Despite promises of wage protections for U.S. workers, the foreign student worker program has failed to deliver.
According to Jon Feere, Director of Investigations at the Center for Immigration Studies, “ICE’s Student and Exchange Visitor Program (SEVP) has been misleading the American public since the creation of the program in 2016 and has conducted no wage analysis despite a regulatory requirement to do so. The harm to U.S. workers is significant and the Biden-Harris administration has chosen to allow the harm to continue.”
While the Trump administration attempted to institute transparency in the program and ensure regulatory requirements were met, the Biden-Harris administration eliminated those safeguards.
The Optional Practical Training Program provides tax exemptions to foreign students allowed to work in the U.S. for up to six years, creating $4 billion in tax exemptions in 2023.
OPT was created by the Justice Department in 1992 to give foreign students the ability to gain practical training and supply work authorization. It was developed by the Department of Homeland Security and managed by U.S. Immigration and Customs Enforcement.
In 2023, there were over 500,000 foreign students who were authorized to work through the three different versions of the OPT program.
The Optional Training Program is the most popular and allows foreign students to work for one year after graduation; the STEM OPT allows for an additional 2 years if they have a degree that is qualified as a STEM field by DHS (with an additional 3-year work authorization if a second degree is obtained), and the Curricular Practical Training, which allows foreign students to work while attending school.
While foreign workers are required to pay taxes when employed in the U.S., foreign students are not. Under the Federal Insurance Contributions Act, foreign students who are employed are exempt from FICA taxes. Employers are also exempt from paying unemployment taxes for foreign student workers.
In 2023 alone, taking the 500,000 foreign students enrolled on a $50,000 salary base, the federal government lost over $4 billion from FICA tax exemptions within the OPT programs. This number does not include unemployment tax exemptions.
Feere wrote, “Hiring employees who are not subject to this taxation is a benefit to the employer and a loss in federal revenue – a loss that DHS did not calculate when standing up these programs.”
Feere further explained that there are many options to fix the OPT program such as Congress eliminating these tax exemptions, ICE tightening the program, or DHS reducing the size of the program or eliminating it altogether.
“Ultimately, a change along these lines would likely result in greater transparency and better protections for U.S. workers,” stated Feere.
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