Lost in Transition

The costs of tighter borders.

Few contest the need to secure American borders against terrorists. But if immigration policy can't offer such security without unduly burdening commerce and education, the cost may come not merely in the form of a delay here or there but as a broader shift of brains and business overseas.

A study by the Santangelo Group, commissioned by a coalition of eight trade associations, estimates that U.S. companies have lost more than $30 billion as a result of the new rules on entering the country. The Transit Without Visa and International-to-International programs, which had allowed some travelers to bypass visa requirements, were suspended in August 2003.

Background checks and interviews are now required for younger male visa applicants from 26 countries with Muslim majorities and for travelers from "technology alert" countries, such as China, who are visiting high-tech businesses. Just securing an interview can take more than a month. Of the companies surveyed in the trade association study, 73 percent said they had experienced problems processing visas, and 60 percent reported a "material impact" in some cases requiring relocation of personnel or business functions offshore.

There are also signs of a longer-term brain drain. The Government Accountability Office estimates that "Visa Mantis" security checks for foreign science students take more than two months on average, sometimes far longer. A poll of top chemistry departments by Chemical & Engineering News showed that 71 percent had foreign students who had encountered difficulty returning to the U.S. after leaving the country, and 74 percent had accepted students who were unable to begin their studies because of visa problems.

These problems are beginning to show up in higher education application patterns: A study by the Council of Graduate Schools and several other U.S. educational associations found that 60 percent of the graduate schools they surveyed reported declines in applications from foreign students. Overseas graduate applications declined 32 percent between 2003 and 2004, and foreign students are taking graduate entrance exams such as the GRE and the GMAT in rapidly dwindling numbers.?