The market.  The international student market consists of approximately ~7 million students globally who pursue higher education somewhere outside of their home country. Four English-speaking countries — the U.S., U.K., Canada and Australia — are the largest destination markets,  attracting approximately half of all globally mobile students. The U.S. remains the largest host region, with over 1.1 million international students, while Canada hosts around 1 million students (despite being only 1/9 of the U.S. population), the U.K. 730K, and Australia around 790K. 

The market has grown meaningfully over the last 20 years. Today, the United States currently hosts more international students than ever, surpassing pre-pandemic levels. The 1.1 million enrollments in the 2023-24 academic year was a record high (7% YoY growth), marking a robust recovery from the pandemic-era decline and continuing a long-term growth trajectory. Twenty years ago, in 2005, only approximately 565,000 international students studied in the U.S.

On the sending side, today China and India are the leading source countries, accounting for a large share of all international students across these destinations. In the U.S., those two countries together now make up 54% of international enrollment. China was the top sender for over a decade, but India has recently surged, and in 2023 India overtook China as the largest source of foreign students in the U.S.. Similarly, in the U.K., Indian enrollments grew more than tenfold from 2017 to 2022. 

There is, however, increasing diversification in source countries. Beyond Asia, significant growth is coming from countries in Africa, Latin America, and the Middle East. For instance, Sub-Saharan Africa was the fastest-growing source region for U.S. campuses for the second year in a row (up 13% in 2023/24), based on Opendoors data, with record numbers also arriving from Nigeria, Ghana, and Kenya. Similarly, Canada’s recent boom includes rising numbers from Nigeria, Philippines, Nepal, and francophone African countries.

Economic Impact. International education is not only an academic asset but also a major economic engine. In the U.S., education is considered one of America’s largest service exports, injecting tens of billions of dollars into the economy each year. The U.S. Department of Commerce has ranked education as the nation’s 6th-largest service export in recent years. According to NAFSA, the Association of International Educators, foreign students contributed $43.8 billion to the U.S. economy in the 2023-24 year, supporting about 378,000 American jobs across higher education, accommodation, transportation, retail and other sectors. Their data showed that “for every three international students, one U.S. job is created/supported.” 

As a result, while the 1.1 million students in the U.S. accounted for only 6% of the total higher education population, recent research has found that international students account for about Many U.S. colleges and universities depend on international students for financial stability, especially in an era of constrained budgets and demographic headwinds. International students are typically ineligible for need-based federal aid, and most pay full tuition (plus additional international fees in some cases). At public universities, they are charged out-of-state tuition rates; at privates, they often receive limited if any aid.  of tuition revenue at U.S. colleges and universities. Beyond funding university operations, their tuition payments allow universities to offer more scholarships and lower debt burdens for American students. By one estimate, the presence of full-paying foreign students means U.S. undergraduates take on 10% less student debt on average.

The U.S. higher education sector’s reliance on international students became especially apparent during the pandemic, when new international enrollments dropped and many universities faced financial strain. With U.S. college-aged populations projected to fall as a result of lower birth rates following the Great Financial Crisis (the “enrollment cliff”), foreign students are viewed as key to filling classrooms and maintaining tuition income.

Soft Power and Strategic Benefits. International students also generate substantial soft-power dividends and long-term strategic benefits for the U.S. and other “host countries.” When foreign graduates return home (as the majority do), many become informal ambassadors for the values and culture they were immersed in as students. They build lifelong friendships and professional networks that connect their home countries with the country they studied abroad in, across business, academia, and government. This phenomenon – sometimes called the “brain circulation” – has immense diplomatic payoff.

For the U.S., in a pragmatic sense, hosting international students is a soft-power strategy that yields economic and geopolitical benefits: it creates a global network of American-trained talent and goodwill, and it showcases the U.S. as an open, innovative society. 

According to a December 2023 social impact report by MPOWER Financing, a company that helps international students fund international education, 86 current world leaders were educated in the U.S., Britain, the European Union, or other advanced democracies outside of their own country. Of those, 42 current presidents, prime ministers, and their equivalents around the world have earned a degree at a U.S. school. Examples range from former UN Secretary-General Kofi Annan (Macalester College) to numerous heads of state across Asia, Africa, and Latin America.

Even while studying, international students enrich American campuses and communities. They bring global perspectives into classrooms and research labs, enhancing the education of U.S. students with cross-cultural exposure. This “internationalization at home” produces more globally competent American graduates – an often overlooked but valuable outcome. 

Leadership, Entrepreneurship and Talent Pipelines. A significant number of international students choose to stay and build their careers in the United States after graduation – and their impact on the U.S. economy has been profound. Through work authorization programs like OPT (Optional Practical Training) and subsequent employment visas, many foreign graduates join the U.S. workforce, particularly in high-skilled sectors like tech and engineering. Some go on to become founders and executives of major American companies. Of note, over 25% of U.S. billion-dollar startup companies have at least one founder who first came to America as an international student.

In fact, hundreds of startup founders who met as students in U.S. universities have built household-name companies. These include Google, Tesla/SpaceX, WhatsApp, Chobani, eBay, PayPal, YouTube, DoorDash and countless others. Today, many Fortune 500 companies are currently led by former international students – from Google (India) and Microsoft (India) to NVIDIA (Taiwan), Broadcom (Malaysia) and AMD (Taiwan).

Business Models. Despite geopolitical and pandemic challenges, the international education market remains robust and is forecasted to keep growing. The U.S. saw a 12% jump in international enrollment in 2022/23 – the fastest growth in 40 years, and other destinations similarly report high demand. Competition for students has intensified. Countries like Canada and the U.K. have implemented friendly visa policies (e.g. post-study work rights) and aggressive recruitment initiatives, allowing them to rapidly increase their market share. Market analysts project global student mobility will exceed 8–9 million by 2030, with Asia and Africa supplying a growing share of that demand. 

The growth of international education has given rise to a sizable global industry that facilitates student mobility. Each of the below segments represent multi-billion TAMs. This includes:

• Education Agents & Recruitment Platforms: international students have been guided by education agents or counselors in their home country who help with college applications and visas, increasingly with tech-enabled platforms, digital recruitment platforms and online marketplaces connecting students with universities. IDP Education in Australia, ApplyBoard in Canada, LeverageEdu and Leap Scholar in India are examples. 
• Pathway Programs and Academic Preparation: many international students need additional language or academic support. Specialized pathway providers like Navitas in Australia, INTO University Partnerships or Cambridge Education Group in the U.K., or Shorelight Education and Kaplan in the U.S., run “foundation” or first-year programs that prepare international students for degree study. These private providers often share revenue with universities and also handle overseas marketing and recruitment.
• Student Services: A range of other businesses support international students before and during their studies – from visa consulting and travel services to housing and internship placement. Fintech startups now offer education loans targeting cross-border students (e.g. Prodigy Finance, MPOWER), and insurtech firms provide specialized health insurance.
• Standardized Testing and Test Prep: Proficiency exams like TOEFL and IELTS, as well as entrance exams (SAT, GRE, GMAT), are often prerequisites for study abroad. Organizations such as ETS (which administers TOEFL and GRE) and the IELTS consortium (co-owned by British Council and IDP) generate hundreds of millions in revenue annually from testing. In parallel, a vast test-preparation sector thrives, especially in Asia. Companies like China’s New Oriental Education remain large public companies, even after regulatory challenges over the last few years.  

In terms of risks, the industry can be cyclical and policy-dependent. Visa rules or geopolitical events can swiftly alter student flows (as seen with China-U.S. tensions or Russia’s decline as a source market). Moreover, technology is driving disintermediation in some areas (e.g. direct online applications might reduce reliance on agents over time, and online/remote learning options present both a threat and an opportunity). Nonetheless, the international student market is a multi-faceted, growing market, underpinned by the enduring global demand for quality education and the economic and career benefits it confers.

‍Personal. On a personal note, this market segment carries personal resonance for us at Lumos. Many of our team’s own families have lived the story of international education. For example, James’s parents came from the Philippines to the U.S. for graduate school in the early 1960s and 1970s, respectively, and built their careers and life thanks to the opportunities afforded by American universities. Victor arrived from Taiwan as an undergraduate student, pursuing an education in the U.S. that also eventually led to settling down in the U.S. Mady also came to the U.S. from Canada for undergraduate education. International education is not just about degrees and jobs; it is also about the forging of new identities and legacies. We have seen first-hand how international education can transform lives; that fuels our passion at Lumos for expanding access to global education and supporting international students. We are, in many ways, the products of the American dream powered by education, and we remain committed to ensuring that dream continues to be accessible to brilliant minds from all corners of the world.