Over at Talking Points Memo, John Judis blames the Bush administration and the Department of Homeland Security for the tightened visa rules for foreign students at American universities. Judis writes,

During the Cold War, American officials discovered that one of the best ways to promote democratic capitalism at the expense of communism was by luring foreign students to American colleges. Some of these foreign graduates returned home to become the leaders of reform movements in their countries. Others stayed in the United States and contributed their skills to the great postwar boom. The same reasoning that prevailed during the Cold War should prevail during the war on terror. The United States should be eager, one would imagine, to expose students from abroad to democracy and religious pluralism, as well as to take advantage of their skills. But not the Bush administration and the Republican Congress...

I don't think having foreign students study at American schools is nearly as beneficial as Judis imagines. Many of the fundamentalists the US is currently fighting were educated in the west; for example, Sayyid Qutb, whose writings form the foundation of modern Islamic fundamentalist thought. Qutb was educated in Colorado State College of Education, in Greeley; furthermore as this New Yorker piece on Al Qaeda notes, the time he spent in the US was a crucial period of Islamic radicalization for him:

Qutb had studied American literature and popular culture; the United States, in contrast with the European powers, seemed to him and other Egyptian nationalists to be a friendly neutral power and a democratic ideal. In Colorado, however, Qutb encountered a postwar America unlike the one he had found in books and seen in Hollywood films. "It is astonishing to realize, despite his advanced education and his perfectionism, how primitive the American really is in his views on life," Qutb wrote upon his return to Egypt. "His behavior reminds us of the era of the caveman. He is primitive in the way he lusts after power, ignoring ideals and manners and principles." Qutb was impressed by the number of churches in America—there were more than twenty in Greeley alone—and yet the Americans he met seemed completely uninterested in spiritual matters. He was appalled to witness a dance in a church recreation hall, during which the minister, setting the mood for the couples, dimmed the lights and played "Baby, It's Cold Outside." "It is difficult to differentiate between a church and any other place that is set up for entertainment, or what they call in their language, 'fun,' " he wrote. The American was primitive in his art as well. "Jazz is his preferred music, and it is created by Negroes to satisfy their love of noise and to whet their sexual desires," he concluded. He even complained about his haircuts: "Whenever I go to a barber I return home and redo my hair with my own hands."

Qutb returned to Egypt a radically changed man. In what he saw as the spiritual wasteland of America, he re-created himself as a militant Muslim, and he came back to Egypt with the vision of an Islam that would throw off the vulgar influences of the West. Islamic society had to be purified, and the only mechanism powerful enough to cleanse it was the ancient and bloody instrument of jihad. "Qutb was the most prominent theoretician of the fundamentalist movements," [Al-Qaeda second in command] Zawahiri later wrote in a brief memoir entitled "Knights Under the Prophet's Banner," which first appeared in serial form, in the London-based Arabic newspaper Al-Sharq al-Awsat, in December, 2001.

Mohammed Atta, the lead 9/11 hijacker, was also a student at a western university (in Germany).

My personal observation has suggested that many students from Arab countries tend to have much the same reaction. They usually do not fit in well with most American college students, a circumstance which breeds isolation and radicalization.

Judis disapprovingly cites a statistic on the fall of graduate school applications to the US: they are down 32% this year. It should be noted, however, that almost all graduate school programs (with the exception of MBAs and law degrees, which make up a very small percentage of the programs that foreign students usually apply to) pay stipends to the students without requiring any tuition. This is quite unlike programs in Europe, which, on the contrary, do not offer financial support to non-EU students. Which means that each foreign graduate student costs $10,000-20,000 per year to the American taxpayer/undergraduate student body. Surely this hefty price tag should be entered into the calculation before proclaiming that the end result makes America worse off?