The University of Illinois’ flagship campus is protecting itself financially in case it sees a steep decline in students from China, the country that sends the greatest number of foreign students to Urbana-Champaign.
The university has insured its business and engineering schools against a possible sudden drop in tuition revenue from Chinese students. Eight hundred students in the Geis School of Business are from China, about 12 percent of the business school this year. Overall, 11 percent of UIUC’s total student body is from China.
School leaders say they believe the university is the first in the world to do this.
“[Chinese students] have always been a very important part of the composition of this campus in terms of faculty and Ph.D. and master’s programs,” said Jeff Brown, dean of UIUC’s Geis College of Business.
Brown said the number of undergraduate students coming from China has increased over the past two decades.
Brown came up with the idea of insuring the university in 2015 when he became dean of the business school and realized the potential risk. The insurance policy went in effect July 1, 2017.
The insurance covers losses if the school sees a 20 percent drop in revenue in an unforeseen event like visa restrictions issued by the U.S. or Chinese governments, or a health crisis that prevents students from entering the country. The policy costs UIUC $424,000 and will cover tuition losses up to $60 million.
Since UIUC took out the insurance, relations between the U.S. and Chinese have grown increasingly tense as President Donald Trump has implemented tariffs against China, launching a trade war. Meanwhile, his administration has placed international student visa applications under greater scrutiny, making it harder for international students to study in the U.S.
“I wasn’t trying to read political tea leaves, I was simply engaging in good risk management,” Brown said this week. “Now, given that tensions between the two countries have risen, it reinforces, I think, the wisdom of having done this.”
In October, The Financial Times reported the Trump administration was considering a total ban of student visas for Chinese nationals.
Brown said other universities have reached out to learn more about U of I’s policy.
“There are a lot of universities that are in a similar situation,“ he said. “And probably wish they had done something similar a couple years ago as we face these increased political tensions between our two countries.”