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A Vicious Cycle, Continued

A recent New York Times article serves to underscore the disconnect between American educational organizations and business organizations. The article, entitled “Taking More Seats on Campus, Foreigners Also Pay the Freight”, highlighted a trend at The University of Washington and other colleges with regards to foreign students. Schools are increasing the size of these populations due to the fact that they can charge more for them. Universities are feeling the economic pinch so, like their for-profit peers in the business world, are tapping into alternative revenue sources. Students from other countries (and to a lesser extent, out-of-state students) can be charged higher tuition and other school related fees. 

Here are a few points from the NYT article:

  • At The University of Washington 18% of its freshman are from outside the United States. Their tuition costs ($28059) are 3 times the average of in-state students.
  • Top schools such as Columbia University, Boston University, and University of Pennsylvania report at least 15% of its respective freshman populations are from other countries.
  • Foreign students contribute approximately $21 billion a year to the US economy.

To be clear, the issue isn’t about foreign students coming to the US to be educated. This journey for many echoes this country’s immigrant experience, of those looking to gain an opportunity that this country can uniquely offer. And many have expressed their gratitude for this opportunity financially. It’s also important to note that while the number of foreign students have sharply increased, they still represent a small fraction of a school’s overall student population. 

“The U.S. has the best education system, especially in higher education”–Charn Uswachoke
Read more here: http://www.star-telegram.com/2012/02/12/3729579/international-alumni-are-filling.html#storylink=cpy

It’s also not about pointing blame at the universities involved. As I talked about in a previous blog post, school administrators appear to be making reasoned yet unfortunate economic choices. When one source of revenue is significantly reduced (the University of Washington, for example, has stated that funding by the state has been reduced by more than half) an institution has to look elsewhere. Otherwise, it will have to reduce or cut programs. This is what happens when one doesn’t adequately support and invest in critical institutions

The issue for me is one of access, particularly for low income students, many of whom are often people of color. Considering the fact that over 15% of the US population is living in poverty, and that a college degree has shown to have a significant return on investment (at least in terms of unemployment rates and salaries), it’s troubling to see this trend. 

The issue is also one of competitiveness. According to the Institute of International Education (IIE), 41% of foreign students currently enrolled at American universities are enrolled in Science, Technology, Engineering, and Mathematics (STEM) fields (check out the report here). It’s been well established that part of the economic crisis the US is facing is due to the fact that there isn’t enough talent amongst its own citizens to support many company’s demand for highly skilled technical workers. Without the right investments this trend will continue for the foreseeable future.

What can business leaders do to impact this? Here are a few suggestions:

  • Advocate. Much has been made in terms of business leaders pledging to create jobs in the United States (e.g., Create Jobs for USA). Less has been discussed in terms of advocating for changes in access to effective educational and training programs. If the pipeline is broken how can companies build sustainable and effective talent management programs? Organizational leaders must actively reach out to those in the public and private sector to create solutions around this issue. For public institutions of higher education it’s ultimately about funding. Businesses should reach out to government leaders to ensure that public funding continues and is strengthened. And universities can use this money, whether from public funds or added fees, and reinvest it into programs targeted toward underrepresented groups, particularly in the STEM fields.
  • Innovate. No matter what’s done in the higher education arena to impact the future it won’t be enough to effectively address an organization’s talent needs today. This means that companies must roll up their sleeves and do the work themselves, or support existing programs that seek to address this need (check out some examples here and here).
  • Equivocate. Business leaders can simply not commit to any proactive stance. It’s a legitimate strategy. Perhaps a company, one that’s considered best-in-class for instance, can afford to attract and retain high quality talent. Yet considering the volatility of the economic landscape it seems like a short-sighted stance.  

In conclusion, the economic choices that those in the higher education industry will have a direct impact on public and private organizations. Leaders can choose to advocate, innovate, or equivocate on this issue. But it’s not going to go away anytime soon. Until things change the vicious cycle will continue.  

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