The Department of Homeland Security (DHS) is seeking to impose unprecedented monetary obligations on higher education institutions recommending foreign students for Optional Practical Training (OPT). Under the proposed framework, Student and Exchange Visitor Program (SEVP)-certified colleges and universities would be required to pay an initial fee of $70,000 for each student recommended for OPT, followed by $30,000 for any subsequent authorization, such as the 24-month STEM OPT extension.
With OPT participation standing at approximately 300,000 foreign students annually, the proposal represents a systemic shock to the U.S. higher education and immigration landscape. While DHS frames the rule as an anti-fraud measure designed to shield domestic labor markets and enforce institutional accountability, the rule raises profound administrative and constitutional law vulnerabilities.
Mechanics of the Proposed Rule
Under existing regulations (8 C.F.R. § 214.2(f)(10)), eligible F-1 students obtain an endorsement on Form I-20 from a Designated School Official (DSO) at no institutional cost, subsequently submitting Form I-765 to U.S. Citizenship and Immigration Services (USCIS) accompanied by standard filing fees.
The proposed rule radically alters this administrative process:
- Institutional Upstream Liability: Rather than conditioning the fee directly upon the student’s application to USCIS, SEVP-certified institutions must remit the fee before the DSO can record the OPT recommendation in the Student and Exchange Visitor Information System (SEVIS).
- Conditional Adjudication: USCIS is barred from issuing an Employment Authorization Document (EAD) absent verification of SEVIS fee satisfaction.
- Discretionary Refunds: If an application is ultimately denied or unadjudicated, refunds are considered solely on a discretionary, case-by-case basis without administrative appeal rights.
- Passing-On Mechanism: DHS explicitly suggests that institutions mitigate budgetary impact by shifting the financial burden onto students or prospective employers via administrative riders or surcharges.
Core Legal Vulnerabilities Under the Administrative Procedure Act (APA)
Should DHS finalize this proposal in its current form, it will face swift legal challenges under the Administrative Procedure Act (5 U.S.C. § 706). Challengers will likely raise three primary causes of action:
Violation of the Independent Offices Appropriation Act (IOAA) and Fee Authority
Under the current regulations, USCIS user fees may be set at a level ensuring recovery of the full costs of providing adjudication and naturalization services. In addition, the law establishes that user fees must be fair and equitable, determined by the actual cost to the government, value to the recipient, and public policy served.
We believe that A $70,000 fee to enter an administrative recommendation into SEVIS bears no rational relationship to the cost of maintaining SEVIS or processing the record. In effect, the fee functions as an unauthorized excise tax or prohibitive tariff intended to suppress program participation, exceeding the statutory authority granted by Congress.
Procedural Deficiencies and the Abbreviated Comment Window
The agency instituted a compressed 30-day notice-and-comment period. Given that this rule would levy tens of billions of dollars in aggregate annual costs across the U.S. academic sector, a 30-day window likely fails to afford the public a meaningful opportunity to comment pursuant to 5 U.S.C. § 553, especially where complex regulatory flexibility and economic analyses are required.
III. Practical Implications for Stakeholders
| Stakeholder | Practical & Legal Exposure |
| Colleges & Universities | Fiscal Impossibility: Mid-sized and large research institutions recommending thousands of students annually face hundreds of millions in potential liabilities. Passing these costs to students creates massive recruitment disparities compared to institutions in competitor nations (e.g., Canada, the UK, Australia). |
| International Students | Exclusionary Barrier: Unless sponsored by an employer or possessing extraordinary personal wealth, F-1 graduates will effectively be barred from gaining practical training, neutralizing one of the primary incentives for pursuing U.S. degrees. |
| U.S. Employers | Talent Pipeline Disruption: Employers reliant on the 36-month STEM OPT runway to bridge foreign talent into the H-1B or permanent residency pipeline will face immediate hiring bottlenecks, particularly in critical engineering, artificial intelligence, and semiconductor fields. |
Conclusion & Outlook
While DHS maintains that the proposed fee is necessary to protect domestic wages and deter fraudulent training arrangements, the astronomical figure—$70,000 for initial OPT and $30,000 for extensions—transgresses traditional user-fee boundaries and operates as an unlegislated ban.
Because the measure is currently at the Notice of Proposed Rulemaking stage, existing OPT regulations remain fully in force. If the agency proceeds to issue a Final Rule without fundamentally restructuring the fee schedule, a coordinated coalition of higher education institutions, industry groups, and immigrant advocacy organizations will almost certainly seek nationwide preliminary injunctive relief in federal district court, where the rule will face severe statutory headwinds. This is a very disturbing development which further seeks to stifle lawful immigration to the United States.