As China expanded its higher education system and produced more college graduates during the first decade or so of the 21st century, American colleges and college towns benefited economically from the money many of those students spent pursuing master’s degrees in the U.S.
And contrary to notions that Chinese nationals were displacing American students, their tuition money actually helped more American students attend college by subsidizing their studies and fueling graduate program growth.
Those are two of the key findings in a new working paper that international education leaders say is relevant to U.S. policy debates about immigration and student visa policies.
The paper, published in October 2025 by the National Bureau of Economic Research, comes at a time when the Trump administration is subjecting international students to greater scrutiny, and some congressional lawmakers are calling for limits and even outright bans on student visas for Chinese nationals over concerns about espionage and theft of intellectual property.
Fanta Aw, executive director and CEO of NAFSA: Association of International Educators, said the paper’s findings support what migration scholars have understood for decades: “Whenever you have a major shift, particularly a demographic shift of young people, and access to education in one part of the world, it will generally have some level of implications for other parts of the world.”
“The big question, I think, moving forward is: Will that continue to be the case or not?” Aw added. “Will the U.S. continue to benefit from a ripple effect from different parts of the world?”
For the paper, the authors — researchers from the University of California, San Diego and Stanford University — examined two datasets that allowed them to track the movement of Chinese college graduates who journeyed to the U.S. to study.
The first dataset contained individual college admissions data from China that included each student’s home city, major and admission year between 1999 and 2011. The second dataset was the federal government’s Student and Exchange Visitor Information System, which keeps track of all international students who enroll in college in the U.S.
The period the researchers examined represents what they describe as “one of the most dramatic higher education expansions in modern history” — when the number of Chinese universities and colleges doubled between 1999 and 2010 and the nation’s enrollment soared from about 1 million students in 1998 to over 8 million by 2018.
Between 2005 and 2019, the number of Chinese students enrolled in U.S. universities grew from around 62,000 to over 317,000, the paper states.
Did the influx of Chinese students displace American students? According to the paper, each additional Chinese master’s student is associated with an increase of approximately 0.26 in American master’s students.
“Enrolling more Chinese students allows universities to expand their offerings, and it leads to the growth of these new master’s programs in STEM, and that kind of essentially allows there to be increasing enrollment for American students and other international students,” said Gaurav Khanna, an economic professor at UC San Diego and co-author of the paper.
“You get the revenue from Chinese students and that allows you to keep tuition rates low for U.S. students. It’s the opposite of the crowd-out story that you might think,” Khanna added.
College towns also benefit, Khanna said, because “you see more job growth, even outside the university.”
“Chinese students are buying cars, going to restaurants, and that sort of props up the economies around these colleges,” Khanna said, “so it has a positive impact on local economies.”
