New Foreign PhDs Much Less in Debt than New U.S. Citizen PhDs

By David North, January 9, 2011

Many systems in America tilt in favor of its citizens, such as voting or obtaining government jobs, but at least one does not.

That's the system that funds PhD-level educations.

New foreign PhDs, or more precisely, those with temporary visas, have considerably less educational debt on graduation than new PhDs who are U.S. citizens or green card holders.

This is one of the findings of the recently-released annual report: Doctorate Recipients from U.S. Universities: 2009. This highly regarded annual survey of those with new doctorates is published by the National Science Foundation, and is funded by a collection of six federal agencies.

One of the battery of questions asked of the new PhDs is: how much education-related debt do you have?

Fully 72.5 percent of those with temporary visas said they had no debt. The percentage of the citizens and green cards in this category was 42.1 percent of the 2009 cohort.

In another measure of the extent of debt, the study showed the median individual debt for both groups. It was a modest $8,095 for those with temporary visas, and $23,530 for the citizens and the green cards, generally. American Hispanics reported medians of $29,471 and Blacks, $41,018. For more data on the subject see Table 36 of the most recent report.

There are several reasons for the low debt levels of the foreign PhDs. For example, while U.S. citizen PhD students can obtain loans, that is often impossible for foreign ones, and the universities adjust their financial aid policies accordingly. Further, when I interviewed close to 100 PhD candidates in science and engineering on temporary visas for the Sloan Foundation a few years ago, I quickly sensed that their parents had less in the way of earthly goods than the parents of their American peers.

A majority of the parents of the candidates with temporary visas, for instance, did not own automobiles. In one extreme case, the parent was a Chinese peasant, and his engineer son and I spent a few minutes calculating the size of his rice paddy. We figured it not only was not as big as a football field, rather it was the size of that part of it called the "red zone," which lies between the 20 yard line and the goal line.

Fundamentally, American universities are dependent on overseas grad students to do much of the grunt work of their funded research, and see to it that these students have adequate funds.

U.S. citizens graduating from law and medical schools tend to have much more substantial debts when they graduate than citizen PhDs do, because they are going into much better-paid lines of work, and financial assistance is less common in these institutions than in the grad schools.

Most of the new PhDs with temporary visas have degrees in the hard sciences and engineering, many move on to jobs with the H-1B program, and many of these, in turn, secure green cards through the labor certification process.

In fact, for many in this group, that was the plan all along.

American educational systems, financial aid programs, and the U.S. immigration law all facilitate that outcome.