With all the talk in Canada about the federal government potentially capping international student study permits, I got to thinking - what would this mean for an institution? If I were a Provost, I'd be asking my Institutional Research team to game out what these scenarios might look like compared to our current plans.

Here's what we were expecting at Plaid University:

• Our Senate approved Plan A. This would see Domestic enrollment stay relatively constant over the next 5 years. But International enrollment would grow about 5% per year (or nearly 30% between 2023 and 2027).

In this post, I looked at 2 scenarios:

• Plan A – Growth Intakes: domestic intakes growing 2% per year, international intakes growing 10% per year
• Plan B – Steady State: Set intakes equal to 2023 levels and hold them there for 5 years.

Note that in our case, Plaid University has been growing immensely for years. Even putting the brakes on now means we will see growth for several years (in effect, we have more students coming into the institution than graduating, and it will take ~4 years to catch up).

Results

Change in Enrollments

Our international enrollments dropped by an average of 469 FTES by 2027.

Change in Tuition

For this example, we used the average international tuition rate charged in Canada at universities in 2022-2023: $36,123. Those rates, on average, increased by between 4% and 8% each year between 2018-2019 and 2022-2023. This results in a compounding average of about 6%, so we’ll use that as our average annual increase in future years. This means our tuition rate will grow from $36,123 in 2022-2023 to $45,575 five years later.

Domestic average tuition, in current dollars, is actually practically the same as it was in 2018, so we’ll just carry the 2022-2023 average through to all future years.

The chart below compares our two scenarios. The blue line is our high growth scenario – where international intakes grow 10% per year (domestic grows 2% per year but is not shown). The orange line is our steady intakes scenario – with international enrollment set to 2023 levels.

What you can see is that in the early years, the difference is relatively small: $3m or so. Not pocket change, but a fluctuation many institutions have allowed contingencies for. However, as we get further into the future, our slower growth makes a much larger impact :$21m lower in 2027 than we expected, for a cumulative difference of $44m over the 5 years. This amount of money will cause major challenges at the institution – it’s likely we’ll have to consider program closures and layoffs.

We can break this down further by program if we choose.

Here we show our largest baccalaureate programs.

Our BA program will lose $9m versus plan, and our BSC will lose $10m versus plan. Even assuming the tuition allocation model only grants the faculties 50% and central keeps the rest, this is a ~$5m hit to the bottom line in the areas that conduct the research and teach the students, supporting the primary mission of the institution. (ps – can you guess what happened in our scenario for BSCHS – Bachelor of Science Health Sciences? Let me know in the comments)

Conclusion

Capping international enrollments could be a significant challenge for Canadian institutions. I think this is why you’ve seen CICAN and Universities Canada both issue statements about this.

Now, we don’t know for sure which way the political winds are going to blow on this. It is entirely possible that the Minister who suggested capping international enrollments was speaking out of turn and that nothing will come of this. Or perhaps something will, and the devil will be in the details.

• For me, if there is a cap, I’d end with the following questions:
• How will a reasonable cap be decided? Will this involve any consultation with institutions or students?
• Who will enforce the cap?
• Is the cap most likely to be based on institutional patterns – ie hold at 2023 levels, or will this be decided federally and the chips fall where they may?
• Is there a plan to backstop any of the funding shortfall, or do we expect program closures and layoffs to result.

What are your thoughts on a potential cap? Is this helpful for your institution? Do you think it will help the housing market attain a degree of affordability?