Trump Administration Proposal Would Increase University Dependence on Foreign Students

Among the many cuts in President Trump’s proposed budget are reductions for the National Science Foundation and the National Institutes of Health, the two chief funders of STEM research in universities. The issue raises fundamental questions that should have been addressed long ago, one of which is the role of foreign students.

As I have said here before, I really enjoy doing research; it’s one of the big attractions of being an academic. But as with most activities in life, money has a distortionary effect on research. In many cases, it causes a professor to cross the line between scholar and entrepreneur (the university being the “business” and NSF/NIH being the “customers”), with the role of the funding changing from providing support for research to becoming the goal of the work. It is common for universities, departments and individual faculty to be judged by “the color of their skin” — their amounts of federal research funding — rather than “the content of their character” — the scientific impact of the work.

This has perverse effects galore. It means, for instance, that many researchers choose to do work that “sells” rather than the work in which they have the best, most innovative ideas. So they work on incremental research and publish work that only a few people in the world will read in full, and forego starting projects for which they would have excitement and the potential to make a genuine contribution to STEM.

The tech industry lobbyists love to say that employers turn to hiring foreign workers because insufficiently many American students pursue graduate study. But they’ve got it exactly backwards; it’s the presence of foreign students that causes the low domestic numbers in graduate programs, due to downward pressure on salaries at the graduate level. This was recognized by the very same NSF in an internal memo back in 1989. The document explicitly called for bringing in more foreign students to reduce wages, thus giving NSF-funded research “more bang for the buck.”

Sadly, the Trump administration, ostensibly skeptics on the positive value of immigration, actually would increase the universities’ dependence on international students. This would be the effect of an NSF proposal to deal with the cuts by reducing the number of NSF graduate fellowships, which are open only to U.S. citizens and permanent residents.

There is nothing jingoistic about getting more domestic students into STEM graduate programs. The industry claims to want this, and even Hillary Clinton has called for increasing the number of NSF graduate fellowships.

In fairness, I shouldn’t be blaming the White House here. The idea of simply increasing reliance on foreign students seems to have come from NSF Director France Cordova, and, as noted above, is consistent with the NSF historical mindset. The agency, by the way, has often made supportive statements about foreign students to the press and Congress, and has proactively conducted its own research aimed at placing foreign students in a positive light, typically (and ironically) claiming no adverse effects on wages and so on.

Not only are the international students cheap, but they are also, ahem, “loyal.” This is well-known in academia, but for you outsiders, this quote neatly encapsulates the issue (n Computerworld, February 28, 2005):

Most of the students enrolled in the New Jersey Institute of Technology’s graduate program are foreign nationals. The Newark-based school has so far received 208 applications for admission in computer science master’s degree programs next year, with about 165 of those applications from foreign students, said Stephen Seideman, dean of the school’s college of computing science. The foreign students “will do everything they can to stay here,” he said.

The 1989 NSF report predicted, correctly as it turned out, that the stagnant wages resulting from the foreign influx would drive Americans away from grad programs. Even Texas Instruments, long in the vanguard of pressing Congress to expand the H-1B work visa program, testified that TI has no shortage of American applicants for engineering jobs; TI said the problem was lack of U.S. applicants with grad degrees. What TI didn’t mention is that, as seen above, the H-1B program caused that lack, rather than being a remedy for it.

So, for the NSF to turn to reducing a program for U.S. citizens and permanent residents as its first resort in coping with funding cuts is very troubling.

By contrast, the NIH’s proposal for handling budget cuts is to reduce university overhead charges, which run 50% or more at the large institutions. If, say, a researcher wants $250,000 of funding, the government agencies must pay her university $125,000 for “keeping the lights on,” for a total of $375,000. Needless to say, the overhead money goes to a lot more than electricity, often on things quite unrelated to research. In other words, funded research is a cash cow for the universities.Talk about money having distortionary effects!

Actually, the Obama administration tried to cut overhead charges, only to be pounced on by 600-pound gorillas like Harvard and MIT. A critic quoted in that linked article put it well:

Harvard is taking the government to the cleaners…The amount of taxpayer money that goes to support these private schools is immense, and of course, Boston is at the epicenter of this. The federal government should not be in the business of subsidizing building construction or administrative aggrandizement.

Reduction of allowable overhead charges is the obvious and most reasonable way for the federal government to reduce costs while maintaining quality of the research. It might mean that universities hire fewer administrators and build fewer rock climbing walls in the gym, but research level could be maintained and even increased. This would be true “bang for the buck.”

No question about it — the NSF and NIH have “made this country great” in the world of STEM. And it is not a question of whether basic or applied research should be funded; we need both, though of course the overall level we can afford is open to discussion. But the federal government, especially this administration, should not be taking measures that discourage American students from STEM graduate study.