Globalization and Higher Education: Domestic vs. Foreign Students

Introduction: Globalization and the Demand for Higher Education

Globalization involves a number of different elements, including economic integration, freedom of capital movements, and the increasing "transfer of knowledge, cultural stability" and an increase in cultural interactions (Al-Rodhan, 2006). The process of globalization has been fostered by industrial-age improvements in transportation, communication, and through political and economic liberalization. One of the antecedents of the era of globalization was the creation of the European Common Market. When this was extended to allow not only goods and capital to move more easily across borders but labor as well, it ushered in a new era of mass migration. Today, many of the world's leading cities have incredibly diverse populations, as people from all over the world are drawn by the economic promise of major urban hubs. One of the areas where this trend can be seen is in education. For decades, education has been championed as a pathway out of poverty. Aid programs to the developing world often focus on providing better access to education as a result of this reality (Grootaert, 1994).

Where education and globalization intersect most visibly is at the level of higher education. Many developing countries have relatively underdeveloped higher education sectors, whereas countries in the developed world have highly developed higher education sectors. These developed nations use their educational systems as a form of competitive advantage, producing talented graduates to be the leaders of tomorrow. People from outside these countries rightly recognize the advantages of an education at a Western institution, with preference typically given to instruction in English and to institutions with a strong international reputation. As such, demand for places at schools in the United States, United Kingdom, Canada, and Australia has increased substantially over the past couple of decades. Coupled with a decline in public funding for universities in many Western nations, many such schools actively compete for foreign students as a means of balancing their budgets (Besser, Cronau & Cohen, 2015).

Many people, however, feel that the pendulum has swung too far — that domestic schools are catering too much to foreign students. Many people in education and politics, as well as prospective students, have become concerned that the emphasis on recruiting foreign students has reduced opportunities for domestic students, creating a goal conflict within the higher education system (Bradshaw, 2014). From a political point of view, foreign students reduce direct cash outlays to universities, but they also reduce the national competitive advantage that countries enjoy from having built and maintained a high-quality higher education system. Educators are likewise caught in the middle, needing to balance the budget while maintaining simultaneous loyalties to providing a high-quality education to all. For public universities — state schools, or almost all universities in countries outside the United States — there is also a mandate specifically to provide an education for domestic students. It is my contention that while private schools are free to set their own mandates, publicly funded schools should maintain a focus on preparing domestic students and therefore should not display any trade-off of foreign students for domestic ones. Places for foreign students should come with the expansion of facilities, which ultimately benefits everybody.

The Core Case for Prioritizing Domestic Students

At the heart of the argument is that publicly funded schools have (a) an obligation to those who provide the funding and (b) a role in national competitive advantage. On the first point, a school naturally has a duty of care to any student who pays tuition. That responsibility is accepted by all parties as part of the contractual agreement between student and educational institution. However, in many countries — and at state schools in particular — universities also receive taxpayer funding. This makes the taxpayer a stakeholder in the higher education system. Taxpayers have children and wish for those children to do well in life. There is a direct correlation between a university education and higher income, so it stands to reason that a parent whose child is intellectually capable and disciplined enough to earn a four-year degree would want that child to have that opportunity. This view is not necessarily a strictly economic one — access to education need not be framed purely as an economic argument.

Access to education is, however, something widely regarded as desirable, and that makes it a commodity. It is also a commodity in which the world's major English-speaking nations hold a distinct competitive advantage. The neoliberalism that drives globalization inevitably seeks to create opportunities for the mobility of students, for knowledge transfer, and for talented people to live, study, and eventually work abroad. Vaira (2004) argues that the institutions leading the promotion of globalization — bodies such as the World Bank and the World Trade Organization — have sought to restructure the global education system in their own image, striving to defund it through the scaling down of social welfare systems.

This view is further supported by Kwiek (2001), who notes that globalization has come with the restructuring and reframing of higher education as a whole. Unwinding public education is presented as part of the broader process of unwinding the nation-state itself. Higher education's role has shifted toward readying people for the workforce rather than teaching them how to think. The university as a job-training institution has been attributed to globalization in a couple of ways. First, it is argued that higher education must prepare people for a globalized economy. If we are competing against the world, this argument posits, there can be no room in higher education for non-economic learning. This leads down a path toward education as a commodity, where its merit is determined solely by its economic value.

The second way is that globalization undermines the ability of the state to finance education, thereby leading schools to seek revenues elsewhere. Because schools can set their own prices for foreign students, and because improving economies around the world mean that for many foreign students there is low price elasticity of demand for higher education abroad, there are significant revenue opportunities available for Western universities. Alderman (2010) notes that a neoliberal free-market approach to education means that higher education should function as a global industry. The difficulty, of course, is that for many people in the West there are no corresponding opportunities overseas, because emerging markets simply do not yet have sufficient capacity. These domestic students then find that the capacity built with their tax dollars is going to foreign students rather than to themselves. When supply is constrained, a fully free-market system will invariably squeeze some buyers out of the market, which in the case of higher education is particularly damaging, given the limited reasonable substitution options available to most students.

National Interest and Competitive Advantage

With demand for higher education growing rapidly around the world, and supply constrained by a lack of funding in most emerging markets, some students will inevitably lose out on the opportunity for higher education. Jurisdictions that had supply problems twenty years ago are completely unable to deal with today's demand situation. The problem is most acute when the students being denied entry are domestic ones. They either scramble to find some other form of higher education — for-profit online schools, community colleges, and the like — or they are forced to delay their entry into the system. Advocates of the market approach would argue that any student who wishes to gain entry should be prepared to compete as hard as those who are currently admitted; that spots in universities should be based on merit, and that merit-based allocation allows for greater economic efficiency (Odin & Manicas, 2004). If this approach weakens a country's competitive advantage, the neoliberal view holds that this is acceptable, since the nation-state itself is entering into obsolescence. The neoliberal position regards the nation-state as anachronistic, regardless of how the majority of the world's people actually see it.

But for those who do not subscribe to the neoliberal, free-market point of view, higher education is one of the primary means by which national competitive advantage is generated. Given how difficult it is to build a high-quality system of higher education, it can serve as a source of sustainable competitive advantage. In the knowledge economy, maintaining a high level of knowledge is unambiguously a competitive asset. Scandinavian countries have long recognized this, providing higher education free of charge to their citizens with the understanding that high-value jobs require a high level of intellectual capability and educational attainment. National competitive advantage today rests almost entirely on the educational level of a country's population. Regardless of one's views on educating citizens of other nations — and it is genuinely difficult to argue that this is a bad thing — educating one's own citizens is a key element of sustaining national advantage.

Having foreign students is, in fact, useful for host countries. Neoliberal thinking is correct in promoting the value of intellectual exchange. Knowledge and culture are transferable, and overseas students can provide significant benefits to the host country whether they migrate permanently or simply return home with a deep understanding of the host nation and its culture. Altbach and Knight (2011) note that knowledge and language acquisition, and the structural changes that higher education undergoes through the internationalization of curriculum, are generally positive developments. Alderman (2010) similarly advocates for the removal of barriers to international students for analogous reasons.

Furthermore, taxpayers are not merely an oblique stakeholder with some ill-defined national interest; they are directly financing public universities. The neoliberal model may wish to see such taxpayer support discontinued, but until that happens, taxpayers remain stakeholders, and they want to see that the playing field is level. Nobody wants to believe that their child is disadvantaged simply for being a local resident, but that perception is growing — or this would not be a matter of public debate. Politicians in particular have an incentive to ensure that taxpayers are satisfied with state-funded education systems, since politicians are answerable to the electorate. This reality creates strong incentive to ensure there are sufficient spaces for domestic students.

That said, the objectives of having foreign students participate in Western academic life and ensuring that the nation's needs are met are not incompatible. It is perfectly reasonable to pursue increasing numbers of foreign students without compromising access for domestic students, or even without compromising the quality of education on offer. Infrastructure will surely need to expand, and this expansion implies investment. It is not sufficient to expect a university to finance such expansion entirely through added fees, unless institutions have the ability to access capital markets themselves. Governments essentially create the situation whereby they are unwilling to finance expansion yet wish for schools to be financially sustainable and to admit a certain percentage of domestic students. In other words, there will always be some sort of trade-off. Government, by virtue of its financial position, sets the framework within which that trade-off occurs. For education administrators, this implies not only the need to strike a delicate balancing act but also to play a greater political role — stemming the tide of education funding cuts that necessitate such trade-offs. Access to long-term financing, for example, would allow universities to build out infrastructure in a manner that can be repaid over several years; but if institutions are forced to operate on a year-to-year cash basis, they face a much more difficult task in juggling the needs of different stakeholders.

Conclusion

Globalized marketplace or not, it is essential that state-funded higher education institutions ensure that the needs of domestic students are met. These institutions have a duty of care to their stakeholders — including taxpayers — and to the broader national interest. Our universities are a source of competitive advantage, and to deny domestic students the opportunity to receive higher education is not only harmful to the nation but also a betrayal of the duty of care owed to taxpayers.

There is no mutual exclusivity between this position and actively seeking foreign students. Foreign students are valued by schools for the tuition revenue they generate, but also for their contributions to the campus community and to knowledge and cultural exchange. Foreign students are therefore genuinely beneficial to the campus environment and should be encouraged. That some schools have allowed a perception of unfairness to emerge probably reflects the pendulum swinging too far; however, all it will take to alleviate the issue is a rebalancing of priorities. Ultimately, this is a matter of supply constraints, and greater funding for public higher education will go a long way toward alleviating those constraints and restoring equilibrium to the globalized market for higher education.

References

Al-Rodhan, N. (2006). Definitions of globalization. Geneva Centre for Security Policy.

Grootaert, C. (1994). Education, poverty and structural change in Africa: Lessons from Côte d'Ivoire. International Journal of Educational Development, 14(2), 131–142.

Kwiek, M. (2001). Globalization and higher education. Higher Education in Europe, 16(1), 27–38.

Vaira, M. (2004). Globalization and higher education organizational change: A framework for analysis. Higher Education, 48, 483–510.

Besser, L., Cronau, P., & Cohen, H. (2015). Universities embroiled in foreign student feeding frenzy driven by corrupt middlemen. ABC News.

Bradshaw, J. (2014). As Ottawa pushes for foreign students, universities worry about spaces for Canadians. Globe and Mail.

Alderman, G. (2010). The globalization of higher education: Some observations regarding the free market and the national interest. Higher Education in Europe, 26(1), 47–52.

Altbach, P., & Knight, P. (2011). The internationalization of higher education: Motivations and realities. Journal of Studies in International Education, 11(3/4), 290–305.

Odin, J., & Manicas, P. (2004). Globalization and higher education. University of Hawaii Press.