Recent changes to U.S. immigration policy governing F-1 student visas could decrease enrollment and increase revenue risks for some U.S. colleges and universities, particularly institutions with significant reliance on international students, Fitch Ratings says.
Sustained drops in new international student enrollment can have outsized revenue effects, as international students often pay full tuition or receive less institutional aid than students who are born in the United States. Colleges have fixed costs; therefore, even a modest decline in international enrollment can weaken margins and debt-service coverage for some institutions.
Before the recent rule change, international students on F-1 visas could generally stay in the U.S. for as long as they remained enrolled in school and followed the rules—a system known as "duration of status." Under the new rules scheduled to take effect in September, most new F-1 students will be admitted for a maximum of four years.
If they need more time to finish their degree, complete research, or participate in certain training programs, they must apply to the federal government for an extension rather than simply remaining enrolled. Other changes shorten the post-completion grace period for leaving the U.S. to 30 days and impose additional restrictions on academic program changes.
Fitch, a global credit rating agency that assesses the financial strength of colleges, universities, governments and corporations, said the changes to F-1 visa rules may contribute to sustained fluctuations in international enrollment that pressure institutions’ student tuition and fee revenue, potentially weakening operating performance and financial flexibility.
Universities with large graduate and STEM programs, where degree completion often exceeds four years, may incur higher costs to address overseas recruitment challenges, Fitch said. 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.
Institutions with sizable international student populations (10%-15% or more) are most at risk, but credit pressure would depend on an institution’s overall financial flexibility, Fitch said in its analysis released on Tuesday.
Colleges with lower credit ratings rely more heavily on student tuition and fees than those with higher credit ratings, Fitch said. Private higher education institutions with an ‘A’ and ‘BBB’ rating are the most dependent, with student tuition and fees accounting for 77.1% and 77.0% of adjusted operating revenue, respectively, in fiscal 2025. ‘AAA’ private institutions’ exposure is much lower at 26.2%, Fitch said.
However, although some individual institutions may be significantly affected, the sector-wide credit impact is expected to remain limited because higher rated institutions benefit from diversified revenue sources, broad enrollment demand, and sufficient financial resilience to absorb moderate enrollment volatility, Fitch said.
