The OPT Program Is In Trump’s Crosshairs; B-Schools Weigh Threat

THE HISTORY OF OPT

The Optional Practical Training program is available to eligible F-1 visa students with STEM degrees from accredited U.S. colleges or universities. The OPT program itself was launched in 1992; in 2008, Michael Chertoff, then secretary of the Department of Homeland Security, controversially extended the program by 17 months for graduates of STEM-certified programs. The extension was expanded to 24 months in 2016. Eligible business school graduates may apply for the additional two years of work on top of the initial one-year, post-completion OPT granted to all non-STEM-degree F-1 visa students; to be eligible, they must have a STEM degree from an accredited U.S. school and must secure employment with an employer that includes a minimum of 20 hours of work per week and formal training within the STEM field.

The OPT program is seen as a way for B-school grads to acquire an H-1B visa, which are limited by law. In 2017, 180,440 new H-1B visas were issued. But according to just-released data by the Institute of International Education, the policy changes allowing STEM students to remain in the U.S. on OPT opportunities for three years after the completion of their studies is the likely biggest factor driving a massive increase in students on OPT programs, which increased by 9.6% to 223,085 between 2016-2017 and 2018-2019.

In 2014, the Washington Alliance of Technology Workers sued Homeland Security, saying it exceeded its authority in both the establishment of the STEM OPT program and later extensions. WashTech’s lawsuit challenging the legality of OPT — filed because the union, which represents computer programmers, says the program hurts American tech workers — was allowed to proceed in July 2019 by the U.S. District Court for the District of Columbia. A decision on the case had been expected May 1 but was delayed until September 4.

Big Tech, including Apple, Google, Microsoft, and Facebook, granted the right to participate in the case, have argued that the OPT is a vital pathway for highly skilled international workers to put their talents to work helping the U.S. economy. The companies also stand to gain: employers who hire foreign workers are exempt from paying payroll taxes for those workers, saving them thousands on each worker annually. Ron Hira, associate professor in the Department of Political Science at Howard University, says this is one factor making the program ripe for exploitation by schools and employers.

“There are some questions about whether the OPT really should exist at all, because it was supposed to be a pilot project back in the early 90s,” Hira, who studies the program, tells Poets&Quants. “From my point of view, aside from the legal stuff, I think you can justify — from an educational standpoint — 12 months, that there’s some training and all that makes some sense. I think it’s really a huge stretch to argue that someone needs 36 months for training internships.”

CRITICISM, AND DEFENSE, OF OPT

Unhappiness with OPT — and with the federal immigration system overall — is not confined to academia and government. Reflecting the views of many that the U.S. government’s focus should be on helping U.S. workers first and foremost, one P&Q reader commented on our recent coverage that OPT is part of the acceleration of the demise of the U.S. middle class.

“With six-figure loans, an uncertain professional future, and facing a future with a diminishing middle class, most U.S. citizen and permanent-resident college grads have to compete with foreign college grads who work using the corrupt OPT program,” writes frequent commenter “CitizenOfACorruptNation.” “OPT amounts to the government offering a $10,000-per-year incentive to employers for hiring a foreign student instead of a U.S. citizen or permanent resident. This bonus takes the form of the employer being exempt from paying payroll tax for their foreign student workers (due to their student status, which they technically still have under OPT in spite of having graduated). Why hire Americans, eh?

“In 2017 alone, Amazon employed 3,655 foreign workers on OPT,” “Citizen” continues, citing U.S. Immigration and Customs Enforcement 2017 data. “Amazon’s average starting salary for ‘entry-level engineers’ is approximately $108,000. Social Security and Medicare tax rates for employers is 6.2% and 1.45%, respectively (7.65% combined).

“On one worker alone, Amazon saved $8,262/yr by preferring an OPT worker instead of an American worker ($108,000 X .0765). On all 3,655 OPT workers they hired in 2017, Amazon saved a total of $30,197,610 in one year by preferring OPT workers instead of American workers ($8,262 X 3,655). You read that right. $30 million.”

On another recent story, “Citizen” writes that if the U.S. really needs an influx of foreign students to address a labor shortage, “why do these students need training? The DHS/industry narrative is that the U.S. lacks sufficient workers with training, while the foreign workers are supposedly already trained.

“If workers with such training are indeed needed to remedy a labor shortage, why won’t these special ’employer-tax-saving’ training programs be open to Americans (you know, the ones who are denied employment because they lack the proper training that the foreign nationals supposedly have)?” Addressing the issue of retroactive STEM designation, which some schools have been doing to help their alumni stay on the U.S. longer, the commenter adds, “If the foreign nationals mentioned in this article were granted retroactive participation in the three-year STEM OPT training program (as opposed to the one-year, non-STEM OPT training program), but are then immediately approved for an H-1B, does that mean that these same foreign students wouldn’t need training after all?”

Howard’s Ron Hira says such concerns about abuse of the OPT program are not unfounded.

“It’s true that OPT workers are not required to pay payroll taxes,” he tells P&Q. “It’s also true that government has created an un-level playing field. Employers and workers each pay the 7.65% tax, so the potential savings is 15.3%. Government policy makes the OPT workers cheaper than U.S. workers. It would be incredibly naïve for anyone to believe that highly sophisticated companies like Amazon don’t know this. A firm like Amazon would be foolish not to take advantage of it. Major firms have armies of accountants to minimize their tax liability.”