Local Economies Lose Big As Fewer International Students Arrive — Businesses Feel The Pinch

International students have long played an important role in the financial health of U.S. colleges — and of the communities around them. But new data from the Institute of International Education shows that fewer students from abroad are arriving on American campuses this fall, and the effects are rippling far beyond classrooms.

Enrollment Drops Hit Campuses First

IIE's Fall 2025 Snapshot reports a 1% decline in total international student enrollment for the 2025–26 academic year. While undergraduate enrollment increased slightly, graduate enrollment fell 12%, and new international enrollments dropped a steep 17%. Only 29% of colleges saw growth in new international students; most reported declines.

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Institutions pointed to several challenges. Roughly 96% of reporting colleges cited visa application issues as a reason for the decline — including long wait times and a temporary pause in visa processing this past spring, according to IIE. Travel restrictions and student concerns about the political climate also contributed. Some schools have responded by offering more deferral options for 2026 and bolstering advising and mental health support.

Revenue Losses Move Quickly Through Local Economies

The financial impact of fewer international students is significant. Students from abroad often pay full tuition, are required to enroll full-time, and are not eligible for federal financial aid. For many schools, particularly regional universities, specialized colleges, and Christian colleges, this revenue is essential.

Data from colleges across the U.S. illustrate this strain. Edmonds College in Washington saw new international enrollment fall 25% this fall — a drop the college president said could translate into a $1 million revenue loss, according to NPR’s "Marketplace." Some campuses, including DePaul University, have already announced layoffs and budget cuts tied in part to enrollment declines, Reuters reports.

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That loss of revenue extends far beyond campus borders. International students contributed nearly $43 billion to the U.S. economy and supported about 355,000 jobs during the 2024–25 school year, according to NAFSA: Association of International Educators. This fall alone, NAFSA estimates the U.S. economy has already lost $1.1 billion and nearly 23,000 jobs because of the decline in international enrollment.

Small Businesses Feel the Difference

In many college towns, everyday economic activity depends heavily on student spending. With fewer students arriving, the effects show up quickly.

"For every three international students, one U.S. job is created and supported," Fanta Aw, CEO and executive director of NAFSA told Marketplace. This isn't just on campus, but in housing, retail, transportation, healthcare services, and restaurants. A local pizza shop, for example, may lose a substantial portion of its customer base if enrollment drops, leaving owners with difficult decisions about staffing or even staying open.

High-Skill Talent Pipelines Are Also at Risk

Beyond tuition and local spending, international students — especially those in graduate STEM programs — play an important role in research output, innovation, and entrepreneurship. International students earn nearly half of all STEM master's and PhD degrees in the U.S., helping supply talent for labs, tech companies, and healthcare systems, according to the Economy League of Greater Philadelphia.

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Economy League reports that at universities in cities with large research sectors, such as Philadelphia and Boston, fewer arriving graduate students are already causing delays in research projects and staffing shortages in labs. Some companies have lost prospective hires to countries with more predictable visa systems.

Looking Ahead

While many colleges continue to prioritize global recruitment, experts warn that next year could be an even more important test. Applications for the coming year already show signs of continued decline, and institutions say recovery will depend heavily on improvements in visa processing and a more predictable policy environment.

For now, communities across the country are feeling the early signs of change — in their classrooms, in their businesses, and in their local economies that rely on a steady flow of global talent.

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