Fee for Being Foreign

Citing a need to expand support services, some public universities are charging differentiated tuition rates or hiking fees for international undergraduate students. But why are many of them mixing the funds with their general budgets?

May 8, 2015

Public universities have traditionally had two tiers of pricing for undergraduates: rates for state residents and for nonresidents, respectively. At most public universities, international students pay out-of-state tuition rates. But some public institutions have introduced a third, higher tier specifically for students coming from abroad.

In April, the University of Wisconsin System Board of Regents approved a slate of tuition increases for out-of-staters, including, for the first time, a $1,000 surcharge for international undergraduates at the Madison and Platteville campuses.

In Wisconsin, where public universities are bracing for major state budget cuts -- even if legislators say those cuts will be smaller than the $300 million reduction originally proposed by Governor Scott Walker -- undergraduate tuition at the flagship campus in Madison will increase by $3,000 for domestic out-of-staters and $4,000 for international students this fall. At the UW-Platteville campus, undergraduate tuition will increase by $277 for domestic out-of-staters and $1,277 for international students. (Tuition rates for Wisconsin students, frozen for the past two years, are expected to remain frozen for another two years.)

In justifying the tuition hike for international students, officials at UW-Madison pointed out that several peer institutions in the Big Ten -- Ohio State and Purdue Universities and the University of Illinois at Urbana-Champaign -- already charge higher rates specifically for international undergraduates (though in Ohio State’s case the international student surcharge is classified as a $500 per semester fee).

Other Big Ten universities that have begun charging $500 per semester fees to international undergraduates in recent years include Michigan State and Pennsylvania State Universities. In 2013, the University of Minnesota at Twin Cities introduced a new $125 per semester academic services fee for international undergraduates on top of an existing $145 per semester international student administrative fee.

It’s not uncommon for universities to charge relatively modest international student programs or services fees: within the Big Ten, for instance, Indiana University at Bloomington charges an $85 per semester fee to international students and Rutgers University charges $125 per semester. But what is new is the movement toward heftier fees or even differentiated tuition rates for international undergraduates at some public institutions, many of which have experienced rapid growth in their international student enrollments in recent years.

Differentiated Tuition

Similar to the movement toward differentiated tuition rates by undergraduate major or program -- in which, for example, universities might charge engineering majors more than they would a cheaper-to-educate English major -- the higher tuition rates for international students are described by university officials as necessary to pay for services that these students use exclusively or more intensively than others. Universities that enroll international students unquestionably have extra monitoring and reporting requirements to the federal government -- requirements that can extend beyond graduation if a student opts for a postgraduation work placement through the optional practical training program -- and may face additional costs in providing adequate academic support and other services to a population of nonnative English speakers. But not all the revenue raised from these differential tuition rates is directed toward these support services.

Darrell Bazzell, the vice chancellor for finance and administration at UW-Madison, said the university anticipates holding the line at a $1,000 differential tuition rate between nonresident domestic and international students. “What we’re trying to do is accommodate the reality that it costs more to educate an international student in a post-Sept. 11 environment. The requirements we have to monitor international students are greater, and the cost of counseling and advising services is higher. We want to recognize that with our tuition structure,” said Bazzell. He said that the money collected from the higher tuition rate will go into the university’s general coffers, as opposed to into a segregated revenue stream, but added, “It’s our intention to allocate the dollars at least in part to cover the higher administrative costs of serving the international population.”

The student government at Madison opposed the tuition surcharge for international undergraduates. “It’s not a very equitable approach if it’s being done with the justification of balancing a budget,” said Derek Field, the vice chair of the Associated Students of Madison.

At the University of Illinois at Urbana-Champaign, international undergraduates in most fields will pay an additional $830 in tuition this fall while international undergraduates in engineering will pay nearly $3,000 extra. Half the differential paid by international engineering students is set aside for scholarships for Illinois residents. “Like so many public institutions, maintaining affordability for our stakeholders and especially our state residents is a big issue,” said Charles Tucker, the university’s vice provost for undergraduate education and innovation.

Purdue University charges international undergraduates an additional $2,000 in tuition, which, across its 5,282 undergraduates from abroad, yields more than $10 million in annual revenue. Of that the university has allocated roughly a million dollars in recurring funds for international programs and related services, said Michael A. Brzezinski, the dean of international programs. “We have had an increase in international undergraduate students over the last six, seven or eight years, and this funding helped alleviate some of the additional pressure for adequate services for these students across campus,” said Brzezinski, who said that this new pot of money has funded a variety of initiatives and positions across campus, including the hiring of a Mandarin-speaking psychological counselor.

Purdue first introduced a differentiated tuition rate for international students in 2011. Brzezinski said the decision -- which he was not involved in -- was explained to him in terms of tax contributions. While out-of-state students or their families pay federal (but not Indiana) taxes, international students pay neither state nor federal tax, and thus the thinking was that they should be charged a higher tuition rate (a lawmaker in Washington State employed similar logic in proposing a tax on international students two years ago).

Higher Fees

Both Michigan State and Ohio State Universities introduced a $500 per semester, or $1,000 per year, international undergraduate student fee in 2012. According to Jason Cody, a university spokesman, Michigan State previously had a $150 per semester fee for international undergraduates, but raised it to $500 in order to invest in new programming and resources to support the rapidly growing international student population. Cody -- who listed predeparture orientations in China and the hiring of a Mandarin-speaking police officer as two examples of new investments -- said revenue from the international student fee is not segregated but rather goes into the university’s general pool of funds.

At Ohio State University, revenue from the international student fee has likewise paid for new orientations for students in China as well as study abroad scholarships and information technology needs for the international programs office. “I can’t speak to what the future may hold given the financial situations at our university and other universities, but right now that fee and the monies go exclusively toward international programs, with the lion’s share going directly to programs that address the needs of our international students,” said William Brustein, the vice provost for global strategies and international affairs at Ohio State.

In an announcement about the introduction of a new $500 per semester fee for international undergraduates in fall 2014, Penn State pledged that all proceeds “will be used to directly support international student programs and services.” At Minnesota, the $125 per semester international student academic services fee introduced in 2013 is also a segregated fee, the funds earmarked to “enhance academic services for international students, with the focus of ensuring retention, timely graduation and student satisfaction with their University of Minnesota experience.”

Nowhere to Turn

The universities that have introduced special tuition rates or hefty fees for international undergraduate students are in many cases brand-name institutions that have no trouble attracting international students -- and in fact have struggled to cope with rapid influxes in recent years. The University of Illinois at Urbana-Champaign and Purdue University are the top two public universities in terms of international student enrollments nationally.

At the same time that these universities are seeking to raise more revenue from their international students, some are seeking to attract them by effectively charging cheaper in-state rates. As one example, Minnesota State University at Mankato automatically offers a cultural contribution scholarship to all incoming international undergraduates that covers the difference between in-state and out-of-state tuition and which students can maintain by earning a 2.5 grade point average and participating in 25 hours of “culturally related” activities each semester. Stephen J. Stoynoff, the interim dean of international affairs at MSU-Mankato, said 575 of the university’s 745 international undergraduates receive the scholarship, with most of those who don’t being those who are sponsored by third parties.

“We are not Purdue, we’re not UC Berkeley, we’re very aware of that,” Stoynoff said. “We have a role to play in higher education and we think we represent an excellent value and return on investment for any student, domestic or international, who chooses to study here but we also recognize that for many international students who are sponsoring themselves that cost is a factor. It [the scholarship] has probably been one of the most important factors in us being able to double the number of international students on our campus in the last five years.”

Starting with new students next January, however, MSU-Mankato plans to adjust the scholarship so that it covers 90 percent of the differential between in-state and out-of-state tuition with international undergraduates covering the remaining 10 percent. Stoynoff said that the funds raised from this change this will go toward international programs and services.

“It was a very difficult decision to make knowing that the cost of tuition is one of the major factors for why students choose Minnesota State Mankato when they’re coming from abroad," he said, “but we also know that with a doubling of student enrollment, with a tuition freeze by the legislature and with no change in the operating budget for international student services and programming and staffing, we didn’t have anywhere to turn.”


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