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The Trump Travel Ban Could Hit U.S. Colleges’ Bottom Line

Korbin Yang at Penn State University, January 2017.Korbin Yang at Penn State University, January 2017.
The steady growth in the number of international students in the U.S. could be in jeopardy.Mark Peterson—Redux Pictures

In the heated, high-stakes global war for talent, January 27 may go down as the day America shot itself in the foot.

That’s when, late on a Friday afternoon, President Donald Trump casually dropped his executive order, effectively barring the citizens of seven countries from entering the U.S. for 90 days. Courts quickly blocked the ban, and a subsequent presidential order, issued earlier this month, is less sweeping. But the logistical chaos and angry debate that ensued have created unease worldwide. And perhaps nowhere is it felt more intensely than in America’s universities, which collectively host more than a million foreign students—some 17,000 from the seven affected countries.

While Trump’s travel ban is limited and temporary—and the fate of the order remains unclear—many fear the impact on American higher education, arguably the US’s most prestigious export, will be lasting and severe.

America’s universities have long been bastions of globalism. Diversity is celebrated as a means to foster robust academic debate, prepare students for a global economy, and spread American values throughout the world. In an effort to draw the best and brightest, U.S. institutions have raced to send students abroad and open up global outposts as ideologically and geographically far-flung as Beijing (Columbia) and Abu Dhabi (NYU). They’ve also rapidly increased international enrollment; the number of foreign students attending US institutions has swelled 73% over the past decade.

The benefits are not strictly philosophical. Foreign students typically pay full freight at American colleges, subsidizing their US counterparts who receive financial aid or tuition discounts. (While 5% of U.S. university-goers are from overseas, the group accounts for 8-10% of the system’s revenues.)

Nicolas Rapp
Nicolas Rapp

In November, less than a week after the election, Moody’s Investor Service sounded the alarm on that trend when it declared America’s rapidly growing population of international students “a potentially volatile revenue stream.” Universities, it warned, were increasingly exposed to changes in government policy. And relevant policy, it noted, could change under Trump.

College officials acknowledge foreign students are a piece of the financial equation, but they’re reluctant to speak of their value—or the implication of Trump’s actions—in such terms. The Association of International Educators, or NAFSA, says the nation’s million-plus international students add $32.7 billion and 400,000 some jobs to the US annually.

It’s too early to tell whether an America-first administration will steer wary international students to competing countries. (The UK, another top destination, has its own self-inflicted wounds post-Brexit.) But there’s plenty of anecdotal evidence that Canada, which made attracting international students part of its national economic strategy in 2014, is likely to gain.

The country’s universities have been flooded with inquiries since the U.S. election, from American and international students alike, says Paul Davidson, President of Universities Canada, the nation’s leading higher education association.

For more on the travel ban, watch this Fortune video:

Canada, which in the wake of the travel ban has both offered neighborly assistance—affected students are welcome to relocate there and continue their studies with U.S. institutions via Skype—and stepped up its game—extending deadlines, waiving application fees, and in some cases offering tuition breaks to certain foreign students—has plenty of capacity to welcome everyone, Davidson says.

A version of this article appears in the March 15, 2017 issue of Fortune.