I have heard of somewhat similar complaints at the post-grad level, but not at the under-grad level.
I would then, however, ask the question as to why are there so many foreign students and so few American students in engineering programs.
Is the work too difficult? Are the salaries too meager?
In the past couple of decades, people who would have entered the engineering field have two other career fields open to them: finance and computer programming. So the engineering schools no longer have a monopoly on prospective “quant” students.
There is also an arrogance on the part of professors (of all ethnic and cultural persuasions) that gets transferred to the students. And the students then take it to the work place and back to academia. Becomes an unpleasant and growing spiral. Folks who don’t like it go to grad school for an MBA and get out of engineering and into management.
[Don’t get me started.

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There are a couple of reasons I see for the a limited pool of native-born American engineering undergraduates who choose to go on for doctoral degrees in engineering. Maybe because you can get a good job in industry with a bachelor’s degree in engineering, whereas career opportunities with a doctoral degree in engineering are much more specialized, and in some sense more limited (if you want to work in your field of specialty, that is), for not a lot more money. The general assumption has been that, for the 5-6 years you spend in graduate school earning your $15-20k stipend, you probably come out behind in lifetime earnings versus someone who starts off in industry with a bachelor’s - within 5 years, they have already hit the salary that someone with a PhD would start at, and have earned an additional $150-250k during the intervening years, while the poor PhD student was in graduate school.
Traditionally the carrot at the end of the stick for the PhD in engineering would be a faculty position, which might not pay that well, but gives lifetime security in the form of tenure, with the added ego boost of being a very important fish (albeit in a very insignificant pond.) But academic positions are harder to come by these days - competition is fierce, 2-3 years of postdoc is becoming standard even in engineering, and then you have to work your tail off for another 5-6 years to get tenure, even at (or especially at) the smaller schools, to develop a “world-renowned, extramurally funded research programme”. So that carrot is no longer enough to entice as many domestic students into PhD programs.
So anyway, there’s a limited pool of domestic engineering students who are so motivated by love of the subject that they want to forgo earning money so they can study something in great depth while being treated like slave labor by some professor. The domestic students, as long as they did halfway decently as undergrads, are eagerly courted by the highly-ranked schools - your Stanfords, Berkeleys, Michigans, MITs, etc. Those schools also bring in some foreign graduate students, but typically only the top students from the best foreign schools, i.e. the top couple of IIT campuses in India, a few renowned schools in Korea, China, etc, as well as the better universities of Europe. And they typically get foreign students who are a bit more proficient in English.
This leaves the majority of mid- and lower-tier universities with a lot of positions in their doctoral programs to fill, without a whole lot of domestic talent to draw upon. So you get, in the smaller or lesser-known programs, up to 80-90% foreign graduate students, further down in the talent pool from the well-known foreign schools (as well as some pretty sketchy schools abroad) and with much greater variability in English skills.
That said, I have to caution against equating the quality of a school’s undergrad engineering program and the graduate program. I think the undergrad program is driven much more by the quality of the teaching, be it the professors or the graduate instructors. The graduate program is helped immensely by having good funding and facilities, which goes along with having big-name professors who pull in the research grants.