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Indian Grad Students Eyeing U.S. as Land of Opportunity

NEW DELHI—The top two suppliers of foreign graduate students for U.S. universities are heading in opposite directions. Over the past 2 years, applications from India have skyrocketed, while those from China have tapered off—leaving analysts scrambling for answers.

According to a report released on 17 April by the Council of Graduate Schools (CGS), a nonprofit based in Washington, D.C., the number of applicants to U.S. graduate schools from India grew by 32% in the past year, following a 22% rise the previous year. The new report also documents a parallel decline in Chinese applications, which fell by 1% this past year and 3% the year before, according to 294 colleges and universities that responded to a CGS survey.

If current trends continue, India may soon surpass China in the number of graduate students it sends to the United States. In 2013 alone, the number of Indian students taking the Graduate Record Examination, widely used to evaluate applicants to U.S. institutions, rose by 70%, and India has already overtaken China in the number of test takers. And in a 2012 study, Rupa Chanda, an economics professor at the Indian Institute of Management Bangalore, found that the number of Indian students—both undergraduate and graduate students—going abroad grew by a whopping 256% between 2000 and 2009. “There’s rising demand for higher education, growing aspirations, and affluence which enable people to go abroad,”  Chanda says.

There’s no shortage of ideas over what may be driving the disparate trends. One factor could be a rebound after the U.S. economy slumped in 2008. When Chanda and her colleagues surveyed Indian students applying to foreign universities, they found that funding cuts and shrinking endowments at U.S. institutions were prompting Indian students to look elsewhere for opportunities. One major beneficiary of an influx of Indian graduate students then was the United Kingdom—until the U.K. government in 2011 tightened rules for student visas and the next year made it harder for students to work in the country after graduation. “It's just hard to believe this isn't having an impact,” says CGS President Debra Stewart. And, indeed, the number of Indian students in the United Kingdom has fallen dramatically of late.  U.K. immigration policy can’t entirely explain the trend, says Rahul Choudaha, chief knowledge officer at World Education Services, a New York City-based nonprofit. “A part of the U.K.-bound demand has come to the U.S., not all,” he says. “The U.K. market had always been in business- or management-related courses. The U.S. market is all STEM market. They’re not very parallel markets.”

Another factor is that in the past few years, top U.S. universities have stepped up efforts to recruit international students—especially those who can pay their own way, Choudaha says. “These self-funded students are exactly who that public university is looking for,” he says. The new CGS report found that the biggest spike (19%) in international applicants was to master’s-focused institutions where tuition is largely paid out of pocket.

That may be good news for U.S. institutions, but here in India, analysts are wringing their hands. “We are falling behind in adding capacity in higher education,” Chanda says. China and many other countries are investing heavily in higher education, she notes, and creating favorable environments for foreign universities to set up branch campuses. “So it’s no longer necessary [for students in these countries] to go abroad to get the kind of degree you’d get if you went abroad,” she says. This is happening to a far lesser extent in India. “We haven’t gone deep enough,” she says. “We’re missing the boat.”