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Washington State lawmakers propose surcharge on international student tuition

Taxing International Student Tuition
April 12, 2013

Universities and community colleges in Washington State are objecting to a proposed bill that would increase tuition for international students by 20 percent at all public institutions. The bill, if passed, is expected to bring in $59.2 million in revenue over two years, but universities worry that they’re going to be priced – nay, taxed – out of the market.

“We might actually see reduced revenue from international students because they’d stop coming,” said Norm Arkans, a spokesman for the University of Washington. International undergraduate students at UW currently pay a nonresident tuition rate of just under $30,000; the proposed surcharge would increase their annual tuition by about $6,000. Furthermore, the revenue from the surcharge wouldn’t go directly to the university but instead to the state’s general fund. The expectation is that the revenue will be used to help fund the higher education budget and make up for a proposed 3 percent reduction in tuition for in-state students, but the bill doesn’t explicitly earmark the money for that purpose.

“Right now, international students actually subsidize Washington State residents,” said Margaret Shepherd, UW’s director of state relations. “We have used the revenue generated from both nonresident and international tuition to make up for the loss of state support or to help enhance the educational experience for all of our students, and a primary concern with this proposal is that the revenue that’s generated from international students actually goes to subsidize other institutions and other higher education programs from which they don’t receive a benefit.”

The surcharge on international students has been included in the State Senate’s proposed biennial budget, introduced last week. Washington’s Senate is controlled by a coalition of Republicans and two conservative Democrats (the so-called “Majority Coalition Caucus”); the Democratically controlled House released a proposed budget without the surcharge on Wednesday. “This is something that will be on the table in the budget negotiation process,” Shepherd said.

In a hearing on an earlier, draft version of the bill, Rodney Tom, a Democrat and the Senate Majority Leader, questioned UW’s assumption that the 20 percent surcharge would lead to a decline in international students. He cited the case of the (private) University of Southern California, which charges nearly $44,000 in tuition a year and has more international students than any other university in the U.S. 

“This isn’t meant to decrease the amount of foreign students,” said Tom, one of three sponsors of the bill. “I think the demand is such that we’re going to continue to see an influx.”

In an interview, Tom suggested that there is a need to revisit the practice of a single fee structure for international and out-of-state students, noting that UW, for example, receives more than $1 billion each year in federal funding. "A kid from Idaho, his parents have been paying federal taxes for the 18 years that he or she has been around. The kid from Taipei has not," Tom said.

“The University of Washington has been supplemented with federal tax dollars, so I think there should be a difference between in-state, out-of-state and international student tuition.”

This is not the norm nationwide. In most cases international students enrolled at public universities pay standard nonresident tuition rates -- i.e., the same as out-of-state students -- although there are cases of individual institutions that impose additional fees on international students. For example, the University of Illinois at Urbana-Champaign charges international undergraduates $800 more than it does domestic non-Illinois residents, for a total of $27,016. Michigan State University has a $1,000 fee for international undergraduates, bringing their total annual tuition and fees to $33,632. And Purdue University prompted student protest when it raised its fee for international students from $1,000 to $2,000. (Currently international undergraduates at Purdue pay $30,702 a year, compared to $28,702 for domestic non-Indiana residents.)

All three of these institutions are in the top 10 nationally in terms of total number of international students. (The University of Washington is No. 18.)

UW expects that about 80 percent of the revenue from the proposed surcharge would come from its students. However, other institutions in the state are also concerned about the impact on their students and programs.

David Buri, the director of government relations for Eastern Washington University, said any windfall from the surcharge would potentially help Eastern’s bottom line, as the projected (mostly UW-generated) revenue would be spread across the system. Even so, he said the university has concerns about the proposal, which could negatively affect its 1+2+1 programs with Chinese universities.  “I think we need a more thoughtful approach,” Buri said. “Those international students bring a tremendous amount of benefit to our state. I think it's worth looking [more closely] at this: Do other states do this? How are we competitive-wise with other states? If we do the 20 percent surcharge, are students going to quit coming?”

NAFSA: Association of International Educators estimates that international students brought more than $500 million into the state of Washington in 2011-12. “Washington is an international state,” said Marty Brown, the executive director of the Washington State Board for Community and Technical Colleges. “Trade is huge, Boeing is huge, Microsoft is huge, Amazon is huge; some of these students come over and end up going to work for those places.”

Washington enrolls about 7,900 international students across its 34 community colleges, with those students concentrated in the three Seattle Community College campuses and the suburban Green River Community College, which is the 10th most popular community college destination for international students in the U.S.

“I just think it’s very shortsighted,” Brown said of the legislation. “These students can go anyplace. They can go anywhere in the world, and they will.”

 

 

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