An increasing number of US universities are looking to buy insurance policies against a drop in revenue from international students, fearing they are overexposed to China at a time of mounting trade tensions between Washington and Beijing.
A 10 per cent decline in new international student enrolments at US universities — which rely heavily on revenue from Chinese and Indian students — over the past two academic years has already cost the US economy $5.5bn, according to a report from Nafsa, previously known as the National Association of Foreign Student Advisers.
Two colleges at the University of Illinois at Urbana-Champaign — the Gies College of Business and the College of Engineering — bought insurance in 2018 worth $60m from USI Insurance Services in Champaign, Illinois. The policy pays off if both the colleges suffer an 18.5 per cent decline in revenue from Chinese students year over year due to a government action such as visa restrictions or a “health event”.
The correct inference, I think, is that some of these colleges already have spent that supposedly forthcoming tuition money.
Here is more from Priyanka Vora at the FT.