New funding models for international education

23Sep '16

New funding models for international education

By Mitch Leventhal

Many institutions continue to talk about ‘performance-based budgeting’ and, what I am advocating here might be aptly called ‘performance-based reinvestment.’  What I am advocating is an approach which create new financial resources which can be reinvested to achieve the many internationalization goals which have been committed to in strategic plans, by presidents and trustees, but which are regularly underfunded.

Despite recent declines in incoming international students, the United States remains the most desired educational destination worldwide. Despite the recent downturn (which may be linked both to the political climate and unfortunate incidents of violence), we can safely expect continued long-term growth. This growth is counterpoint to U.S. demographic projections which indicate looming declines in domestic enrolment. In the long-term, globally sourced students can fill the gap, and U.S. institutions will continue to have significant capacity to absorb increased numbers.

U.S. institutions need to think strategically about how international students can help them meet their internationalization objectives, not simply how they can fill the enrollment and budget gap. It is critical to create a ‘virtuous circle’, connecting new income associated with international student tuition with the other imperatives of internationalization, i.e. study abroad scholarships, faculty internationalization grants, scholars-at-risk funding, international services infrastructure, etc.

The capacity building model we are advocating requires two things. First, senior university administrators (including presidents and chief financial officers) must admit that their institutional rhetoric is not currently matched with adequate funding. Second, they must agree to link international student recruitment to the other key internationalization goals. In other words, re-invest some negotiated quantum of the tuition revenue generated from international students into underfunded areas. For institutional leaders, it is time for them to put their money where their mouth is – and the strategy outlined here can help them do so.

The link below goes to a simple forecasting model – a tool – that provides institutions with the means to make a compelling case for internal change. It allows administrators to demonstrate in concrete numbers how goals and allocations affect each other, and the desired outcomes. Using this model, leaders can demonstrate the advantages of redirecting some percentage of incoming international tuition revenue back toward international operations holistically. It is up to each institution to determine how these funds would be allocated among its various priorities, be they study abroad scholarships, faculty internationalization grants, program subsidies, or professional development and administrative support systems. Institutions can determine what percentage of ‘new’ income can be ‘swept’ from the first year’s international student tuition, and redirect that toward internationalization goals. The percentage will vary significantly by institution, but I you will find that even a small percentage can make a substantial difference in terms of financial resources to meet strategic internationalization goals. This forecasting model allows you to test your recruiting assumptions against your core internationalization capacity objectives.

I encourage all colleges and universities to explore your own opportunities using this tool. Even small numbers can create meaningful impacts; five new study abroad scholarships per year as a result of this strategy means five lives changed. However, as I have maintained in the past, I believe that, in most cases, the benefits can be far more significant than just a few scholarships.

This forecasting model is designed to allow all types of institutions – small and large, public and private – to concretely demonstrate how the changes advocated here can produce positive, tangible capacity improvements in a very short time. The model can be downloaded here: https://tinyurl.com/y932yrr2