Although we typically discuss international students as one group, it is important to keep in mind that these students are not one uniform population (Levin, 2012). Students from China and students from Saudi Arabia are just as different as students from China and the United States. Institutions of higher education (IHE) must diversify their international student portfolio to stay true to the mission of diversity. In order to diversify this portfolio, the funding structure for international students must change. A common model for tuition and aid disbursement in the U.S. is the high-tuition, high-aid (HH) model. This model is often used to execute student access and diversity missions (Curse &Singell, 2010). Unfortunately, this is often done without regard to international student diversity and access. Here I will explore the high tuition high aid (HH) model and its potential application to international students.
The Current Application of the HH Model
Many IHEs use price discrimination in order to attract high achieving or culturally diverse students, and allow access to students who would not be capable of attending otherwise (Weisbrod, Ballou, & Asch, 2008). This is done to craft a class where the students themselves can be inputs that increase the value of the overall educational experience (Winston, 1999). Price discrimination works because students have different price elasticities, what a student is willing to pay for college. For domestic students, funding is awarded based on their expected price elasticity (Toukoushina & Paulsen, 2006). Students who can afford to pay more will often do so because they are not as price sensitive and vice versa (Curse & Singell, 2010). This principle is the foundation of the HH model.
In the HH model, the average student pays more money but this creates surplus revenue that is used to fund financial aid for students who could not afford to attend, or would choose a different IHE, otherwise. It is known that this system often does not generate enough revenue to aid all of the students that need funding: the excess funding must come from government subsidies or fund raising (Curse &Singell, 2010). IHEs with international students may submit the international student’s excess tuition dollars into the pot of money to help fund domestic students. This is typically a one-way street. International students are not usually aid eligible.
Price discrimination in higher education is a way of achieving vertical equity. This is the idea that students should be able to attend college despite their ability to pay. This idea need not be applied to solely domestic students. International students bring all of the advantages that justify price discrimination: cultural diversity (Caluya, Probyn, & Vyas, 2011); high academic aptitude (Mamiseishvili, 2012); and, potentially, economically diverse students (Aw, 2012). International students should not be “cash cows” used to produce revenue for domestic students (Caluya et al., 2011). They are actually valuable inputs that can enrich the student experience. Perhaps these students should be funded accordingly.
Mission of Diversification: Application to Types of IHEs
The decision to fund international students would be heavily dependent on the mission of the school. It is known that IHEs are constantly trying to balance their mission and their finances, this is known as the two-good framework. The mission of an institution often depends on the type of school and the source of their funding (Weisbrod, Ballou, & Asch, 2008). Public schools tend to have their mission focus on students from their own geographic area, so they may not be able to implement a model such as this. However, many private institution’s missions do not specify that they are to serve only domestic students. In fact, many scholars believe that the mission of an IHEs goes beyond borders (Aw, 2012). In addition, in 2011, 50% of institutions said that their missions include international or global education (CIGE, 2012). Schools who believe this should not depend on international students to pay the way of domestic students; instead they should work to ensure access to international students the same way they ensure access to domestic students. This means attempting vertical equity for international students as well. Unfortunately, while some schools may be attempting to implement similar plans for international students, many are not. The international HH model is a way to do exactly this.
A New HH Model: The International HH Model
A model that supports international students would have to put international and domestic student tuition into two separate pots, domestic and international. International revenue would no longer be used to supplement domestic students, but rather to supplement international students from developing countries that could not afford U.S. tuition just yet. As the elasticity of the students from different countries changes so too would the cost of tuition for these students. For example, Chinese students could subsidize the tuition of Indonesian students for a few years. When the Indonesian economy picks up, the Indonesian students could help subsidize the new developing nation’s students; this cycle could continue. The most qualified applicants from all over the world would be able to attend, not just the most qualified applicants from the richest countries. This could apply to economic diversity within countries as well. Scholars and practitioners have long lamented the fact that the U.S. only educates the young elites of other countries (Aw, 2012). The application of this model could help to correct this, by funding less wealthy students.
By examining the present HH model one can see that international students are often used as “cash cows” to add to domestic student funding (Caluya et al., 2011). Presently, the HH model does not account for the need to diversify international students, but it could. Diversifying international students would stay true to the mission of diversity and access in a global sense. This is something we should be moving toward in an increasingly globalized world.
Aw, F. (2012). The International Student Question: 45 Years Later. Journal of College Admission, (214), 10–11.
Caluya, G., Probyn, E., & Vyas, S. (2011). “Affective Eduscapes”: The Case of Indian Students within Australian International Higher Education. Cambridge Journal of Education, 41(1), 85–99.Center for International and Global Engagement (CIGE). (2012). Mapping Internationalization on U.S Campuses. American Council on Education.
Curs, B. R., & Singell, L. D. J. (2010). Aim High or Go Low? Pricing Strategies and Enrollment Effects When the Net Price Elasticity Varies with Need and Ability. Journal of Higher Education, 81(4), 515–543.Levin, John S.. Understanding the Community Colleges. New York: Routledge, 2013. Print.
Mamiseishvili, K. (2012). International student persistence in U.S. postsecondary institutions. Higher Education, 64(1), 1–17. doi:10.1007/s10734-011-9477-0Toukoushian, R. K., & Paulsen, M. B. (2006). Applying Economics to Institutional Research. New Directions for Institutional Research No. 132. San Francisco, CA: Jossey-Bass.
Weisbrod, B. A., Ballou, J. P., & Asch, E. D. (2008). Mission Money: Understanding the University. New York, NY: Cambridge University Press.Winston, G. (1999). Subsidies, hierarchy and peers: the awkward economics of higher education. The Journal of Economic Perspectives, 13(1), 13-36.