Actually the opposite at many public universities. "Out of state" and international students subsidize in state students because they pay far greater tuition.
I have trouble believing students are paying less tuition because there is a greater demand from international students. If anything, the tuition would be higher. That international students are more profitable doesn't change the value of the degree or what everyone else is willing to pay for it.
Foreign students pay full tuition, domestic students rarely do. Simple as that. This applies to public and private schools. Universities deliberately recruit international students for this reason.
I think parent is right, no international students likely means higher tuition for everyone else. If you're in doubt, ask someone who works in admissions, I expect they'll tell you the same thing.
My point is that international students may "subsidize" the university, but in practice this should have very little to do with what the university would charge its students (they are not "subsidizing" the domestic students). Implicit in your assumption is that tuition uses cost-based pricing which I find hard to believe. Admittedly this is all conjecture on my part but I don't find that line of reasoning persuasive.
The recruitment programs for foreign students are way better here (in the Netherlands) with some universities because they get about double from them vs regulars. Though the difference looks even bigger when you take into account that what students pay is not the same as what the University gets.
I think this is even worsened by the fact that foreign students pay directly towards the university and become a primary source of revenue and the 'regular' students money is tertiary (state) or secondary (scholarship) which has conditions and delays attached.
I guess it is probably the same all over the world.
It is higher, but for out-of-state and international students. That's how public universities have been able to offset low in-state tuition and raise more financial aid.
At least in the topic of H-1B CS / programmers, a good chunk of them are not paying tuition, but rather working as GTAs and GRAs for stipends and tuition waivers. By and large, tuition does not fund CS departments, research does.
It's not only PhDs. I was a Masters student who worked as a GTA and GRA. The dept head of the CS program I work under now has repeatedly told faculty to focus on hiring more PhDs and fewer masters students.
