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> However Harvard and MIT aren't all about caring about their international students here. They are also thinking heavily about the money they might be losing. International students usually pay a much higher effective tuition rate
As an international MIT alumni, I can confidently say that this is completely wrong. MIT and Harvard have need-based scholarships, meaning that students pay tuition depending on their financial circumstances. Most of the international students come from poorer countries & families compared to an average domestic student and therefore end up paying a lot less in tuition.
Also, MIT's international undergraduate students are usually around 10% of the whole class. Even if you were right, they don't represent a big enough chunk of the whole class to have a significant impact on the money they're making.