Yesterday, I showed how good international students were for universities’ bottom lines. But it’s not quite as simple as I made it out to be. Whether admitting international students makes sense or not depends on four factors:
1) How much of the income do you get to keep? In Quebec, international students in “regulated” programs (which include Arts) are worth essentially nothing to institutions because the government claws it all back. On the other hand, in block-grant provinces (and in Saskatchewan, which is part-formula, part block), international students are basically pure profit. The only reason to not take international students is if the provincial government might punish you for it, because of fears of crowding out local demand (cf. Alberta). In most formula-funding provinces, and for Quebec’s unregulated programs, the return is somewhere in-between – institutions can charge what they want for international students, but get zero subsidy for them from the province.
2) What’s the marginal cost per student? Remember: marginal, not average. There is a tendency to think that international students are more financially beneficial in Arts or Business because average costs are lower there than in Science and Engineering. And while, to some extent, that’s true, what really matters is how close to capacity each program is. An extra Engineering student in a class of 29 with a capacity of 30 is actually going to be cheaper than an extra Arts student in a class of 30 with the same capacity, because being the 31st student means starting a new class section, hiring a new instructor, occupying more classroom space, etc. The problem for most institutions is that they have only the barest notion of what marginal costs are across the institution at any given time.
3) What’s the cost of recruitment? At most mid-sized institutions these days, recruitment costs per international student are – all told – in the $6-7K range, once you take agent fees, overhead, and everything else into consideration. Assuming the student is coming for four years and is going to generate 60-80K in fees, that’s pretty good (less so if your school has a problem with international student retention). But it’s even better if you’re McGill, Toronto, or UBC; with so much brand prestige you don’t need to spend so much.
4) What’s the opportunity cost? Now that you know your income and expenses from international students, you can work out what your net income is by field of study. But opportunity costs matter, too; your potential earnings from domestic students need to be taken into account. For most institutions outside the big cities, the answer is “nothing” because the alternative to an international student is no students at all. In these cases, the decision to admit international students is obvious. Where it gets less obvious is where you can gain income from a domestic student. At that point, you need to work out how net (not gross) income from a graduate student compares with net income from government grants and tuition fees. At some institutions, in some fields of study, it will sometimes make more sense to enroll a domestic student over an international one. But it’s close.
Got all that? Good. Now go build your strategic enrolment plans.
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There is one additional reason to bring students from abroad to Canadian colleges and universities. It makes us all better. Better studens. Better faculty and staff. And, in my mind btter people. Canadian higher education has long been about developing our individual talents. Bringing internatioal students to Canada is a key part of achievng this essential goal. Intrnational students help us to become more inclusive. They enrich our lives with so much – from art, literature, sport and politics to some wonderful food! To internationalize or not is no longer the question. We need to ensure that our colleges and universities embrace internatonal students as a way enriching us all.
“…because being the 31st student means starting a new class section, hiring a new instructor, occupying more classroom space, etc.”
I doubt any department would create a whole new section for just one student. Unless there is a really good collective agreement to cap courses, the trends point to just increasing class size. As to the space issue, room booking people can work their magic to swap out one classroom with another.
So, for the sake of accuracy here, what university would create a whole new section for just one student? It would be more likely that registration for a course would then be opened up to more students to make that course into two sections in an attempt to fill it, and if the average cost of a sessional for a half course is about 6.2k, add a whole bunch more students, (financial) problem solved.
No, obviously they wouldn’t, because the marginal costs would be enormous. My use of 29th vs. 31st student is just a way of getting people to think through difference between avg. and marginal costs.
And your scenario works, assuming you can find someone to teach the section and there’s no lab component. Not a given, say, in Engineering.
Ah, I see. It was a heuristic example (and a good one, too).
As for finding someone in the Arts, that’s fairly easy. Plenty of sessionals and grad students out there. STEM fields might prove more problematic, for sure.
Our experience is that the international students tend overwhelmingly to go to a few areas – Business and economics, some of the sciences. So the marginal costs are somewhat higher than zero. But class sizes do get bigger before new sections get justified.
Also worth pointing out that small undergrad universities in small towns don’t always have ‘plenty of sessionals and grad students’ to teach them, even outside of STEM fields.