The number of new international students enrolled at U.S. colleges and universities dropped by 43% this year, on top of a double-digit decline during the first three years of the Trump Administration. Observers are hopeful that more immigrant-friendly policies under the Biden Administration will renew the pipeline of international students.
The number of international students in the country is one indicator of entrepreneurship. In some cases, international students stay in the United States to start businesses directly after school. In other cases, the connections they make here spark cross-boarder investment and networks that propel companies internationally. A 2018 policy brief from the National Foundation for American Policy found that more than half of U.S. startup companies valued at over $1 billion were created by immigrants.
Manan Mehta, co-founder of the Silicon Valley-based venture capital firm Unshackled Ventures, is optimistic that the incoming government will change the tracked decline of international student enrollment, but he said there are many who have already lost out on educations in the United States. Unshackled offers pre-seed funding to immigrant entrepreneurs.
“It’s going to be incumbent on us, both as private citizens and public servants to figure out how we correct that,” he said.
President-elect Joe Biden tapped Alejandro Mayorkas, deputy secretary of homeland security under Obama, for DHS secretary. If confirmed, Mayorkas, an immigrant from Cuba, would be the first immigrant and the first Latino to run the department.
As universities have struggled with a balance of in-person versus online classes, a November report from the Institute of International Education showed a 43% decrease in new international student enrollment this fall.
While the pandemic has had clear influence on student numbers, the drop comes after a years-long decline in enrollment. Since the number of new international students hit a peak in the 2015/2016 school year, new international student enrollment had dropped by nearly 11% by the 2019/2020 school year, before the pandemic had begun.
The loss of more than 33,000 new students in those four years could have many causes, but academic leaders have cited the creation of an ‘unwelcoming’ environment for immigrants during the Trump administration as a leading factor. The U.S. Citizenship and Immigration Services attempted to issue a memorandum in 2018 that would make international students more vulnerable to three- to 10-year bans on reentry to the U.S.; the Department of Homeland Security has proposed student visas have a fixed end-date of four or two years (currently student visas are valid as long as the holder is in school); Trump issued an executive order in June that suspended and limited H-1B visas until the end of the year; and Republican lawmakers asked the administration to suspend the Optional Practical Training program this year.
The OPT program allows students to remain in the United States and gain experience after they graduate college while remaining on their student visa. The program is especially important for entrepreneurship students who want to launch their own businesses after college, since efforts to obtain a work visa and sponsor become more complicated if you are self-employed.
Unshackled Ventures is hoping to change those opportunities. Unshackled offers pre-seed funding to immigrant entrepreneurs to help get their ideas up and running. They also work with immigrants to find the best way to get a visa to work in the U.S., and functions as a research and development lab to sponsor immigrants and students straight out of college so they can start their businesses.
“We look at it very holistically,” Mehta said. “That’s allowed us to have 100% success for our founders in securing a legal work authorization, as well as then taking them on to permanent residency overtime.”
Mehta, a child of Indian immigrants, launched Unshackled with Nitin Pachisia in 2014, making its first investment the next year. To date, the organization has made over 50 investments, typically around $150,000 to $250,000, and it has made 140 immigration filings on behalf of its founders. Unshackled currently manages a fund of $30 million, which it gets from the Emerson Collective and other private investors.
Although the number of international students Unshackled works with hasn’t decreased, Mehta is concerned about the declining numbers of enrollment, saying the university system is the country’s gateway to entrepreneurship, and that international enrollment breeds competitiveness on a global scale.
“The biggest indicator of isolationism is when our university system numbers go down for national students, and that is frightening,” Mehta said. “Because that’s a gap that’s very easily filled by the rest of the world.”
Immigrants contribute billions of dollars to the U.S. economy. A Small Business Administration survey shows that from 1993 to 2016, small businesses accounted for nearly 62% of net new jobs. Mehta said immigrants are disproportionately more likely to create small to midsize businesses. Part of Unshackled’s goal is to create 100,000 jobs in the U.S.
As for what would happen if international student enrollment continues to decline? Mehta listed many problems: more jobs would be outsourced, the cost of living would rise for everyone and more products would be made outside of the country, among others.
From University To Business Founder
Colleges and universities are breeding grounds for entrepreneurs, providing pitch competitions and other resources, monetary, mentorship or otherwise, to their students. Harinee Sampath took advantage of these resources at the University of Michigan, where she graduated with a Master in Business Administration. In 2015, with help from awards from the university’s Michigan Business Challenge and Dare to Dream grants, she launched her company Prayani, which brings Indian yogurts and spices to a U.S. audience.
Sampath came to the U.S. from India in 1999, studying and working for many years before earning her green card. She said had she attempted to start her business while on a student or H-1B visa, it would have been a much more complicated process.
“I actually ended up waiting until after I got my green card to give me the flexibility to do the things that I wanted to do, even pursue the MBA,” Sampath said.
Stewart Thornhill, the executive director of the University of Michigan’s Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies, is an immigrant himself. He came on a green card from Canada to work at the university, but said international entrepreneurs may be better off working for a large company first rather than starting their own business directly out of college.
“I’m an English as a first language speaker, so I’ve certainly had as much as is possible stacked in my favor,” Thornhill said. “But somebody coming from a non-English speaking background, given the political environment of the past four years, God, I wouldn’t fathom to offer advice.”
A nation of immigrants
The importance of international student enrollment is unquantifiable, and it goes beyond economic gains. Campus and business cultures are often defined by the diverse people it attracts, and many students rely on the cultural exchange.
Unshackled runs a university fellowship program, training and mentoring students, immigrants or not, around the country, helping them enter the world of venture capital. One of the fellows, Afua Asantewaa, wants to go into venture capital and financial technology to promote economic development in Africa. Although she is a U.S. citizen, her parents are from Ghana and Cote d’Ivoire, and she lived in Ghana when she was 6 to 9 years old.
Now 27-years-old and earning her MBA at Cornell University, Asantewaa argues that the U.S is a country of immigrants, and international student enrollment is vital for the country’s education system.
“I think you are not getting a truly global education, I would even say an American education, if you don’t have international students in the classroom,” she said. “International students bring in their experience from a business perspective too, or just a cultural perspective on innovation, on different things that are going on.”
Asantewaa called for higher education institutions to support their international students and to bring more students back into the classroom. In July, the Trump administration attempted to force international students to take at least one class in person this fall if they wanted to keep their visas. Harvard University and the Massachusetts Institute of Technology, among others, sued the administration, and Trump quickly reversed the decision.
“There was a reckoning that went on in 2019 and 2020 around who we are as a nation, and fortunately, we are a nation of immigrants still,” Mehta said.
This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.