The story of American college admissions is usually told as a teen drama: stressed‑out seniors, impossible acceptance rates, TikTok sobbing videos. That’s the wrong scale.
What’s unfolding now is an economic, demographic, and immigration shock that is quietly hollowing out universities and, if current policy holds, will cost the United States tens to hundreds of billions of dollars a year.
Yes, university admissions are down drastically. But the more important question is why—and what we’re choosing to do about it.
At the center of this isn’t just American high‑school kids; it’s international students who used to be the system’s shock absorber and are now being driven away by our own policies.
A Shrinking Pipeline At Home
Start with the structural problem no amount of clever branding can fix: there are fewer teenagers.
U.S. colleges already experienced a 15% enrollment decline between 2010 and 2021, meaning 2.7 million fewer students overall, including a 350,000‑student plunge in the first pandemic year alone. This is the front edge of the long‑predicted “demographic cliff” created when Americans had fewer children after the Great Recession.
Demographers now expect:
- By 2039, there will be roughly 650,000 fewer 18‑year‑olds per year—a 15% drop compared with today NPR/Hechinger.
- The number of high‑school graduates will erode by 13% by 2041, with steep regional declines: Illinois down 32%, California 29%, New York 27%.
That’s the supply side. On the demand side, belief in college is falling apart.
The share of high‑school graduates going directly to college dropped from 70% in 2016 to 62% in 2022, and only about a quarter of Americans now say a bachelor’s degree is very important for getting a good job NPR/Hechinger. After a decade of tuition spikes, FAFSA chaos, culture‑war attacks on campuses, and stagnant wages, that skepticism isn’t crazy; it’s rational.
So domestic admissions are shrinking because there are:
- Fewer 18‑year‑olds, and
- Fewer of them willing to sign up for a system they increasingly don’t trust.
For a while, universities had a backstop. Then we set it on fire.
International Students Were the Lifeline. We’re Cutting It.
For most of the last decade, international students covered the cracks. They were the quiet answer to the demographic cliff.
- In 2022–23, more than 1.5 million international students studied in the U.S., making up about 5.5–6% of total enrollment.
- They contributed roughly $40–44 billion per year to the U.S. economy and supported about 370,000–400,000 jobs, half of them on campus and half in local housing, food, and services.
At many institutions, especially regional publics and mid‑tier privates, full‑pay international students effectively subsidize domestic students’ financial aid. As one analysis puts it, there’s often a “1‑to‑1 relationship” between those full‑pay internationals and scholarships for U.S. students.
Now that backstop is failing, and not by accident.
Interest Is Collapsing
International interest in the U.S. has fallen back to pandemic‑era lows.
- Early 2025 search data from Studyportals shows a 50% collapse in interest in U.S. programs between January and April, relative to the recent peak in 2023. Student searches for American degrees are being “cut in half,” with prospective applicants in the same session pivoting to the UK, Spain, Australia, Germany, New Zealand, and others.
- A Keystone Education Group survey found 42% of overseas students have reconsidered studying in the U.S., citing visa restrictions, safety concerns, and the political climate. Among European students, 58% say Trump’s reelection specifically has made them less likely to come.
This isn’t just sentiment; it’s enrollment.
- SEVIS data show an 11% drop—about 130,000 fewer international students—between March 2024 and March 2025, with a stunning 27.9% decline among Indian students, who are a key pipeline into STEM master’s programs.
- A separate survey by the Institute of International Education found a 17% plunge in new international students arriving in fall, even though total international enrollment only dipped about 1% because many graduates stayed on temporary work visas. Nearly 60% of colleges reported a decrease in new foreign students, while only 30% saw gains.
If you’re a small or mid‑tier institution that built its budget around international tuition, that’s not a wobble—that’s a gut punch.
Visa Chaos and Bans Are Doing Real Damage
A big piece of this is self‑inflicted policy chaos.
- Between May 27 and June 18, 2025, the State Department paused student visa interviews during peak season, then restarted them with vague new social‑media vetting rules that consulates had five days to implement NAFSA.
- F‑1 issuances were down 12% from January–April, and 22% in May, compared to 2024. June data may show an 80–90% collapse, based on appointment bottlenecks in major sending countries like India, China, Nigeria, and Japan NAFSA.
- A June 4 executive order imposed visa bans on 19 countries, with rumors of 36 more, threatening $3 billion in annual economic contributions and more than 25,000 jobs even before broader enrollment declines are counted NAFSA.
It’s not just that visas are harder to get. The process has become unpredictable and politicized. That’s deadly in a market where families are picking between “stable and boring” (Canada, UK) and “chaotic and maybe hostile” (us).
The data on visa refusal rates are even harsher: a 10% increase in F‑1 refusals is associated with a 12.2% drop in new international enrollment. And we’ve been hiking refusal rates while advertising “America First.”
The Bill: $7 Billion Now, Up To $481 Billion a Year Later
You asked specifically about the cost. There are two layers: the immediate hit to local economies and the long‑term damage to national GDP.
Short‑Term: $7 Billion and 60,000 Jobs
Scenario modeling by NAFSA and JB International looked at what happens if new international enrollment falls 30–40% and total international enrollment slips 15%.
Their conclusion:
- The U.S. could lose nearly $7 billion in economic impact in a single academic year and more than 60,000 jobs, spread across higher ed and local communities.
Those numbers aren’t abstract. CNBC, summarizing the same projections, describes up to 150,000 fewer international students in 2025–26, a 15% decline in total international enrollment, and a $7 billion loss—at a time when many colleges are already on financial life support as per CNBC.
The Scientist lays it out in the research context: fewer internationals mean less revenue, fewer jobs, and a less dynamic scientific environment. California alone is projected to lose more than $1 billion in impact under these scenarios.
Long‑Term: Up to $481 Billion in GDP, Every Year
The long‑run numbers are much uglier.
A new analysis from the Institute for Progress, summarized by ICEF Monitor, focuses on what happens if immigration changes—especially to Optional Practical Training (OPT) and H‑1B visas—drive down the number of foreign STEM graduates who stay and work in the U.S.
They model two scenarios:
- Scenario 1: A one‑third reduction in the number of foreign STEM graduates retained in the U.S.
- Scenario 2: A 10% reduction.
Under Scenario 1:
- Over 10 years, the U.S. ends up with an economy 0.79–1.57% smaller than it otherwise would be.
- In today’s terms, that’s a GDP loss valued at $240–$481 billion per year—the equivalent of the entire economies of states like South Carolina or Wisconsin disappearing.
Even the smaller Scenario 2—just a 10% drop in retained STEM graduates—cuts $72–$145 billion from annual GDP.
These estimates aren’t pulled from thin air. They reflect the reality that:
- 44% of billion‑dollar “unicorn” startups from 1997–2019 were founded by immigrants.
- 46% of Fortune 500 companies were founded by immigrants or their children.
- 75% of high‑potential, venture‑backed immigrant founders first came to the U.S. as international students, not on work or family visas.
You clamp down on international students and their post‑study work options, you don’t just lose tuition. You cut off a massive share of future innovation, jobs, and tax base.
Meanwhile, Universities Are Quietly Shrinking Graduate Admissions
As if domestic and international admissions weren’t under enough pressure, institutions are also cutting back from the inside.
Faced with unstable federal funding and political uncertainty, universities are deliberately shrinking Ph.D. and other graduate cohorts:
- The University of Pennsylvania’s Perelman School of Medicine told some departments to cut Ph.D. admissions by about 35% for fall 2025, citing federal funding chaos Forbes.
- Harvard plans to drastically reduce Ph.D. intake over the next two years, pulling back on the very programs that feed research labs and the next generation of faculty.
Graduate students are the engine of research, teaching, and innovation. Shrinking those programs and shutting doors to international talent is the opposite of what a country facing labor shortages and global competition should be doing.
A Progressive, Pro‑Democracy Path Out of the Spiral
If you care about democratic norms, economic opportunity, and America’s role in the world, “fewer international students” is not a win. It’s a policy failure.
There is another way to read this cliff: as an opportunity to rebuild a saner, more equitable, more globally connected higher‑ed system.
1. Stabilize and Liberalize Student Immigration
- Guarantee predictable, expedited F‑1 and J‑1 processing in core sending countries. Students shouldn’t lose their futures because a consulate in Mumbai can’t get appointment slots under control.
- Protect OPT instead of threatening to rescind it. The modeling is clear: gutting OPT doesn’t just trim a program; it risks up to $481 billion in annual GDP over time.
- Carve students out of broad travel bans. Keep security vetting; stop using young researchers and undergrads as collateral in political theater.
In other words: if we need more nurses, engineers, climate scientists, and AI safety experts—and we do—stop making it a bureaucratic coin‑flip for them to get a visa.
2. Treat International Students As Part of Civic Infrastructure
The U.S. has long understood that educating foreign students is a soft‑power play: many future presidents, ministers, and CEOs abroad passed through American campuses.
A serious strategy would:
- Tie tax benefits for mega‑endowments and favorable research funding to commitments: enroll more low‑income and first‑gen domestic students, and maintain robust, equitable international intake.
- Build explicit study‑to‑residency pathways in critical sectors—healthcare, green tech, semiconductors—where retaining foreign graduates is in the clear national interest.
That’s not charity. It’s self‑preservation for a democracy competing with authoritarian regimes that are eager to poach the talent we push away.
3. Rescue Vulnerable Institutions, Not Just Brand Names
When a small, tuition‑dependent college dies, it doesn’t just clean up the market; it guts a local economy and civic anchor.
- Each college closure costs, on average, 265 jobs and $67 million in annual economic impact in its region as per NPR/Hechinger.
A progressive response would:
- Create state and federal support frameworks to stabilize regional publics and community‑anchored privates in exchange for accountability on access, completion rates, and community partnerships.
- Use shared services, cross‑campus degree consortia, and coordinated regional planning so every campus doesn’t have to run its own fragile, duplicative set of programs.
This treats higher education like what it is: public infrastructure for opportunity and democratic life, not just a loose collection of brands.
4. Rebuild Trust in the Value of a Degree
Finally, we have to fix the thing driving domestic students away.
That means:
- Radical transparency on outcomes: what graduates earn, what debt they carry, how long it takes to pay off. In plain language, not a PDF buried three clicks deep.
- De‑weaponizing the prestige arms race. Force disclosure on legacy admits, donor influence, and side doors so teenagers stop measuring their worth against the 4% admit rate at a school that admits 77 times more kids from the top 1% than the bottom 20% as per Forbes.
- Making civic education central, not incidental. If a degree is framed as training for thoughtful participation in self‑government in a fragile democratic moment, the case for college isn’t just economic; it’s ethical.
The Choice We’re Making
“University admissions are down drastically” isn’t just a statistic; it’s a mirror.
One reflection shows a country that responds to demographic decline and economic anxiety by turning inward: fewer spots, fewer visas, more walls, less trust. That path leads to shuttered campuses, lost innovation, billions in immediate economic damage and up to $481 billion a year in long‑term GDP losses—plus a slow erosion of the very institutions that hold a democracy together.
The other reflection imagines something more ambitious: using the pressure of this moment to make college cheaper, fairer, more transparent, and more open to global talent, while shoring up the public and regional institutions that actually educate most Americans.
We don’t get to avoid the demographic cliff. But we do get to decide whether we meet it with austerity and nativism—or with investment and openness that match our stated values about opportunity and democracy.
Right now, we’re choosing the former. The bill is already in the billions. The next line item, if we stay this course, will arrive with a price tag that starts with a four and eleven zeros.