If You Charge Them, Will They Come? The Effect of Levying Tuition Fees on International Students

Abstract

In 2017, Finland began levying tuition fees on non-European Union (EU)/European Economic Area (EEA) international students. Using data from multiple Finnish government sources, we study the impact of tuition fee reform at various stages of the higher education enrollment selection process. Outcomes examined include how the policy change affects student application behavior, admissions and acceptances by institutions, and student enrollments. To identify the effects of the policy change, we employ a difference-in-differences approach using national register data and program-level tuition variations. Our findings led to three key findings: (1) the implementation of fees did not decrease the number of applications of international students subject to fees to Finnish higher education institutions, but it did induce a decrease in the admitted, accepted, and enrolled international student populations; (2) there was an increase in the proportion of fee-paying international students from the wealthiest countries and a decrease from the less wealthy countries; (3) less wealthy students were incentivized to earn more credits in their first year of study after the introduction of tuition fees. We provide a discussions of the implications for policy and practice and recommendations for future research.