I assume the question refers to education within western universities, and I respond in those terms.
The single biggest challenge I find, besides that of academic literacy (encompassing English literacy) is that of developing skills in "critical thinking". Even very smart students find this a challenge. It seems that critical thinking, in all its forms, is not encouraged or fostered (let along taught) in many non-western countries.
Both Miss Fatimah Petra and Mr. Martin Davies are to the point. But a foreign student referes to a student studying in an alien country. Now China also has many foreign students. Language barrier is the largest issue to deal with. If no language barrier, other problems can be solved more easily.
One additional issue I've heard from international students in the US is the time it takes to translate lectures and discussions in their head prohibit them from fully participating. I think a lot of faculty think international students are quiet or shy because they do not contribute during discussion, but the reality is, by the time they translate what is being said in their head, the discussion has taken a turn in a different direction. Certainly, this is related to language, but there is more to it than that.