Universities get most cash from international students. Competition for top universities overseas is worse than US.
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What is the point of paying $250K in college education and then being replaced by Indians h-1bs?
That's not necessarily true. While the tuition may be higher for international students, it is usually the same as it is for out-of-state students. What is different is that the various departments not only get to keep the application fees, but also tuition for discretionary use in their respective departments. In other words, the money from international students at schools like UCSD, don't have to be sent to the UC System. The rip-off part is where schools like Berkeley admit twice as many students to their STEM Ph.D. programs as they plan on advancing to candidacy, and half of them are foreign students.