Trump's Foreign Student Policies Threaten $7B in University Cash Flows

The immediate fallout from these policy shifts is already visible in enrollment pipelines. The Trump administration's visa interview suspension from May 27–June 18, 2025, combined with intensified social media vetting, has triggered a 30–40% plunge in new international student applications for Fall 2025-a trend that would translate to a 15% overall enrollment drop if unaddressed, wiping out $7 billion in university revenue and 60,000 jobs, according to a NAFSA and JB International report. The most acute strain surfaces in India, where F-1 visa issuances collapsed 70% year-over-year in May, reflecting both operational bottlenecks-limited interview slots in Delhi and Mumbai-and heightened scrutiny of digital footprints, as noted in the NAFSA report.

A June 2025 executive order barring entry from 19 countries, as reported by Forbes, compounds these headwinds, with 36 additional nations reportedly in the crosshairs and $3 billion in annual student spending at risk. The State Department's data shows F-1 visas fell 22% in May 2025 versus 2024, with appointment backlogs in top sending regions like Nigeria and China further constraining capacity, as noted in the NAFSA report. While some officials anticipate a July-August rebound as pent-up demand surfaces, the operational reality is dire: universities face immediate budget shortfalls, with canceled housing contracts and lab access creating cascading cash flow strains, as reported by Forbes. The asymmetry here is stark-the downside risks to institutional stability outweigh any potential upside from a partial recovery.

The immediate fallout from shrinking international enrollment is crystallizing into concrete cash flow damage. DePaul University's $15 million cuts-including hiring freezes and pay reductions-directly stem from a 30% plunge in international students this fall, a clear signal of operational fragility cascading through the system, as reported by Reuters. Nationally, the decline accelerated sharply: September 2025 data shows 942,131 international students, a 2.4% drop from the prior year, with May 2025 F-1 visa issuances falling 22% YoY, as noted in the NAFSA report. These reductions aren't abstract-they directly attack revenue streams critical for balancing budgets. Schools like Johns Hopkins, Northwestern, and USC have already acted, implementing layoffs and slashing research funding as cash reserves evaporate, as reported by Reuters. Moody's warnings now feel less speculative: institutions with heavy reliance on international graduate tuition-often contributing 15–30% of revenue-face severe credit risks as they grapple with fixed costs versus collapsing inflows, as noted in the NAFSA report. The projected $7 billion national revenue loss for 2025-2026, per NAFSA and JB International, could indeed translate into 60,000 job cuts across campuses and their local economies, breaching cash covenants and forcing emergency measures.

This isn't uniform across higher education. Schools with less than 15% international student reliance-often regional public universities and smaller liberal arts colleges-aren't facing the same existential cash crunch. Their revenue models absorb the dip without triggering immediate austerity or covenant violations, creating a stark divide between those insulated and those hemorrhaging liquidity.

The most severe strain point emerges for institutions where international dependence exceeds 20% of total revenue-a segment now facing existential pressure. Moody's Investor Service has explicitly warned that sustained enrollment declines could trigger credit rating downgrades for these schools, creating a self-reinforcing cycle, as noted in the NAFSA report. The $7 billion revenue shortfall projected by NAFSA and JB International represents precisely 5% of total annual revenue across U.S. universities, but for heavily exposed institutions, this translates into potentially catastrophic liquidity gaps. DePaul University's documented 30% plunge in international enrollment has already forced hiring freezes and pay cuts, illustrating how quickly balance sheet impacts become operational reality, as reported by Reuters. This isn't merely revenue loss; it's a pressure point on compliance infrastructure. The State Department's 22% year-over-year drop in F-1 visas issued by May 2025, as noted in the NAFSA report, combined with appointment shortages in key markets, forces schools into costly last-minute visa rejections and compliance failures that undermine SEVP certification, as reported by Forbes. The risk compounds when considering that 19 countries face entry restrictions-with 36 more rumored-threatening $3 billion in annual contributions directly, as noted in the NAFSA report. Without recovery in July-August 2025, the scenario includes 150,000 fewer arrivals, further eroding tuition flows and destabilizing budget models reliant on international pipelines, as noted in the NAFSA report. While policy reversal before August could preserve revenue, current trajectories show institutions lacking diversified enrollment strategies facing acute solvency threats as cash reserves deplete against fixed operational costs.

Risk Mitigation: Protecting Cash Reserves
Universities facing plummeting international enrollment must prioritize liquidity preservation now. The 30-40% drop in new international enrollments for Fall 2025, as noted in the NAFSA report-coupled with a 22% year-over-year decline in F-1 visas issued in May 2025, as noted in the NAFSA report-has already triggered spending cuts at institutions like DePaul University, which slashed budgets after a 30% enrollment drop, as reported by Reuters. Waiting for recovery signals in September could prove perilous; the risk of prolonged visa bottlenecks and policy shifts (including a June 2025 executive order restricting 19 countries), as reported by Forbes, remains acute.

First, institutions should stockpile cash reserves to cover 12+ months of fixed costs, not just operational expenses. Schools reliant on international graduate programs face severe revenue shocks, as Moody's warns of "credit risks" for those without liquidity buffers, as noted in the Reuters report. This requires immediate auditing of cash flow projections using SEVIS data to model worst-case enrollment scenarios-particularly for programs dependent on students from India and China, where visa rejections surged 70% for Indian applicants, as noted in the NAFSA report.

Second, visa process compliance must be audited to halve rejection rates. The May 27–June 18 visa interview suspension and appointment shortages in key sending countries, as noted in the NAFSA report, exposed vulnerabilities in application support systems. Institutions should partner with legal teams to verify documentation accuracy and provide real-time guidance, reducing avoidable rejections that compound enrollment shortfalls.

Third, diversify revenue by expanding domestic tuition waivers. With international contributions accounting for up to 10% of institutional budgets, as noted in the NAFSA report, redirecting resources to recruit high-achieving domestic students can offset losses. Johns Hopkins and Northwestern have already reduced research funding to preserve core operations, as reported by Reuters; similar shifts require reallocating administrative costs toward financial aid for U.S. students.

Critics argue that September's enrollment rebound could render these measures excessive. Yet the 150,000-student shortfall projected without July-August recovery, as noted in the NAFSA report, underscores the danger of complacency. Proactive cash preservation and compliance upgrades remain essential to weather uncertainty-and avoid the layoffs and program cuts already seen at five major universities.