In Depth: How the U.S.’ Foreign Student Loss Could Be Hong Kong’s Gain

Liu Yang, an 18-year-old student, was admitted to the University of California, San Diego but was denied a U.S. student visa after scrutiny of his social media during the immigration interview. Consequently, Liu looked to universities in Hong Kong as an alternative, a shift echoed by many Chinese students seeking backup options amid increasing visa uncertainties in the U.S. and similar barriers in countries like the UK and Australia. These Western countries have imposed tougher policies—such as the Trump administration proposing a cap on international enrolments at top U.S. universities and stricter work visa rules, the UK shortening post-study work visas to 18 months to curb immigration by 100,000 annually, and Australia capping student numbers and raising English language requirements. This policy climate has prompted more students and parents, especially from China, to opt for Hong Kong or Singapore as alternative education destinations [para. 1][para. 2][para. 3][para. 4][para. 5].

Hong Kong, aware of these shifting dynamics, has moved proactively to attract more nonlocal students. In its 2025 Policy Address, the government pledged measures to transform Hong Kong into an "international education hub," including lifting caps on nonlocal student admissions. This is motivated not just by aspirations for internationalization but also by the economic benefits: nonlocal students generate over HK$10 billion ($1.3 billion) annually for universities, with significant spillover into local industries, mainly real estate. These efforts also come as Hong Kong’s traditional economic pillars wane and as the government imposes funding cuts on public universities. However, this rapid growth has exposed persistent issues, such as limited campus facilities and student housing shortages [para. 6][para. 7][para. 8].

On campus, this transformation is visible and audible, with a greater diversity of accents and nationalities. At Hong Kong University of Science and Technology (HKUST), for example, the student body now includes more students from Thailand, Pakistan, and the Middle East, in addition to the traditional pools from Malaysia and South Korea. Government data shows nonlocal university enrolment jumped from 52,800 in 2021–22 to 89,000 in 2024–25, comprising about 30% of Hong Kong’s higher education students [para. 9][para. 10][para. 11][para. 12].

With the enrollment surge, universities have relaxed admission caps: by the 2025 Policy Address, the limit for self-financed nonlocal students at undergraduate public institutions was raised from 40% to 50% of the local enrolment ceiling. Many nonlocal students, particularly from mainland China, are attracted by Hong Kong’s safety, high educational standards, geographical proximity, and pragmatic government talent programs that aid post-graduation employment. Notably, applications to top schools like CUHK, HKUST, and HKU have soared, with CUHK seeing a 50% rise in international undergraduate applications for 2025–26 [para. 13][para. 14][para. 15][para. 16][para. 17].

This trend delivers fiscal relief to universities facing cuts—a 2% annual reduction in funding and HK$4 billion forfeiture from reserves over three years—as tuition and program fees now account for 30% of income, with a record HK$10.6 billion (a 17% increase) received from nonlocal students in 2023–24. The broader economic impact is clear in the real estate market, where intense competition for rentals has pushed average monthly rates near HKU to HK$13,000 for small flats, driven by a critical shortage of dormitory beds—only 48,100 available for 92,000 nonlocal students, with a projected shortage of 120,000 by 2028. In response, government and private sectors are converting properties to student housing, with universities themselves investing heavily in property for expansion [para. 18][para. 19][para. 20][para. 21][para. 22][para. 23][para. 24][para. 25][para. 26][para. 27].

Nonetheless, these gains come with challenges, such as strained teaching resources and difficulty truly diversifying the student body—70% to 90% of nonlocal government-funded students are from mainland China. Experts warn against the risks of “excessive commercialization,” advocating for balanced expansion to avoid the pitfalls seen in other countries, such as declining academic standards [para. 28][para. 29][para. 30][para. 31][para. 32][para. 33][para. 34][para. 35][para. 36][para. 37][para. 38][para. 39].