The Department of Homeland Security is considering imposing a $100,000 fee on international students who want to stay and work in the United States after they graduate. This proposal, if enacted, would betray President Trump’s priorities, set back U.S. science and innovation, and ultimately hurt American workers. A fee of this size would undermine Trump’s long-standing goal of a more merit-based legal immigration system.
This past spring, the president explained to Sean Hannity that he views our ability to attract the best students as a national strength. “Good students . . . come from other countries and they learn our culture and many of them want to stay here,” he said. “I think it’s good.” He’s right.
Finally, a reason to check your email.
Sign up for our free newsletter today.
The Optional Practical Training (OPT) program lets international students work in the U.S. after they graduate. It’s our main pipeline for top talent immigrating here. Many foreign-born engineers at companies like Tesla, Intel, NVIDIA, and OpenAI first entered the U.S. labor market through OPT. So, too, did the founder of Moderna, Noubar Afeyan. In fact, student visas are the typical path for immigrant startup founders: 72 percent of immigrant founders of top AI companies came to the U.S. on these visas. OPT makes it possible.
Being the preeminent destination for the world’s top talent is an American superpower—but DHS’s fee plan would squander this advantage, training students here before taxing them out of staying. The charge would reduce retention and deter top international students from coming here.
A $100,000 fee on OPT would effectively shut down the country’s most important program for new high-skilled immigrants, who will instead go to competitor or adversarial countries to study. This will play directly into the hands of China, which rolled out a visa last year aiming to attract foreign-educated STEM talent.
The long-term consequences would be a smaller STEM workforce in America. International enrollment has already dropped by over one-third, a decline that will cut U.S. real GDP by between $240 billion and $481 billion within a decade. That’s a loss equivalent to destroying a midsize state like Wisconsin or Utah. A $100,000 fee would do even more damage.
Beyond the economic consequences, taxing away OPT undermines Trump’s agenda to expand opportunities for young Americans and protect American workers.
International students pay out-of-state tuition and help subsidize tuition for American students. Public universities have leaned on foreign enrollment to backfill declining state appropriations. An OPT fee would mean that revenue dries up. The remaining choice is between charging in-state families more and admitting fewer of them. More young Americans would soon find themselves priced out of the opportunity of attending college or saddled with greater debt. Universities would also have fewer resources to fund Ph.D. students who contribute to critical scientific research.
An exorbitant OPT fee would counteract the president’s goal of ending the H-1B program as a source of cheaper labor and may also result in more visas for firms that exploit the H-1B. OPT participants are higher-skilled than other H-1B applicants. The median wage for international students who receive an H-1B is $7,300 more than their nonstudent counterparts applying to the program from abroad. This earnings advantage is even starker when considering that international student applicants are, on average, six years younger. Accounting for wage growth over time and a longer working life, international students who stay in the U.S. long-term would earn over $1 million more on average over their lifetime, translating into a significant fiscal benefit for federal and local governments. Effectively ending OPT would shift the scarce work visas from the labs and startups where recent U.S. graduates build careers in advanced fields to the IT outsourcing giants that specialize in replaceable work. The result would be more visas for firms that exploit the H-1B program for cheap labor.
OPT has legitimate problems, and reform is needed. First, many OPT participants are exempt from Federal Insurance Contributions Act (FICA) taxes, relieving both them and their employers from Social Security and Medicare contributions. To the extent employers can’t pass the employer-side FICA contribution onto workers in the form of lower salaries, the FICA exemption creates an incentive to hire foreign workers over Americans. Second, OPT gives schools bad incentives because it empowers them to grant work authorization. “Visa mills” offer low-quality programs and enroll students who really want access to the labor market rather than educational opportunities, charging them a pretty penny in the process. Most concerning are so-called Day 1 CPT programs that offer students work authorization immediately on enrollment, often without strong attendance policies and offering largely online coursework. Lastly, outright fraud in the program needs to be addressed. In May, Immigration and Customs Enforcement (ICE) announced more than 10,000 cases of potential fraud associated with OPT.
But the Trump administration doesn’t need to choose between no reform at all and a massive, clumsy fee that forfeits the immense value that the program delivers. As Sen. Tom Cotton and Rep. Glenn Grothman have proposed, we should level the playing field by ending payroll tax exemptions for OPT graduates. It would also make sense to charge Day 1 CPT programs and other visa mills that $100,000 fee—or do away with them altogether—to keep standards high. And ICE should continue to investigate fraud, terminate fraudulent status, and hold fraudulent employers responsible.
It’s not just OPT that needs fixing. Our skilled immigration system keeps coming under fire for its failure to pass needed reforms. The H-1B visa should shift from a lottery to a more strictly merit-based system that ranks applicants based on projected lifetime earnings. This will not only ensure that we’re bringing the best and brightest but will also tilt the program away from the outsourcers who draw so much warranted criticism.
These policies would address legitimate problems, reduce the debt, and increase innovation, entrepreneurship, and wages for the typical American worker.
President Trump was right when he remarked earlier this year that “our university system does great. . . . You want to screw it up? Take a half a million students out.” DHS’s plan would do exactly that. It would forfeit our major superpower.