Restrictions on foreign students will shrink U.S. economy

Restrictions on foreign students will shrink U.S. economy
Students at Bangladesh's biggest university, Dhaka University, in 1969; students seeking MS degree in psychology

The Department of Homeland Security recently imposed restrictions on foreign students at U.S. universities, preventing many of them from even changing their major or adding an additional major. These restrictions will discourage bright people from coming to the U.S., resulting in less innovation and economic growth. I hope they are successfully challenged in court.

The Cato Institute’s David Bier has a useful article summarizing the policy changes, and their counterproductive nature:

Previously, international students on F visas, exchange visitors on J visas, and foreign media on I visas were granted admission for their “duration of status”—that is, for as long as they were in status or following the rules of the visa programs. DHS’s final rule replaces that with a fixed period of entry of no more than four years (for international students and exchange visitors). But it does far more than end open-ended admission. Littered throughout it is a set of unprecedented restrictions with no statutory basis.

  • Students can’t change majors or transfer schools in year one—and graduate students can’t ever. The rule’s own summary states it plainly:

For F‑1 students changing educational objectives or transferring to an SEVP-certified school, requiring that the student complete his or her first academic year of a program of study at the school that initially issued his or her Form I‑20 or successor form, unless an exception is authorized by SEVP; Prohibiting F‑1 students at the graduate education level or above from changing educational objectives at any point during a program of study.

Undergrads get one year before this restriction lifts. Graduate students never get it lifted at all, absent a SEVP exception. Change your mind about your PhD topic in year four, and you’re the same as someone violating status on day one.

  • You can’t complete a second degree at the same level, or step down a level, ever. Also from the summary:

Requiring any nonimmigrant who has completed a program at one educational level to only be allowed to begin another program at a higher educational level as an F‑1 student and prohibiting a change to the same or a lower educational level while an F‑1 student.

Finish a master’s and want a second master’s in a different field? Illegal. Finish a PhD and want to pick up an associate’s degree in something practical? Illegal.

  • DHS’s real response to people worried about the need to double-major: plan ahead, or too bad. Commenters pointed out this would devastate students in interdisciplinary fields who need two degrees to do their work. DHS’s answer:

this rule does not prevent students who need double majors to achieve their goals from planning ahead and enrolling in both at the same time. For example, nothing in this rule prevents someone from doing a J.D./M.B.A. program at one institution with one I‑20 indicating the program end date that accounts for the longer time it takes to complete the double major.

A J.D. and M.B.A. are not even examples of majors at all, as opposed to types of credentials, so whoever wrote this rule doesn’t have the slightest idea what students are even doing in higher education. More to the point, though, many people arrive at a US university not already knowing they’ll need to pursue a joint degree on day one. DHS’s answer to that reality is: you should have known in advance.

As law professor Ilya Somin notes, “the new rule also makes it more difficult for foreign students to find jobs and stay in the US after graduation. From an educational and economic point of view, the new rules make no sense….some degrees take more than four years to complete, for various reasons, and there are often good reasons for students to change fields, add additional majors, and the like. The real purpose of all of this is just to reduce the number of foreign students. That, in turn would, over time, do serious damage to the US economy.”

Economics professor Michael Clemens describes the damage this sort of thing could do to the economy:

For generations, students from around the world have fueled universities in the United States, their top destination by far. Those students don’t just sustain a $43 billion export industry in higher education services per year. Many remain after graduation as a key source of high-skill science and engineering workers, and thus innovation and growth in the US economy.

That system is now crumbling. The White House has enacted a spate of policies to restrict and repel international students en masse….

These policies, if sustained, would constrict a key supply of science and engineering talent to the US economy, reducing productivity and slowing economic growth in the long run. Using imperfect but best-available estimates from the economics research literature, we project the loss produced by a sustained decline of one third in international student inflows. Over the course of a decade, real US GDP would be smaller than it would be otherwise—an annual loss, at current GDP, of between $240 billion and $481 billion.”

Somin notes that many U.S. universities “are significantly dependent on foreign-student tuition, which is often used to subsidize financial aid for US-citizen students.” The University of North Texas is facing a $45 million budget shortfall as fewer international students enroll. International graduate enrollment fell from about 6,200 students in fall 2024 to just under 3,400 in fall 2025.

There is only one potential benefit of restricting foreign students from coming here, and it is to reduce political radicalism. Some socialist politicians came to the U.S. to study. For example, Kshama Sawant immigrated to the United States from Bombay, India, in 1996. After arriving, she earned a Ph.D. in economics from North Carolina State University before settling in Seattle, where she later became a prominent socialist politician and city council member. She spearheaded policies that harmed Seattle’s economy and increased its crime rate.

But most foreign students don’t seem to be socialists. The Democratic Socialists of America consist mostly of people born in the U.S.

Moreover, foreign students and academics can be so bright and innovative that it offsets the harm of their socialist beliefs, and their intelligent children can make contributions to America as well. Albert Einstein was a German-born physicist who won the Nobel Prize for his discoveries, and later immigrated to the United States, where he later helped precipitate the Manhattan project. Einstein had misguided socialist beliefs, but he was so brilliant about math and science that any society would benefit from having him. Albert Einstein’s son, Hans Albert Einstein, was a renowned engineer, professor of hydraulic engineering at the University of California, Berkeley, and leading expert in sediment transport.

So America should generally welcome foreign students and high-skilled immigrants. It should also welcome many foreigners who are willing to do unpleasant jobs that are hard to fill, such as being prison guards in states that have shortages of prison staff.

Hans Bader

Hans Bader

Hans Bader practices law in Washington, D.C. After studying economics and history at the University of Virginia and law at Harvard, he practiced civil-rights, international-trade, and constitutional law. He also once worked in the Education Department. Hans writes for CNSNews.com and has appeared on C-SPAN’s “Washington Journal.” Contact him at hfb138@yahoo.com

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