No, he means its "so much cheaper" to pay for American Grad Students versus foreign ones who need Student Visas. I've been told by a professor who's brought in Chinese grad students (he himself is Chinese) that its really hit and miss. And you put up a bond for their visa -- they bail on your program or commit a felony, that's your grant/research/grad student funding money going out the window. It doesn't happen very frequently, but it does happen.

Another situation with foreign grad students is that they get here, and after a year or two of abuse in a lab, they go get a life, and get married or (iff female) get pregnant. Then, their work ethic trends "Average American" and they adopt the "take this job and shove it" attitude.