The last few years have seen an influx of foreign institutes of higher education to the Middle East region. For example, recently Japan and Germany started universities in Egypt. Several American and British universities have established "off compass locations" in Kuwait, United Arab Emirates, and Qatar. The Qatar Foundation has partnered with six American universities to establish branch campuses in Doha; the list includes Georgetown University, Northwestern University, and Carnegie Mellon University. New York University is set to open a comprehensive liberal arts branch campus in Abu Dhabi in the United Arab Emirates in the fall of 2010. The London School of Economics, the Manipal Academy of Higher Education, and the University of Wollongong, of Australia, along with several other American universities, like Michigan State University and the Rochester Institute of Technology, have already established satellite campuses in Dubai in partnership with private and government investors. Foreign institutes in the Middle East are not new. The American University of Beirut was founded in 1866 while the American University in Cairo was established in 1919. The mission statements of both universities include reference to providing excellence in education, commitment to research and serving the people of the Middle East. Although it is true that the teaching standards and academic facilities in terms of classrooms, libraries, and laboratories are much better at these institutions compared to their comparable national universities, yet there have been some drawbacks especially in the countries hosting these institutions affecting their societal, cultural, economic, and ultimately political well-being. Some questions to explore: Do these universities have a "brain drain" effect on national universities? Does their use of English as a medium of instruction marginalize Arabic? Do they create a culturally alienated elite? What about their close ties to multinational corporation? And finally, what is their record in their professed research goals? This paper will look closely into the benefits hosting societies gain as well as the price that these societies pay for allowing such an educational model in their homeland.