Changes to immigration policy – namely the administration’s final rule ending duration of status – could decrease international enrolments and “increase revenue risks” for some institutions, Fitch said in a statement last week.
It warned of weakened operating performance and less financial flexibility for colleges and universities that rely on international students, who typically pay more tuition and receive less institutional aid than domestic students.
This “outsized revenue effect” can be hard to replace quickly when lost, cautioned the agency, noting that domestic recruitment cycles and demographic pressures would limit backfilling.
The long-anticipated change was announced last month and will take effect on 15 September 2026, setting fixed time limits on student and exchange visitor visas – who must file for an extension of stay with the government if their studies take longer than four years.
But the financial effects will not be felt evenly, with Fitch expecting the sector-wide credit impact to “remain limited”, noting that institutions with diversified revenue sources, broad demand and sufficient financial resilience would be able to absorb “moderate enrolment volatility”.
At the same time, it said even modest revenue declines can weaken college margins, warning institutions with international student populations above 10% and those with large graduate and STEM programs where degree completion often exceeds four years would be hardest hit.
If you were a student, would you come to the US under these terms and conditions?
Travis Ulrich, Terra Dotta
“Overall, credit pressure would be greatest for institutions that already have weaker demand profiles, limited financial flexibility, heavy reliance on student fees, and a high dependence on international tuition revenue.”
Elsewhere, experts have said the rule is unlikely to push a healthy institution into deficit, but that mergers and program closures are likely, particularly among small private schools with high international enrolment and regional public universities with large international master’s cohorts.
The statement joins a chorus of sector warnings over the financial repercussions of ending duration of status, with the government’s own analysis estimating the rule to cost at least $440 million annually, totalling $3.2bn over the next decade.
Crucially, however, the department conceded its own cost estimates do not include lost tuition revenue due to declining international enrolments – something stakeholders say will make the financial losses far greater.
This week, NAFSA and JB International estimated a 9.5% fall in total international students this fall would deprive the US economy of at least $3.4bn in direct economic contributions just this year.
“Another huge issue is that the new rule contradicts how American higher education actually works,” said Terra Dotta SVP enterprise solutions Travis Ulrich.
“Half of bachelor’s students take longer than four years, the median PhD takes six years, and medical residents keeping rural hospitals staffed can’t finish in four years at all,” he continued.
While colleges have traditionally decided what constitutes normal academic progress, the new regulation hands decision-making to an agency “already sitting on 11m cases, absorbing 400,000 new filings a year,” said Ulrich.
“International offices are looking at 163% volume increase with the same number of people on staff,” he said, with DHS estimating international offices will spend roughly 135 hours adjusting to the increased workload, costing nearly $270m across the sector in the first year alone.
Meanwhile, NAFSA: Association of International Educators warned of the “tremendous” financial burden the new regulations place on students and exchange visitors, with visa extensions costing upwards of $1,000, plus nearly $500 or more in legal or third-party assistance for the nearly half of applicants DHS expects will need it.
“And none of it buys a guaranteed approval,” said Ulrich: “The rule never defines the approval standard, never promises a timeline, and offers no appeal.
“Canada, the UK, and Australia don’t make PhD students reapply to keep working on a dissertation… If you were a student, would you come to the US under these terms and conditions?” he asked.
While the rule won’t affect semester exchange students, Ulrich said study abroad could be the first segment to see a drastic decrease in students due to perceived travel barriers, America’s unwelcoming posture and bureaucratic friction.
Moreover, because bilateral exchange agreements run on balance, if institutions can’t fill inbound seats, outbound seats could also diminish for domestic students.
Though the new rule does not expressly prevent any students from coming to the US, the American Immigration Council has called it “the greatest change in the student visa process in 50 years”, creating huge uncertainty and compounding falling new international enrolments, which decreased 17% last year.
Given existing visa processing delays and policy uncertainty, coupled with the end of duration of status and continued uncertainty over OPT, nearly six in 10 colleges reported a fall in international applications for next year, though the true picture will become clearer when the academic year is underway.
