International students have become less likely to pursue education in the U.S. since President Donald Trump’s return to office. The administration has introduced more restrictive anti-immigration policies, including measures that explicitly target foreign-born students, and tightened rules about post-schooling employment for international graduates. 

Last fall, schools reported international student enrollment had dipped 17%, according to NAFSA, an education nonprofit. Declining tuition spending translated to $1.1 billion in lost revenue for universities, and almost 23,000 fewer jobs.

Those figures might just be a drop in the bucket if international students end up permanently absconding from U.S. schools. International enrollees disproportionately pursue technical degrees, including in scientific, technology, engineering, and mathematics domains, otherwise known as STEM. The skills and the professions these lead to are cornerstones to U.S. innovation and technological breakthroughs, which in turn bolster all sorts of businesses and jobs. By cutting off those foreign-born grad students and PhDs at the source, the U.S. risks gutting its own economy years down the line.

That’s the finding of a paper published Tuesday by researchers at the Peterson Institute for International Economics. If the number of transplant STEM graduates trained in the U.S. were to fall by a third over the next decade, the blow to entrepreneurship, productivity, and business dynamism would claw anywhere between $240 billion and $481 billion from the country’s GDP, the paper found.

“A major and enduring economic advantage of the United States has been its ability to recruit and educate top talent from around the world,” the authors wrote. “In practice, recruitment of high-skill STEM talent into the United States happens primarily at U.S. universities.”

The international STEM pipeline

When Trump returned to office, the administration was riding high on voter approval for its planned immigration policies. In January 2025, the president polled particularly well with his promise to clamp down on undocumented immigration. A Gallup poll at the time found Americans had more faith in Trump to deliver on his immigration platform than on any other issue he had campaigned on. 

But in the 18 months since, Trump’s sweeping immigration crackdown has included a constriction of legal immigration pathways, too. The administration has enacted travel bans affecting dozens of countries, tightened refugee admission requirements, and rehauled the process by which many highly skilled foreign students can come to the U.S. for school, and eventually work. 

Last year, the administration ordered changes to the H-1B visa program, which allows companies to hire highly skilled and specialized workers. The overhaul required employers to shell out $100,000 for each application, up from around $5,000 previously. A federal judge struck down the order earlier this month, a decision the administration said it would appeal.

The White House did not immediately respond to Fortune’s request for comment.

Changes to H-1B requirements are keenly felt in America’s most innovative industries. Companies have relied on the program to hire armies of foreign-born engineers, AI researchers, and healthcare practitioners, many of whom were studying in the U.S. prior to finding work. Of the 1.2 million international students who attended U.S. schools last year, 57% were enrolled in a STEM program, according to a survey by the Institute of International Education. 

Vanishing opportunities for skilled workers

The concentration of international students in STEM fields rises in tandem with their expertise. The Peterson Institute study found international arrivals make up 42.1% of STEM workers whose highest degree is a master’s, a share that rises to 49.2% for those with PhD qualifications. Between 2000 and 2023, foreign-born professionals accounted for more than 60% of all new STEM workers with a PhD.

The complication for U.S. companies, the authors wrote, is that even before Trump, the country offered relatively few avenues for firms to hire directly from abroad. Programs like H-1B, and even green card issuance, are largely contingent on recipients having already lived in the U.S. for a number of years. 

That has made recruiting directly from graduate and doctorate programs one of the most reliable talent pipelines for employers to turn to, a strategy that has been successful overall. While the number of foreign-born STEM workers who stay in the U.S. declines the further they are removed from graduation, the researchers found nearly 40% of highly skilled professionals end up staying in the U.S. more than eight years after completing their degree.

Those who do stay end up being some of the country’s most dynamic innovators. Immigrants have founded or cofounded 59% of the country’s billion-dollar startups, according to a report published this month by the National Foundation for American Policy. Research from Stanford economists in 2023 also found immigrants are responsible for 23% of patents issued over the past few decades, in part because of how frequently U.S.-born innovators end up citing foreign-born research and inventions.

The Peterson researchers projected the economic cost associated with losing foreign-born students at the same rate they have dropped off over the past year, although that could be an underestimate. The drop in visa issuances in the last academic year may have been as high as 36%, according to an analysis of State Department data by the Chronicle of Higher Education. The decline in enrollment is expected to compound by a further 1% every year between now and 2030, according to another recent report by QS, a higher education analytics firm.

The U.S.’s loss might end up being its rivals’ gain. While American colleges and universities face consistent budget shortfalls and enrollment cliffs, 82% of schools in Asia and 47% in Europe saw undergraduate enrollment rise last year, compared to just 18% in the U.S., according to the recent NAFSA report. Universities in Hong Kong and Japan openly courted international Harvard attendees last year who were caught up in the institution’s clash with the Trump administration about the school’s policies.

“These high-skill STEM workers lost to the United States won’t disappear,” the Peterson researchers wrote. “They will supply their talents instead to competitor countries.”