US President Donald Trump's decision to halt Harvard University from enrolling international students has set off alarm bells across student and academic circles, with estimates indicating that the move could likely impact the U.S. economy — even as the MAGA administration doubles down on its “America First” agenda.
On Thursday, the Department of Homeland Security (DHS) barred Harvard from accessing the federal Student and Exchange Visitor Program (SEVP), effectively stripping the Ivy League school of its ability to sponsor foreign student visas. As reported by Reuters, the decision, which took immediate effect, threatens the academic future of roughly 6,800 students — nearly 27% of Harvard’s total enrolment — and leaves many at risk of deportation unless they transfer to other institutions.
On Thursday, the Department of Homeland Security (DHS) barred Harvard from accessing the federal Student and Exchange Visitor Program (SEVP), effectively stripping the Ivy League school of its ability to sponsor foreign student visas. As reported by Reuters, the decision, which took immediate effect, threatens the academic future of roughly 6,800 students — nearly 27% of Harvard’s total enrolment — and leaves many at risk of deportation unless they transfer to other institutions.
But beyond the impact on students and academia, the move has severe implications for the American economy. According to The Conversation, international students contributed more than $44 billion to the U.S. economy last year, a figure that exceeds even the total value of America’s telecommunications and information services exports.
A national 'export' at risk
Higher education is considered the 10th-largest U.S. export, per the Bureau of Economic Analysis. While students physically come to the United States, the revenue they generate is treated as an export because it brings in foreign capital. Harvard’s sudden disqualification from enrolling international students threatens to put a significant dent in this economic pillar.
International students typically arrive with an estimated $29,000 each to spend annually on tuition, housing, food, books, and other essentials. That money is not just supporting elite university budgets — it is also fueling local economies across America.
The Conversation notes that, on average, one job is created for every three international students in the U.S. In the 2023–24 academic year, that amounted to approximately 378,175 jobs directly supported by these students — a number that swells when considering indirect employment like supply chains and service providers.
Local economies face ripple effects
In a city like Cambridge, Massachusetts, where Harvard is based, the decision will likely reverberate across businesses that depend on the steady economic activity driven by the university’s global community. From real estate and retail to restaurants and research labs, the financial vacuum created by the absence of nearly 7,000 students will likely be evident.
This kind of impact is not limited to elite private schools. In fact, The Conversation reports that the largest share of international students attend public institutions. For example, just three state universities — Arizona State University, University of Illinois Urbana-Champaign, and UC Berkeley — attracted international students who pumped nearly $1.7 billion into their local economies and supported over 16,800 jobs.
Even smaller communities feel the effects. In Mankato, Minnesota — a town of just 45,000 — the local university's 1,716 international students generated $45.9 million in economic activity and supported nearly 190 jobs.
Shrinking domestic pool, growing reliance on foreign students
The move to target Harvard comes at a time when U.S. colleges are grappling with a shrinking pool of domestic applicants. Due to demographic shifts, American colleges today enroll 2.3 million fewer domestic students than they did a decade ago — a drop of 10.7%, The Conversation report states further. Many institutions have increasingly turned to international students not just to fill classroom seats but also to maintain finan ..
Moreover, international students are rarely a burden on public resources. Fewer than 20% receive any federal grant funding, and among undergraduate exchange students, that number drops to a mere 0.1%. Most are funded by families or foreign sponsors, meaning they subsidize domestic students by paying full tuition without relying on need-based aid.
Trump’s culture war vs economic reality
The Trump administration justifies the move as part of a wider crackdown on universities it accuses of fostering “violence” and “coordination with the Chinese Communist Party,” according to Reuters. Homeland Security Secretary Kristi Noem stated in a letter to Harvard that the decision was about accountability, not economics.
“It is a privilege, not a right, for universities to enrol foreign students and benefit from their higher tuition payments to help pad their multibillion-dollar endowments,” Noem said.
But critics argue that the decision is political retaliation masquerading as immigration enforcement. A university spokesperson described the action as “illegal” and “retaliatory,” and Reuters reports that a federal judge has already ruled in a related case that student visas cannot be revoked without due process — though it remains to be seen how that affects Harvard’s case.
The Trump administration has already frozen more than $3 billion in federal funding to Harvard and continues to press the university to dismantle diversity programmes and comply with other politically charged demands.
How the decision undermines America's long term interests
Yet critics say the administration’s actions are short-sighted. As Bloomberg reported, Fanta Aw, executive director of the nonprofit NAFSA: Association of International Educators, warned that the decision unde ..
“Losing international students’ contributions will negatively impact domestic students’ understanding of the world and have dire consequences for the country’s economic strength, security, and global competitiveness,” Aw told Bloomberg. “These outcomes run counter to the administration’s stated goal of making America safer, stronger, and more prosperous.”
Congressman Jaime Raskin called the move “an intolerable attack on Harvard’s independence and academic freedom.” Immigration advocates also expressed alarm. Aaron Reichlin-Melnick of the American Immigration Council called the students “collateral damage” in Trump’s wider ideological war.
While the Trump administration frames the revocation of Harvard’s SEVP certification as a moral and political necessity, the decision may have far-reaching and unintended economic consequences. International students are not just scholars; they are also drivers of local economies, creators of American jobs, and contributors to one of the nation’s most valuable exports.
If Harvard’s case becomes a template for similar actions against other universities, the economic cost could stretch well into the tens of billions — raising serious questions about how “Making America Great Again” aligns with measures that threaten to weaken one of its most profitable and globally respected sectors.
Source Name : Economic Times