An important lesson from the Pacific Rim economic crisis

For investors throughout the world, the economic stresses now gripping the nations of the Pacific Rim pose a complex mixture of threats and opportunities. For American universities, however, they have posed a more immediate challenge.

As the value of the dollar has soared against the value of their “home currencies,” students from Korea, Japan, Malaysia, Indonesia, Thailand, Singapore, Taiwan and the Philippines have found it increasingly difficult to meet their tuition payments and living costs. Their host universities in this country have made a variety of adjustments to enable them to continue their education without interruption. George Washington University, for example, has extended the deadline for spring semester tuition payments for affected students until August 1 of this year, while dropping the customary late fee. Special arrangements for these students will also facilitate their enrollment in summer session and fall semester courses.

For the many schools of higher education now making similar arrangements, humanitarian considerations have been primary. So many students are involved that a harder approach would inflict untold amounts of hardship and career damage. But precisely because they have attracted such high and steady levels of enrollment from Pacific Rim nations, our universities must also take account of the threat to their internal budgets.

Like other international students, those from the Pacific Rim generally pay the full amount of their tuition and their living costs. Their departure for home or for schools elsewhere would leave a definite budgetary shortfall behind. Arrangements that keep them here while the economies of their countries stabilize are therefore in the interest of their American universities as well as themselves and their families.

From this difficult experience, several realizations have either emerged or been reconfirmed:

1.) American higher education is now an export industry as well as a domestic service. Though they have often drawn criticism from American commentators, our schools of higher education are recognized abroad as the very best in today’s world, offering not only the finest teachers and researchers, but the most “user-friendly” classrooms, laboratories and libraries, and the kinds of administrators for whom a content student is a cause of pride.

In graduate and professional programs especially, the percentage of foreign students may range anywhere from 20 to 60 percent, most of them people who will return to their homelands in order to practice what they have learned here, all of them people who will also serve as “unofficial ambassadors” for the United States.

2.) The presence of these students from abroad creates a “campus culture” that benefits American students, too. Whether they are enrolled in schools of business, medicine, law, education, journalism or the liberal arts, most American students know that their lives will be profoundly affected by international considerations. Some will serve their American employers through residence in Bangkok or Moscow or Buenos Aires. Others will seek ways of applying state-of-the-art medical techniques in desert or rain forest settings. Still others will function abroad as reporters for the American media or as museum personnel serving the cause of cultural conservation. All can expect to spend considerable time in conversation, via e-mail or modem, with their foreign counterparts.

For American students to be educated on a campus with a substantial international population, therefore, is for them to encounter, in a highly functional way, a microcosm of the planet on which we are living today. All the more reason, therefore, for their universities to seek to stabilize foreign enrollment, especially when faced with economic crises as extensive as those now affecting the Pacific Rim.

3.) In a way that seldom has been acknowledged by government or the media, American higher education now functions in tandem with American foreign policy. Studying in the United States is important for students from abroad. They, in turn, have become very important for the budgets of the American universities they attend. And a corollary of this state of affairs is that all of them are citizens of countries with whom the United States has diplomatic and often very cordial relations.

America spends enormous amounts of money it order to make itself and its culture more familiar to other nations. But the services provided by the United States Information Agency and by all of our foreign embassies are being supported and extended through our schools of higher education, which typically produce foreign graduates who are fluent in English and deeply acquainted with American practices, customs, and culture. Some of these foreign graduates will move on to become leaders within their own countries. Many will encourage family members and friends to accelerate their own dealings with the United States.

In short, America’s national interests in the 21st century will be well served if we do whatever we can to see to it that students from the Pacific Rim – as well as Eurasia, Western Europe, Latin America, Africa and the Middle East – continue to regard American universities as a highly desirable academic destination.

Our federal government would be well advised, therefore, if it launched a series of programs, ranging from loan guarantees to scholarships, that helped our universities maintain the flow of foreign students that those universities have successfully pioneered. Given the multitude of “winners” that this flow produces, such programs would be highly cost-effective. What’s “good for Korea,” in this case, is also good for the United States and for American universities, as well as the many American businesses that service the needs of students on American campuses and their visiting families.

In ways that are both unfortunate and inaccurate, we have grown used to thinking of our universities as barely connected with our national economy and with American foreign policy. One of the incidental lessons of the Pacific Rim economic crisis, therefore, is that American higher education has become very closely integrated with the cause of American national security. Nations that have benefited from American educational services provided to their citizens have yet another good reason for reacting favorably when the United States is in need of support, in the Persian Gulf or elsewhere. Meanwhile, the cost to the American taxpayer – the cost, especially, of loan guarantees – would be minimal.

Whether the cause of the foreign student is advanced by the U.S. Congress, by the International Monetary Fund or by the World Bank, it is a cause in the American national interest. Let us move it forward, therefore, as a good idea that is also moral, one that will serve our position in the world while also giving us reason for pride. -The writer is president and professor of public administration of George Washington University.

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