ARCHIVE:: MARCH 2002 :: EDUCATION

A New Scholarship Strategy
Colleges Give More Aid to Foreign Students. Does That Mean Less for You?

By Daniel Golden
Staff Reporter of The Wall Street Journal

U.S. colleges have long been off-limits to high-school graduates abroad, except those who were wealthy enough to pay their own way. The federal government doesn't offer aid to foreign students. And of the more than 250,000 foreign undergraduates in this country, only 8% receive financial aid from their college or university, while 81% rely on family money to pay their way. That compares with about one-third of U.S. students getting such aid.

But now that's changing. Faced with growing competition for the attractive international market and reluctance among foreign students to venture here after Sept. 11, more U.S. colleges are rethinking the longtime practice of charging them full tuition.

These colleges have begun stepping into the breach left by the federal government's policy. Often criticized for allocating seats to foreign students that could be filled by Americans, colleges are starting to hand them merit- or need-based scholarships out of institutional funds -- again, arguably at the expense of domestic students.

'Impossible to Afford'

Because foreign students generally achieve higher grades and graduation rates than their domestic counterparts, colleges are turning to these scholarships to boost enrollment without lowering academic standards. While this spending is still a small fraction of overall aid, it represents a significant departure from the traditional treatment of foreign students as cash cows.

"For any middle-class family in India, it's impossible to afford U.S. fees," says Rashna Patel, an 18-year-old freshman at Trinity University in San Antonio, which began providing aid to foreign students last fall. Ms. Patel, a Bombay resident whose parents are both flight attendants for Air-India, was one of four students awarded $10,000-a-year merit scholarships -- almost two-thirds of the school's $16,410 annual tuition.

"The [college] fees back home, for all students, amount to less than $10 a year including books," she says. "Because of this scholarship, and the way my family saved up all these years, we were able to squeeze through." Ms. Patel adds that the increased aid brings another benefit: It is diversifying campuses. "You're not just getting spoiled brats from each country anymore," she says.

While the general public may be warier of foreign students in the wake of reports that several hijackers attended U.S. flight schools, and the government now tracks the movements of foreign students more closely, colleges fearing an application drop-off are courting them more aggressively than ever.

Boston University will offer half-tuition merit scholarships to 90 foreign applicants this fall, expecting about 20 to accept. Foreign students make up 7% of its 15,000 undergraduates, and a higher proportion of tuition income. Paul Greene, director of international admissions at the private university, says the scholarship program was "in the pipeline" anyway but was accelerated after Sept. 11. Even though they pay just half of BU's $27,000-plus tuition, the foreign students still "add significantly to revenue," Mr. Greene says.

Trinity, a private liberal-arts college, is also expanding scholarships in reaction to the terrorist attacks, which imperiled its goal of increasing its foreign-student population to 7% from 3%. The school, which has 2,400 undergraduates, intends to give out six $10,000-a-year scholarships to foreign students this fall and another half-dozen for lesser amounts.

"Like most institutions with an active international recruitment program, we were set back this year by the fact that travel was largely canceled," says international admissions coordinator Mark Moody. He says the scholarships, which are intended "to give some incentive to students to consider Trinity over another school they might know more by name," don't affect aid available for domestic students because they were approved separately by the university administration.

Some critics don't buy that argument. "As a father who's trying to save money for my older daughter's college education, I can't understand why universities think the public would or should accept that," says Daniel Stein, executive director of the Federation for American Immigration Reform in Washington, a nonprofit advocacy group that seeks to restrict immigration. "If you're charging U.S. citizens full freight and giving foreign students scarce subsidies, you have a fundamental fairness issue."

Market Share

U.S. universities have long provided fellowships and other aid to foreign graduate students, since competition for these students is greater. Today, about 40% of the country's 240,000 foreign graduate students receive such help. But the impetus for financial aid for foreign undergraduates has been quietly building for several years, as U.S. colleges lost market share in the face of aggressive recruiting by schools in Britain and Australia, and as economic collapses from Asia to Argentina impoverished potential applicants.

At Yale University, which last year began offering aid to international students regardless of need, the proportion receiving aid jumped to 62.1% in the class of 2005 from 24.7% in the class of 2004. Both Emory University, in Atlanta, and Mount Holyoke College, of South Hadley, Mass., initiated merit aid programs for foreign students last fall.

Even some taxpayer-funded state universities are aiding foreign students -- though many others are forbidden to do so. Michigan State University offers $1,000 merit discounts off its out-of-state tuition rate to 40 foreign freshmen, up from 10 when the program started in 1994.