Devesh Kapur and Milan Vaishnav
The South Asia Program informs policy debates relating to the region’s security, economy, and political development. From strategic competition in the Indo-Pacific to India’s internal dynamics and U.S. engagement with the region, the program offers in-depth, rigorous research and analysis on South Asia’s most critical challenges.Learn More
President Donald Trump’s decision to impose a $100,000 fee on new H-1B visas—the main channel through which U.S. employers hire foreign professionals in specialized fields such as technology, engineering, and research—has ignited a firestorm over its impacts on U.S. workers and Indian tech firms. But the far greater casualty may be America’s universities, and with them the long-term strength of the U.S. economy.
If the administration justifies large new tariffs on imported goods as a way of curbing the trade deficit, it has conveniently ignored the substantial trade surplus the United States enjoys in services. Education is one of America’s most successful exports. In 2024, roughly 1 million international students brought nearly $55 billion into the economy, supporting 400,000 jobs (about a tenth of all positions in higher education).
For many students, that investment only makes sense if they can work in the United States after graduation—to repay debt, gain experience, and sometimes build careers here. Many hope to remain in the United States, but only about two in five successfully do so over the long run. Even for those who return home, experience in the U.S. labor market boosts career prospects and reinforces the value of a U.S. degree. The new H-1B fee threatens to upend that bargain.
We have seen this movie before. When Britain curtailed post-study work rights in 2012, enrollment stagnated, while Canada and Australia surged ahead. By 2021, the United Kingdom was forced into a humiliating reversal. Even before the latest H-1B gambit, America’s global share of international students had fallen from nearly 30 percent in 2000 to around a fifth among Organization for Economic Co-operation and Development countries and 16 percent among all countries. Visa hurdles remain the most frequently cited barrier. Now, Canada enrolls nearly as many international students as the United States, despite being one-eighth its size.
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