped MU’s campus and made global headlines in November 2015, enrollment at the school has declined, from 35,448 in fall 2015 to 30,870 this fall. That decrease in students, and the corresponding loss of revenue, comes as MU contends with a reduction in funding from the state.

In June, MU announced cuts of $59.8 million and 343 positions at the Columbia campus, part of $101 million in budget cuts to the statewide University of Missouri System. In late June, Moody’s Investor Services downgraded the UM System’s credit outlook from stable to negative, citing lower enrollment at MU and declining state revenue.

For a university like MU that is facing financial difficulties, international students can provide a lift, according to Mark Stater, an economics professor at Trinity College in Connecticut and author of several papers on the economics of higher education.

“If colleges and universities are struggling to enroll enough students to meet their revenue goals,” Stater said, “a possible option is to try and recruit international students to make up for the shortfall.”

Paying full freight

Yingfei Zhang came to MU from Henan, China, to study civil engineering as part of the university’s “2+2” program, through which students spend two years studying in China and two in the U.S. Zhang is in his third semester in Columbia.

“I like (Columbia), environment is great,” Zhang said. “I can fully concentrate on my study because (Columbia is) quiet and suitable for study.”

It also carries a substantial price tag. “My total spending in Columbia for one year is approximately $55,000,” Zhang said.

The cost of an MU education can vary widely between Missouri residents, non-residents who are U.S. citizens, and international students. According to figures from the MU Student Financial Aid office for undergraduates during the 2017-18 school year (assuming 14 credit hours per semester), non-resident students pay $15,588 more in tuition and fees per year than Missouri residents. International students pay non-resident rates plus $80 per semester to support the school’s International Center.

However, approximately 20 percent of non-resident freshmen apply for resident status during their sophomore year, according to MU spokeswoman Liz McCune, and almost all of those applications are approved. In other words, many non-resident students only pay one year of non-resident rates before getting resident status and cheaper tuition. Meanwhile, international students are not eligible for resident status.

The upshot is that the average international student pays thousands of dollars more in tuition and fees than the typical Missouri resident or non-resident student who’s a U.S. citizen. Those international students often are what Stater calls “full payers.”

“If a financially struggling college needs more students who are full payers, or closer to being full payers, recruiting internationally can be a way to try and do this,” Stater said.

‘More than just financial’

Although Stater acknowledges the potential financial upside of recruiting international students, he is quick to point out the non-monetary benefits of a global student body.

“(T)he presence of international students enriches a campus by bringing together people from different cultures and backgrounds,” he said.

McCune echoes that sentiment. She said non-resident and international students “can be helpful to our financial picture,” but emphasized that international students play an important role by bringing different cultures to MU and making the school more diverse.

“I think we see the attractiveness of bringing international students (on) campus being a lot of more than just financial,” McCune said.

“They contribute to the culture of the campus, and they give our students invaluable experiences with people who are different than they are. And that is something that you cannot put a price tag on.”

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