Dual Threat for International Students: US Visa Stay Limits and Tax Proposals on OPT Earnings

Strategic Insights -

The United States is facing a significant exodus of international students, with enrollment predicted to fall by over 50% in Fall 2025, driven by dual threats: the introduction of visa stay limits and new tax proposals on Optional Practical Training (OPT) earnings. These changes are likely to make studying and pursuing career opportunities in the US less appealing to international students. Foreign students, including those from India, are facing a near 50% reduction in new enrollment.

Key Takeaways:

  • The US has introduced visa stay limits for international students, proposing to change the admission period from 'duration of status' to a 'fixed time period', forcing students to depart the country after a fixed period, except in cases of approved extensions.
  • The new rule will require all F, J, and I non-immigrants to apply for an extension of stay directly with USCIS or depart the country and apply for admission with CBP at a port of entry if they wish to remain in the US beyond their specifically authorized admission period.
  • Senator Tom Cotton has introduced the 'OPT Fair Tax Act' which requires foreign workers participating in the OPT program and their employers to pay FICA taxes, ending existing tax exemptions for employers and putting American workers first.
  • The Social Security tax rate is 6.2% for employers and 6.2% for employees, totaling 12.4%, while the current Medicare rate is 1.45% for employers and 1.45% for employees, totaling 2.9%.
  • The proposed tax changes would require employers to match contributions at the same rate as if the employee were an American citizen, and there is no wage base limit for Medicare taxes.
  • The legislation aims to amend the Internal Revenue Code of 1986 to include the OPT program as employment for purposes of taxes under the Federal Insurance Contributions Act and the Social Security Act.
  • The bill would also implement guidelines limiting the number of international students from a single country in the Student Visa Exchange Program, with a cap of 5% of a university's undergraduate student population.
  • Research from NAFSA and JB International estimates a 30-40% decline in new international student enrollment in the US, resulting in a 15% drop in overall enrollment, nearly $7 billion in lost revenue, and more than 60,000 fewer jobs.

Statistics:

  • 50% predicted reduction in new international student enrollment in the US for Fall 2025.
  • Nearly 50% reduction in new students from India.
  • 30-40% decline in new international student enrollment in the US could result in a 15% drop in overall enrollment.
  • $7 billion in lost revenue due to reduced enrollment.
  • Over 60,000 fewer jobs due to reduced enrollment.
  • 15% of a university's undergraduate student population can be participants in the Student Visa Exchange Program, with a cap of 5% from any one country.

Sources:

  • Sunil Dhawan, The US has introduced a dual threat for international students, combining visa stay limits with new tax proposals on OPT earnings.
  • Senator Tom Cotton, OPT Fair Tax Act.
  • Trump, memo stating, "No more than 15% of a university's undergraduate student population shall be participants in the Student Visa Exchange Program, and no more than 5% shall be from any one country."
  • NAFSA and JB International, research on the potential 30-40 percent decline in new international student enrollment in the United States this fall.
  • [External source: Contify.com]