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Good questions. Some personal insight:

1. I know of one program that admitted about 10 Chinese students one year, none made it through to the doctorate. Most dropped out, some transferred inside the univ, some transferred to programs at other universities. They were recruited on the basis of their quant ability, which is fine, but we are not an all-quant field and they couldn’t hack the other courses.

2. I’ve been on a few admissions committees for doctoral students. The Chinese come in with excellent quant scores, but their letters of recommendation tend to all look the same (”Pu Yi is #1 student in class of 3,000”) and rarely speak to the innovative abilities (which is key for a US doctoral program). The admissions letters written by the candidate often 1)exhibit a poor understanding of what programs are looking for (”it has always been my dream to be a professor”) or obviously look like fakes.

Maybe small schools don’t know how to deal with these issues, but my experience in large state universities is that admissions committees know exactly what they’re looking at and respond accordingly.

And, even when you think you’ve weeded out the fakes, some of them get in and 1)still don’t know English well enough to be a TA or work well with English speakers or 2)get through the courses, but can’t do the independent work required of the dissertation.

It’s good to get rid of the cheats from the beginning, but I also get the idea that many students are so desperate to get into a US school, that they see a consultant-written admissions essay as just the price to pay; they don’t see it as a moral issue or cheating and aren’t bad people in the way I would see an American who paid someone to take his GRE for him.

As for payment, most students at the full time doctoral level, including internationals, are funded by their program. No one is getting a check. At the masters level it is a bit different, since most masters programs aren’t funded the way PhD programs are.