The New York Times ran an article on "The Disappearing American Grad Student" a few days ago. Nothing new there, but hopefully the start of a conversation.
I think in PhD programs in engineering the numbers are closer to 100% foreign than 80%, except at top universities. Some universities have been able to increase the number of American students in Master's programs by devising opportunities for their best undergraduate students (4+1 program at SMU, which allows SMU undergraduate students to obtain a Master's in an accelerated timeframe, Presidential Scholars at Lehigh, which allows the very best students to get one year of graduate tuition for free if they graduate with a Bachelor's with a very high GPA, in my memory it is "with highest honors", Master of Engineering in Electrical Engineering and Computer Science at MIT)
Since we're entering an era of increased continuous education, it is also worth noting that maybe Americans are disappearing in STEM from university campuses, but students who work (and those are more likely to be Americans, due to the work permit situation) are more likely to pursue distance degrees that they can complete while remaining employed. That goes back to the fact that student profiles are changing, with more non-traditional students returning for a degree to remain competitive in the workforce. We have to find a way to provide a superb graduate experience for those students too and perhaps we have to start offering more tuition aid to Master's students to attract the best ones, instead of hoping that companies provide appealing tuition remission packages. If we want more Americans pursuing engineering PhDs, we probably need to design a degree progression plan that allows for completion of a substantial part of the program part-time, with maybe a one- or two-year residency requirement.
The last thing I wanted to point out about the article is the picture that was chosen to accompany it. It shows non-white students listening to a lecture at NYU. There is an implication there, maybe unconscious, that non-white students can't be American. This only reinforces stereotypes. All the students in that picture could be American. If this was an intro to calculus course at the undergraduate level, the same students in the picture probably would be American. And white/Caucasian students could be European rather than American. Better to put a bland picture of the NYU campus instead of trying to illustrate a point using pictures of people's faces.
Foreign students can play a critical role in filling the gap in STEM expertise in the U.S. and many hopefully will become Americans some day if they are not already. That graduate programs have a lot of foreign students is not a problem. Problems start if we are no longer able to recruit them, because there are not enough Americans interested in those programs, and if they are not able to stay in the U.S. after graduation, returning to their home country to provide that country with a competitive advantage using skills acquired in America. Given the U.S. economic landscape that requires increasing levels of technical skills, it is in the U.S.'s best interest to train many graduate students, whether American or foreign, and keep them in the country.