International students are a major source of revenue for U.S. higher education. And when many of those students headed back home for the pandemic, colleges and universities felt the pinch.

Now, foreign students are coming back: There were just over a million in the 2022-2023 school year, according to data released Monday by the State Department and Institute of International Education. That’s up 12% over the prior academic year, but still below the pre-pandemic peak. But where those students are coming from — and what they’re willing to pay — is changing.

More students come to the U.S. for higher education from China than anywhere else. But the number of Chinese students studying here dropped for the third year in a row. And the number of undergraduate and nondegree-seeking students has dropped by about a third since its peak. 

“China really underperformed. If this was Wall Street, and we saw these numbers from China, the stock would plummet,” said Chris R. Glass, a professor of higher education at Boston College.

He noted that now, more Chinese students are studying at home.

“Parents see unaffordable tuition and incidents of gun violence and racism on the news. They’re much more hesitant to send their child to a U.S. institution,” he said.

Students coming from other parts of the world have made up for a good chunk of that decline. sub-Saharan African countries sent 18% more students last year and India sent 35% more. 

Mirka Martel of the Institute of International Education said one reason is these areas have lots of young people.

“But there is not often home country capacity to satisfy those students,” she said.

The impact those students have on a college or university’s bottom line depends on whether they’re undergrads paying thousands of dollars annually in tuition or graduate students getting stipends. 

India, for example, sent about five times as many grad students as undergrads. Glass of Boston College said the revenue implications are significant.

“Our mid-tier public institutions, our regional institutions, our community colleges, all are going to see their balance sheets change as a result of these underlying dynamics,” he said.

Schools can boost international enrollment with online education.

Stephanie Kim, a professor of higher education at Georgetown University, pointed out it reaches a different demographic. 

“They’re typically older adults, they maybe are not as mobile as an 18- to 22-year-old picking up and moving to the United States,” she said.

And you can fit way more students in a virtual classroom than in a lecture hall.