Jeff Brown, dean of the Gies College of Business, told Times Higher Education that the insurance would be “triggered” in the event of a 20 percent drop in revenue from Chinese students at the two colleges in a single year as a result of a “specific set of identifiable events.”
“These triggers could be things like a visa restriction, a pandemic, a trade war — something like that that was outside of our control,” he said.
Tuition revenue from Chinese students makes up about a fifth of the business college’s revenue.
Brown said that the insurance would cover the colleges’ losses if the decline was temporary and buy the university time to “make some adjustments to where we recruit” if it became a longer-term issue.
“Hedging the risk that we face gives us more confidence to be able to continue proactively investing in the very strong relationships that we have in China,” he added.
“We chose the $60 million figure because that roughly is our exposure across the two colleges. If demand had actually completely disappeared, we’d be ‘made whole’ for that year.”