Border Control Blues: How Visa Policies Are Tanking U.S. Education Stocks—and Where to Profit

The U.S. higher education sector is in a full-blown crisis—and it’s all because of red tape. New Homeland Security restrictions on international student visas are sending enrollment into freefall, crippling university endowments, and creating a golden opportunity to short overvalued education stocks while scooping up undervalued online learning platforms.

Let’s cut to the chase: if you’re invested in traditional universities or their affiliated ETFs, you’re sitting on a ticking time bomb. But if you’re quick enough to pivot, you can profit from this seismic shift in education’s future.

The Visa Vise: How 11% Fewer Students Spell Disaster
The numbers are stark. Since the April 2025 visa crackdowns, international student enrollment has plummeted 11.3%, with Indian students—the largest demographic—down a staggering 28%. Doctoral programs, the cash cows of top-tier universities, are also bleeding talent: Bangladesh, Iran, and Nigeria are down 21% each. Harvard, once the gold standard, now can’t even enroll new international students after its visa program was axed over “pro-terrorist” campus protests.

This isn’t just about lost tuition. Universities rely on international students to prop up real estate (think dorms), tech ventures, and endowments. When enrollment drops, so does everything tied to it.

The ETFs in Freefall—and Why to Short Them Now
The education ETFs are getting slammed, and there’s no rebound in sight. Take a look at these key players:

These ETFs are loaded with universities and for-profit schools whose revenue streams are drying up. SMOC, which holds stocks like Harvard’s endowment-linked real estate trusts, is down 18% this year. FLDM, with exposure to research-heavy institutions, is down 22%—and that’s before the Q2 enrollment data hits.

Why Shorting Makes Sense
The pain is just starting. Universities will slash budgets, freeze hiring, and offload real estate to stay afloat. Endowments, which fund everything from campus tech to faculty salaries, will shrink as donor confidence evaporates. This is a textbook short: the fundamentals are collapsing, and the ETFs are lagging behind broader markets.

The Flip Side: Buy the Online Learning Revolution
While traditional schools flounder, online platforms are the bright spot. Coursera (COUR) and Udemy (UDMY) are positioned to capitalize on students fleeing the U.S. for more visa-friendly nations—or opting for flexible, affordable digital education.

Why These Stocks Are a Buy
- Coursera (COUR): Despite dipping to $6.20 in April, COUR has clawed back to $8.60 as it adds enterprise clients and learners. Its Q1 2025 results showed 6% revenue growth and a narrowed net loss—proof the model works. With universities cutting budgets, companies will turn to Coursera for upskilling employees.
- Udemy (UDMY): While its Q1 2025 results were muted (8M new learners, 1,400 new enterprise accounts), UDMY’s focus on niche skills like AI and cybersecurity positions it to attract students displaced by visa policies.

The Action Plan
1. Short the ETFs: Sell SMOC, FLDM, and EDU. These are “widow-and-orphan stocks” now—safe in theory, but their days are numbered.
2. Go Long on COUR and UDMY: Both are trading at multiyear lows relative to growth. Set a target of $12 for COUR and $18 for UDMY by year-end.
3. Stay Alert for Catalysts: Watch for more visa crackdowns (DHS is targeting 43 countries next) and Q2 enrollment data—expect more declines.

Final Warning
Don’t mistake this for a temporary hiccup. The U.S. is losing its grip on the $43.8 billion international student market. Universities can’t compete with Canada’s clear pathways to residency or the U.K.’s aggressive recruitment. This isn’t a correction—it’s a revolution.

The time to act is now. Short the losers, buy the winners, and brace for the next wave of education’s great reshaping.

Cramer’s Bottom Line: The visa crisis is a once-in-a-generation opportunity. Sell the losers, buy the disruptors, and don’t look back.