Douglas Olsen
International students are defined as non-immigrant visitors who come to the United States temporarily to take classes or take online courses virtually from anywhere in the world. For an international student to be considered a state resident, they must have a status that permits them to remain indefinitely in the United States. State residency requirements vary from state to state, and colleges will usually have their own set of residency requirements. For instance, a dependent student must have at least one parent who is a state resident for at least one full year before the student matriculated in college. In addition, international students are not eligible for financial aid, and tuition for foreign students is roughly triple that of non-international students.
| Characteristics | Values |
|---|---|
| Number of international students in the US in 2023-24 | 1.1 million |
| Percentage of international students in the US in 2023-24 | 6% |
| States with the most international students in 2023-24 | California (12.5%), New York (12.1%), Texas (8%), Massachusetts (7.3%), and Illinois (5.5%) |
| States' authority to determine student residency | The state board of higher education or the college |
| Requirements for international students to be considered state residents | Status that permits them to remain indefinitely in the US |
| Requirements for in-state tuition rates | Varies by state, e.g., Arkansas (6 months), Alaska (24 months), Tennessee (no durational component) |
| Tax home for college students | The state where income is earned |
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What You'll Learn
International students' contribution to college town economies
International students studying in the United States contribute significantly to the country's economy, particularly to the local economies of college towns. During the 2023-2024 school year, the more than 1.1 million international students studying in the US contributed nearly $44 billion to the US economy, according to NAFSA, the Association of International Educators. This contribution varies across states, from $10 million in Alaska to over $6 billion in California.
International students bring a "high degree" of economic impact to their host communities, whether they attend small-town community colleges or universities in big cities. Their spending supports various sectors of the local economy, including education, real estate, restaurants, retail, and more. For example, the 82,000 international students in Massachusetts contributed an estimated $3.9 billion to the state's economy, while California, the state with the highest number of international students, received approximately $6.4 billion in contributions from nearly 141,000 international students.
The economic impact of international students extends beyond their direct spending. They also support job creation in the communities they live in. It is estimated that for every three international students enrolled in a US college or university, one new job is created. In California alone, international students supported more than 83,000 jobs during the 2023-2024 school year. Additionally, international students tend to pay higher tuition fees than their American counterparts, which provides a significant source of revenue for colleges and universities.
The presence of international students in college towns also fosters cultural exchange and diversity, enriching the social and academic fabric of these communities. They bring global perspectives into classrooms, helping prepare American undergraduates for global careers and often leading to long-term business relationships and economic benefits.
However, it is important to note that international students are generally not considered residents of the state in which they are studying for tax purposes. Their state of residence, or home state, is typically determined by factors such as where they have roots, where their driver's license was issued, and where they are registered to vote. To be considered a state resident for tuition purposes, international students must have a status that permits them to remain indefinitely in the United States.
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International students' eligibility for financial aid
International students are not eligible for federal student aid in the US, and they are typically required to use personal and other financial resources to cover their tuition and expenses. However, there are still some options available for financial aid at the institutional level, including grants and scholarships. For example, Howard University in Washington, D.C., offers merit-based aid to first-time-in-college international students through its Freshman Scholarships.
To be considered a state resident for tuition purposes, international students must have a status that permits them to remain indefinitely in the United States. Residency requirements vary from state to state, and each college or university has its own binding decision-making authority on the matter. Generally, a dependent student must have at least one parent who is a state resident for at least a year before the student matriculated in college. In Arkansas, for instance, the requirement is six months, while Alaska requires 24 months. Some states, like Tennessee, do not have a durational component to their residency requirements.
It is important to note that attending college in a state does not make an international student a resident of that state for tax purposes. Their home state is typically considered to be the state where their parents live, and they are usually claimed as dependents on their parents' tax returns.
International students can also consider taking out private loans, although financial aid experts advise against taking on too much debt. Instead, it may be advisable to pursue a college education in a country with lower tuition rates, such as the UK.
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International students' visa requirements
International students who wish to study in the United States must obtain a student visa. The type of visa required depends on the nature of the course of study. The two most common student visas are the F-1 visa and the M-1 visa.
The F-1 visa is a non-immigrant visa that allows international students to enter the US and study at institutions certified by the Student and Exchange Visitor Program (SEVP). To be eligible for an F-1 visa, the applicant must be enrolled as a full-time student at an accredited college, university, seminary, conservatory, academic high school, elementary school, or another academic institution, or in a language training program. The program of study must culminate in a degree, diploma, or certificate. Additionally, the student must be proficient in English or be enrolled in courses leading to English proficiency. They must also have sufficient funds available for self-support during the entire proposed course of study and maintain a residence abroad with no intention of giving it up.
The M-1 visa, on the other hand, is for international students pursuing vocational studies or other non-academic programs, excluding language training. Similar to the F-1 visa requirements, M-1 visa applicants must be enrolled as full-time students and meet the English proficiency and financial requirements.
To apply for an F-1 or M-1 visa, students must first gain acceptance into an SEVP-approved school in the United States. Once accepted, the student will be registered for the Student and Exchange Visitor Information System (SEVIS) and must pay the SEVIS I-901 fee. The school will then issue the student a Form I-20, which is required for the visa application process. Students must also complete the Nonimmigrant Visa Application, Form DS-160, and pay the associated fee.
As part of the visa application process, students are typically required to attend an interview at a US Embassy or Consulate, where they must present their Form I-20 to the consular officer. During the interview, students must provide evidence of their financial ability to cover their study and living costs in the US, as well as confirm their intention to return to their home country upon completion of their studies.
It is important to note that student visas are non-immigrant visas, and students are expected to maintain a residence abroad and not remain in the United States permanently. The F-1 and M-1 visas allow students to enter the country up to 30 days before the start date of their program, as listed on their Form I-20.
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International students' residency requirements
To be considered a state resident for in-state tuition purposes, an international student must have a status permitting them to remain indefinitely in the United States. This typically involves demonstrating that their residency in the state is not merely incidental to their education. Most states have established residency requirements to prevent out-of-state students from qualifying for in-state tuition rates. These requirements often include a durational component, with states like Arkansas requiring six months and Alaska requiring 24 months of residency before qualifying for in-state tuition rates.
It is important to note that residency requirements for international students may be established by the state board of higher education or delegated to individual colleges. The determination of whether a student qualifies for in-state tuition is typically made by the tuition classification officer at each college or university, and their decision is binding only at that institution. Additionally, exceptions to residency requirements may be made for certain groups, such as military personnel, children of first responders, and students with dependents.
While international students may not be considered state residents for tuition purposes, their presence significantly impacts college town economies and the finances of public universities. The tuition brought in by international students is often triple that of domestic students, and their enrolment contributes to the social, cultural, and financial landscape of college towns and universities.
In summary, international students' residency requirements vary depending on the state and educational institution in the United States. While international students typically maintain their foreign residency, they can seek to demonstrate their intent to reside indefinitely in a state to qualify for in-state tuition rates, which offer significant financial benefits.
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International students' tax status
The tax status of international students varies depending on the country and visa status.
United States
In the US, international students on F-1 visas are generally considered nonresident aliens for tax purposes for the first five calendar years of their stay. However, they may be considered 'resident aliens' for tax purposes if they pass the 'substantial presence test'. F-1 students who intend to reside in the US for longer than a year are subject to a 30% taxation on their capital gains for any tax year in which they are present in the US for 183 days or more.
Nonresident alien students must file a federal tax return (Form 1040-NR) to assess their federal income and taxes. They may also need to file a state tax return, depending on the state. Even if they did not earn any income, they must file Form 8843 with the IRS. If they have a spouse in the US who is a citizen or resident, they can file joint returns.
International students on F and J visas are generally considered nonresidents for tax purposes. However, they may be considered resident tax filers if they meet the 'substantial presence test'. Resident tax filers have many options for filing their tax returns.
Canada
In Canada, international students are considered residents for income tax purposes if they establish significant residential ties with the country. They are considered non-residents if they do not establish significant residential ties and stay in Canada for less than 183 days during the year. If they do not have significant residential ties but stay for 183 days or more, they may be deemed residents for income tax purposes if they meet certain conditions, including not being considered a resident of their home country under a tax treaty.
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Frequently asked questions
State residents often qualify for lower in-state tuition rates and state education grants. International students are not eligible for financial aid and scholarships and have to pay higher tuition fees at almost every state college.
US citizenship or permanent residency is usually required for state residency. For an international student to be considered a state resident, they must have a status that permits them to remain indefinitely in the United States. The F-1 Visa (Academic Student) allows international students to enter the United States as full-time students.
It is recommended to check in-state tuition rate residency requirements before applying. Residency requirements vary from state to state. Generally, it is best to have at least two government-issued documents that demonstrate state residency. At least one of these documents establishing residency must be dated at least twelve months prior to the first day of classes.
