Beyond Stanford: Silicon Valley foreign talent pipeline winds through little-known schools
Economic Development Reporter-
Silicon Valley Business Journal
An overview of the number of F-1 international student visas issued for Silicon Valley colleges, ranging from expensive and elite Stanford University to schools with much less name recognition — and much murkier academic and legal positions.
It’s no secret that Silicon Valley is powered in large part by imported talent.
More than a quarter of a million college-educated, foreign-born workers are employed in Santa Clara and San Mateo counties, according to think tank Joint Venture Silicon Valley.
But a new report reveals a disconnect between the stereotypical image of international Stanford computer science grads coding away on Google Inc.’s newest products and the day-to-day reality for many foreign-born students seeking their big break in Silicon Valley.
About 19,000 students, more than 10,400 from India alone, studied in the San Jose metro area on F-1 international student visas from 2008-2012, according to the new Brookings Institution report based on federal immigration records. That makes Silicon Valley the No. 9 market nationwide for F-1 students behind larger urban areas like New York, San Francisco and Los Angeles.
However, three out of the top five colleges for international students — Sunnyvale’s for-profit Herguan University, plus San Jose-based International Technological University and Silicon Valley University — deviate from traditional higher education models, offering cheaper tuition and mostly advanced-degree programs driven by workforce demand.
“You see these schools that you haven’t seen before or heard of,” said study author and Brookings fellow Neil Ruiz. Ruiz found that most international students nationwide still end up at large, traditional schools like the University of Southern California and Columbia University. That makes Silicon Valley “an outlier,” he said.
Some of the under-the-radar schools in Silicon Valley have been linked to federal immigration investigations. 2012 tax filings for ITU also reveal operating losses and loans to now-departed executives. Silicon Valley University’s filings indicate atypical work arrangements and pay for board members and its CEO.
The question now is whether pending visa fraud charges against Herguan CEO Jerry Wang, along with inflamed immigration politics and spiking demand for tech talent during a tech boom will alter the region’s unique market for international education.
In the meantime, the economic stakes for the students — and Silicon Valley — are enormous.
Ruiz said that the nearly 20,000 international students that have cycled through the region on F-1 visas from 2008-2012 paid more than $600 million in tuition and local living costs (not factoring in financial aid). There are also international business ties to consider.
it’s same thing with the financial hub in San Francisco (that) is well connected with Beijing and Seoul.”
Feeding the STEM talent pipeline
One city rises far above the others as the most common hometown for Silicon Valley’s international student base.
The No. 1 location of origin is the South Indian city of Hyderabad, which accounted for 2,826 students on F-1 visas, the new Brookings report found. No. 2 is Mumbai with 529 students, then Beijing with 447 students and Seoul with 440 students.
Past reports by Ruiz and others have established a similar pattern of Silicon Valley’s reliance on India, along with other Asian nations, for workers employed through H-1B visas — a separate legal area that has raised concerns from critics about underpaying workers or eliminating jobs for U.S. citizens.
Both H-1B and F-1 visas have been a target of Silicon Valley immigration reform lobbying efforts, which seek to raise the number of available visas and allow companies to hire more international workers.
The majority of students on F-1 visas, just under 10,000 individuals from 2008-2012, studied engineering or computer science, Brookings reported. About 4,700 students studied business disciplines, seeking an MBA or degrees in fields like marketing and sales.
How those skills actually translate to the region’s job market, however, remains up for debate. Silicon Valley ranks No. 50 nationwide when it comes to retention of foreign students, with just 35 percent staying in Silicon Valley after school.
While immigrant workers and their employers often argue that federal immigration laws make it difficult to stay in the country legally, the low retention numbers also raise questions about the real-world value of degrees completed by foreign students.
In the meantime, Ruiz is interested in figuring out what sorts of marketing American colleges are doing to attract foreign students, particularly in Southern India.
“I don’t know how they’re being recruited,” he said. “We need that story to actually see the link.”
Going to school for a degree or a visa?
The new Brookings Institution report isn’t the first to highlight inconsistencies in the educational opportunities available to international students in Silicon Valley.
As far back as 2011, the Chronicle of Higher Education detailed a system where colleges including Herguan University, “exploit byzantine federal regulations, enrolling almost exclusively foreign students and charging them upward of $3,000 for a chance to work legally in the United States. They flourish in California and Virginia, where regulations are lax.”
But that narrative has shifted with 2012 criminal charges against Herguan University CEO Wang and heightened demand for tech talent from large employers. And the three lesser-know schools attracting large numbers of international students in Silicon Valley occupy distinctly different niches.
Wang was indicted on federal visa fraud charges and is currently awaiting a November court date with a Northern California U.S. District Judge, court records show. That hasn’t interrupted the school’s advertising of its low-cost courses.
Herguan has also accumulated a handful of recent online reviews. They range from a one-star “Fake school do not go,” to a five-star review asserting that, “Classes are equivalent to Harvard and Stanford University.” Wang’s lawyers did not respond to requests for comment.
While Herguan is an unaccredited private school advertising classes starting at $295 per credit, Silicon Valley University does have accreditation from the Accrediting Council for Independent Colleges and Schools and offers bachelors, masters and doctoral degrees. The school is not accredited by regional bodies that certify top-ranked state and private universities.
Silicon Valley University denied a charge in Wang’s indictment that it accepted transfer credits from Herguan, which was one stipulation of federal law that Wang was charged with violating. Silicon Valley University did not respond to requests for comment, but IRS records also show an atypical lack of compensation for board members and executives.
Three directors were listed as working zero hours per week and receiving zero compensation. The school’s president, Feng Min Jerry Shao, was listed in 2012 as working an average 20 hours per week and receiving zero compensation.
The same 2012 tax form notes that school administrators believed they had been “getting recognition in the Silicon Valley as one of the good training institute (sic) for high-tech professionals.”
Finally, there is downtown San Jose’s International Technological University, which in 2013 won a well-regarded accreditation after a 2011 San Jose Mercury News report questioned whether ITU, Herguan and other schools met federal standards for serving international students.
ITU has attempted a re-brand as it looks to disassociate from that field and expand its programming both online and in person.
“The same agency that accredits Stanford and the UCs accredits us,” ITU COO Rebecca Choi told me. “To be entangled with people who may be breaking laws… it’s just not in the same genre.”
But ITU’s financial records offer interesting data points: 2012 IRS records reveal that the school’s expenditures of $10 million outpaced revenue by $2.8 million. One now-retired executive vice president alone earned $385,000 in compensation and was loaned $1 million for the “purchase of IT.”
Though Choi said ITU spends little money on traditional advertising, the school has grown its enrollment in recent years from a low of less than 100 students a decade ago. Recent enrollment data provided by ITU shows that 1,838 students were enrolled this summer, including 1,545 full-time students — 1,400 of which were on F-1 visas. India, China, Nepal, Pakistan and Vietnam were the top countries of origin.
“They’re approved universities,” Ruiz said. “They may not be Carnegie ranked, but they do have a purpose”
Lauren Hepler is the economic development reporter at the Silicon Valley Business Journal.
Sep 4, 2014, 7:16am PDT