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Ross | Mr. Automotive Compliance Professional
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Trump Suspends H-1B Through 2020, But Leaves OPT Intact

U.S. President Donald Trump has signed an executive order temporarily suspending the H-1B visa program

PROPOSED CHANGES TO OPT COULD STILL BE UNDERTAKEN IN FUTURE

Anti-immigration rhetoric has already taken a toll on U.S. higher education. According to the U.S. State Department, the number of student F-1 visas dropped 22% from 2016 to 2018. Yet the overall volume of student influx to the U.S. remains massive. According to the November 2019 Open Doors report by the Institute of International Education, the number of international students in the U.S. set an all-time high in the 2018-2019 academic year, the fourth consecutive year with more than one million international students. That academic year, approximately 220,000 people took part in the OPT program; the number for 2019-2020 has been estimated as high as 253,000. Perhaps Trump, in sparing OPT, is acknowledging that suspension of OPT makes little economic sense: According to a May 2020 report by Public Radio International, industries with more OPT participants actually have lower unemployment rates compared to those with fewer OPT participants.

Or perhaps the president was convinced by members of his own party. As The New York Times reported last week, even as congressional Republicans have been some of the program’s harshest critics, 21 GOP House lawmakers argued in a letter to the Trump administration that OPT “is necessary for the country to remain a destination for international students.” They pointed out that foreign students and their families contribute more than $40 billion into the economy each year — even though they represent only 5.5.% of U.S. college enrollments. Joining industry and academia, the GOP House members pleaded with Trump to preserve OPT (and H-1B). Privately, according to reports, Republican senators in recent weeks also asked the White House not to proceed with an executive order that disrupts OPT.

However, some members of the Trump administration, supported by such groups as College Republicans and others, had called for measures that abbreviate the OPT program in various ways — proposals that still could be undertaken in future as a way to encourage companies to hire more Americans and pay them higher wages, Trump’s stated goal. They include scaling back the program to a 12-month program and eliminating the STEM extension; limiting applications for OPT to those who graduated in the top 25% of their class at their university; redefining the employer/employee relationship; expanding labor attestation requirements; and raising the fee for an H-1B applicant to help reduce the $1.3 billion deficit of the agency that authorizes STEM designations, Citizenship and Immigration Services (USCIS).

In his executive order, Trump wrote, “American workers compete against foreign nationals for jobs in every sector of our economy, including against millions of aliens who enter the United States to perform temporary work. Temporary workers are often accompanied by their spouses and children, many of whom also compete against American workers. Under ordinary circumstances, properly administered temporary worker programs can provide benefits to the economy. But under the extraordinary circumstances of the economic contraction resulting from the COVID-19 outbreak, certain nonimmigrant visa programs authorizing such employment pose an unusual threat to the employment of American workers.”

GROWTH IN OPT SLOWS DRAMATICALLY

Madeline Zavodny, whose 2019 study reinforced the value of the OPT program to the U.S. economy.

According to the Graduate Management Admissions Council, the association of business schools that administers the GMAT admissions test, 48% of U.S. MBA programs reported a decline in international applications for their 2019 entering classes. Total applications to MBA programs were down 9.1% for the 2019-2020 academic year; international applications fell by an even larger 13.7%. Across the top 25 programs, every one reported app declines in 2019, fueled by declining interest from foreign candidates. With coronavirus and political antagonism dampening foreign appetite for U.S. business education, those numbers are sure to worsen — at least for one cycle.

According to The Pew Research Center, citing data obtained from U.S. Immigration and Customs Enforcement through a public records request, in 2017 a record 276,500 foreign graduates received work permits under the OPT program, up from 257,100 in 2016. But growth has slowed considerably: The number of enrollees grew only by 8% in 2017, compared to 34% the previous year — the largest decline in the annual growth rate since 2004. Meanwhile, the number of student F-1 visas dropped 22% from 2016 to 2018, according to the U.S. State Department.

Trump’s executive order does not appear to pertain to individuals selected in the most recent H-1B lottery, who cannot start working in H-1B status in the U.S. until October 1. “One large group of foreign workers — and their U.S. employers — can breathe a sigh of relief: those who won this year’s H-1B lottery and who are waiting for their H-1B status to take effect on October 1,” says Rebecca Barnard, a partner in the immigration and labor and employment practices at the international law firm Dorsey & Whitney. “The vast majority of these people are not affected by the new executive order, since most people in this situation are already in the United States and will not need to travel abroad to obtain a visa.” Moreover, it’s unclear whether it affects anyone else, for now: The next round of new H-1B visa holders will not be selected until March 2021, and those individuals cannot begin work in H-1B status until October 1, 2021. Trump faces re-election in November and his loss would likely mean reversal of the executive order.

Even before the president’s order, some B-schools were using visa processing times as a pretext to decline international applications. At UNC Kenan-Flagler, despite a lengthened application calendar, the school recently announced that because of significant delays with current visa processing times for F-1 and J-1 visas, “we can no longer process applications from international candidates who require an F-1 or J-1 visa for Fall 2020 entry.”

Optional Practical Training, meanwhile, faces its own hurdles. Andrew Crain, director of experiential professional development at the University of Georgia, took to Twitter last week to expound on the already-onerous OPT system, which he called “extremely cumbersome” for international graduate students seeking work experience needed to succeed in their fields. But suspending the program entirely would be disastrous for the country, Crain says, citing statistics from NAFSA: Association of International Educators that international students contribute approximately $41 billion and adding that those students build U.S.-based businesses in large numbers after graduation, increasing job opportunities for domestic workers.

“National Foundation for American Policy research found that nearly a quarter of U.S. startups valued at $1B+ were created by former international students,” Crain writes.

PLENTY OF DATA TO SUPPORT THE VALUE OF OPT

As stated in a recent Forbes article, universities view OPT as a way for students to enhance their education in the U.S. by applying what they have learned in classes. The program also has provided a more realistic chance to gain an H-1B visa by giving students more than one opportunity to secure a spot in the annual H-1B lottery. “Students will stop seeing the United States as a destination for education,” Ravi Shankar, assistant vice provost and director of the international services office at the University of Rochester, told Michelle Hackman and Melissa Korn of The Wall Street Journal recently, adding that foreign student enrollment would likely decline if OPT opportunities are “curtailed.”

But the literature on why OPT is valuable to the U.S. economy is voluminous. In a 2018 study, Business Roundtable quantified the likely effect of a suspension of the program, concluding that “even a 35% reduction in the issuance of foreign-born student visas and a 60% decline in OPT participation could spark about a quarter of a percentage point decrease in real gross domestic product by 2028.” The cause of the decrease: “a decline in immigrant consumers and workers who would otherwise reduce hiring shortages and fill skills gaps”; a loss of 443,000 jobs over the next decade — “including 255,000 jobs held by native-born workers,” a conclusion backed by “the findings of myriad prior studies that show that foreign-born workers actually create jobs for native-born workers on aggregate, rather than displace them”; and a 17-cent decline in the average real hourly wage by 2028, “due to increased slack in the labor market and fewer productivity gains.”

“Immigration has long been an engine of growth for the United States,” BR’s report reads. “Throughout history, immigrants have strengthened the U.S. economy while enriching the country’s culture. America depends on immigrants to complement U.S. workers, open new businesses, and help the United States maintain and strengthen its competitive advantage in the global economy. Indeed, almost 44 percent of Fortune 500 companies in 2018 were founded by immigrants or their children.” Calling OPT a “key channel through which high-skilled immigrants contribute to economic growth,” which allows “eligible students and recent graduates to gain valuable work experience within their field of study,” BR called for long-term preservation of the program. “By infusing the economy with well-educated workers and entrepreneurs who attend and graduate from U.S. colleges and universities, OPT has proven to be a highly successful program with direct benefits for American businesses and consumers.”

Another much-cited study was conducted in 2019 by University of North Florida economics professor Madeline Zavodny, who found “no evidence that foreign students participating in the OPT program reduce job opportunities for U.S. workers. The relative number of foreign students approved for OPT is negatively related to various measures of the unemployment rate among U.S. STEM workers.” Zavodny also found:

  • “No evidence that foreign students participating in the OPT program reduce job opportunities for U.S. workers. Instead, the evidence suggests that U.S. employers are more likely to turn to foreign student workers when U.S. workers are scarcer”;
  • “The relative number of foreign students approved for OPT is negatively related to various measures of the unemployment rate among U.S. STEM workers. A larger number of foreign students approved for OPT, relative to the number of U.S. workers, is associated with a lower unemployment rate among those U.S. workers”;
  • “Analysis of the data show unemployment rates are lower in areas with larger numbers of foreign students doing OPT as a share of workers in STEM occupations. Comparisons at the state level likewise show a negative relationship”; and
  • “The number of foreign students approved for OPT as a share of all new graduates with STEM majors is low, ranging from less than one-half of one percent of students earning a bachelor’s degree to 13 percent of PhDs. The number of foreign students approved for OPT as a share of STEM workers is even lower.”

INTERNATIONAL STUDENT LOSS ‘CERTAINLY IS A CONCERN’

Loss of international students from disruption to OPT or H-1B “is very much is a concern,” says Karen Sedatole, interim dean of the Goizueta Business School at Emory University, a school that has seen a 6% drop-off in international students in the last three years and a nearly 11% decline in overall applications prior to the most recent, coronavirus-impacted cycle. The deferrals that Emory Goizueta has granted in the current cycle, which ends July 1, have mostly been granted to international admits, Sedatole adds, “in anticipation of some of this.”

“It certainly is a concern for us. We’d really love for international students to be able to continue their education and we will continue our part of returning international students,” she says.

Michael Crow, president of Arizona State University, which has one of the largest international student populations in the country at more than 13,000, said recently that opponents of OPT are simply anti-immigrant.

“They don’t believe the data. They don’t believe the facts,” he said. “It’s a narrow view. It’s an incomplete view about how to drive economic growth.”

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