US President Donald Trump’s move to curb entry of foreign students in the US has been criticised by Raghuram Rajan. The former RBI governor has warned that if the pipeline of international students into America is hit, it will have long-term consequences for the US economy.Statistics show that international students constitute 5.9% of nearly 19 million students in US higher education. During the 2023-2024 academic year, the US welcomed over 1.1 million international students, with India leading in numbers, followed by China.Speaking to Bloomberg TV, Rajan emphasised that the influx of overseas students has traditionally been vital for America’s economic dominance and innovative capabilities, but present-day policies threaten to diminish this strategic advantage.Raghuram Rajan explains importance of foreign students in US“The Sergey Brins of the world came as students and did wonders for the US economy,” Rajan said, referencing Google’s co-founder. “To some extent, the problem is the universities haven’t made the case that they are so central to US growth, but also central to the distribution of that growth.”Also Read | Remittances tax: How Donald Trump’s ‘The One Big Beautiful Bill’ may turn out to be ugly for Indians in the USCurrently serving as a professor of finance at the University of Chicago Booth School of Business, Rajan highlighted that restricting foreign student enrolment could affect employment growth, citing how organisations such as Alphabet Inc.’s Google have created thousands of jobs, partially due to their access to immigrant talent.What’s the curb on foreign students?What began as scrutiny of prestigious institutions like Harvard University and Columbia University regarding antisemitism has evolved into a broader challenge to US higher education’s foundation. The Trump administration intensified this situation on Tuesday by directing US embassies globally to halt student visa interview scheduling whilst considering more rigorous social media screening of applicants.Secretary of State Marco Rubio has instructed all American embassies globally to cease scheduling student visa interviews whilst the administration evaluates enhanced scrutiny of applicants’ social media accounts.In a diplomatic cable sent to embassy staff worldwide, this latest measure represents another step in the US government’s efforts to limit international student access to American educational institutions, citing concerns about national security and antisemitic behaviour.Also Read | ‘Will not discuss…’: US tells WTO that India has no basis to impose retaliatory duties on 29 American productsThe cable stated: “Effective immediately, in preparation for an expansion of required social media screening and vetting, consular sections should not add any additional student or exchange visitor (F, M and J) visa appointment capacity until further guidance is issued.”Rajan expressed his unease about the current situation, noting the growing anxiety amongst academic staff and leadership regarding visa stability and potential governmental repercussions. “It is not a great environment,” he said. “It’s an environment which is inhibiting the ultimate production that the universities contribute to the US economy.”Rajan also highlighted how international students’ current decision-making process resembles business investment behaviour during uncertain periods. “If uncertainty increases, you tend to either postpone the investment or take it to a place where things are more certain,” he said.
