Opinion guest column

Weighing in on the proposed changes to the STEM OPT Extension

Encouraging and troubling rules for international students

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Infographic by GSP legislative action subcommittee

MIT is home to a large number of international students on F-1 student visas. In the 2014-2015 academic year, 42 percent of the graduate student body was composed of international students. Most of these students apply for the Optional Practical Training (OPT) program after graduation in order to work in the U.S. in their field of study. Every international student who completes a post-secondary degree in the U.S. on an F-1 visa is eligible for 12 months of OPT. Since 2008, those who complete a degree in a STEM field have also qualified for a one-time 17-month extension of OPT. This extension, however, was recently challenged in court by the Washington Alliance of Technology Workers, and this August, the District Court for the District of Columbia vacated the STEM OPT Extension on the grounds of procedural deficiency. The court order is set to take effect in February 2016.

On Oct. 19, the Department of Homeland Security (DHS) published a proposal for “Improving and Expanding Training Opportunities for F-1 Nonimmigrant Students With STEM Degrees and Cap-Gap Relief for All Eligible F-1 Students.” The proposed rule seeks to remedy the procedural deficiencies of the original STEM OPT Extension, ensure that the extensions can continue beyond February, and make several additional changes to the rules and procedures. We applaud some of its key features but are concerned by others, and we feel that the MIT community should be informed.

The proposed rule is significantly different from the previous STEM OPT extension rules. In order to help international students understand the important changes, the Legislative Action Subcommittee (LASC) of the MIT Graduate Student Council has analyzed and summarized the changes in an infographic accompanying this article. Most importantly, the new rule would lengthen the STEM OPT extension from 17 months to 24 months. We are excited to see this change, which brings the total duration of OPT for STEM majors to three years. This should be sufficient for F-1 students to secure a great deal of practical training and make meaningful contributions to U.S. research, technology development, and product development. 

The proposed rule also specifies that a STEM extension can now be based on a previous STEM degree from an accredited U.S. institution, and the number of allowed extensions is increased to two. This provision is extremely relevant for STEM students pursuing additional higher degrees such as an M.B.A, M.D., or J.D. This recognizes their added value to the U.S. economy, as they develop interdisciplinary skills, advanced technical training, and knowledge in broader topics such as business administration and public policy.

The proposed rule contains a new requirement that each student on OPT create an individual Mentoring and Training Plan (MTP), which must be approved by the employer and presented to the university’s international student office prior to the OPT extension. The MTP must elaborate on the learning opportunity, specific goals, relevance to the STEM field, compensation, and other details. Employers must attest in the MTP that they have sufficient resources to provide training, that compensation is commensurate with U.S. workers, and that no U.S. workers are displaced because of the OPT students. The extra administrative burdens placed on employers through MTP may potentially deter employment of F-1 STEM students, which is troubling. While a formal mentoring plan is welcome, the strict attestation requirement from employers may have a serious negative effect on STEM student employment, especially by small companies that lack legal and administrative resources.

LASC is also concerned that the ability of students to make use of the STEM OPT Extension might be disrupted by upcoming court actions and delays in this rulemaking process. We commend DHS for responding quickly to recent developments, and it is important for them to continue working quickly to ensure students on STEM OPT Extensions can keep working as we approach and pass the court’s February 2016 deadline.

Overall, LASC strongly supports the OPT program and the STEM OPT Extension. We also applaud the implementation of Cap-Gap Relief for smoothing the transition between F-1 and H-1B visa status. Individual international students can submit their own letters to DHS through the Federal Register, as it may be particularly valuable that DHS receive a large volume of personalized messages from many individuals that support this important program.

The authors of this column are members of the Legislative Action Subcommittee of the Graduate Student Council, which advocates on behalf of MIT’s graduate students in Washington D.C. on issues such as immigration reform.

9 Comments
1
Vincenzo over 2 years ago

It's telling that when American workers lose their jobs to foreign workers on a work visa (such as in the case of Disney and Southern California Edison, among others), the Obama administration sits on its rump and does nothing. When foreign workers are going to lose their jobs, Obama jumps into high gear to stop it. You can see where the administration's priorities lie and why so many Americans are out of work.

2
Phillip D. Marshall over 2 years ago

Dear Vincenzo,

I totally understand your frustration. But these STEM students are not the reason of the unemployment of Americans. To protect the benefit of American citizens, most job postings require citizenship or permanent residence. To hire a foreign students, the company needs to pay more money for the visa application than Americans. The foreign employees needs to pay exactly same payroll tax, social security and medicare. These STEM students are hired due to the high demand in their field. They are not competing with American candidate for Disney and SCE. In contrast, they are contributing to the US economy and creating more jobs. Please stop attack these STEM students. I think the tolerant policy on illegal immigrants needs our attention.

Best,

Phillip

3
Vincenzo over 2 years ago

Phillip:

"To protect the benefit of American citizens, most job postings require citizenship or permanent residence."

Please cite the source on which you base this statement. I believe you are mistaken.

OPT amounts to the government offering a $10,000 incentive to employers for hiring a foreign student instead of a U.S. citizen or permanent resident. This bonus takes the form of the foreign students being exempt from payroll tax (due to their student status, which they technically still have under OPT in spite of having graduated). I would add that if OPTs duration were to be extended to three full years, as DHS wants, the employer bonanza gets multiplied by 3, so it becomes $30,000 or more. Why hire Americans, eh?

Since this tax exemption from payroll tax was pointed out in the lawsuit against DHS, and has been one of the major points raised by critics, DHS was well aware of it. Yet they are refusing to address it or even acknowledge it.

The bigger problem with OPTs and foreign workers in general is that employers hire foreign workers INSTEAD of Americans, rather than using foreign workers to replace Americans.

In contrast to DHS recent statements, in which they openly admitted that they intend OPT as an end-run around the H-1B cap, they now describe OPT in warm and fuzzy terms of "mentoring" (putting the T back into OPT). That raises several questions:

If the U.S. indeed "needs" the foreign students (DHS's phrasing on this point verges on desperation) to remedy a STEM labor shortage, why do these students need training? The DHS/industry narrative is that the U.S. lacks sufficient workers with STEM training, while the foreign workers are supposedly already trained. And, if workers with such training are indeed needed, why wont these special mentoring programs be open to Americans? Why just offer them to foreign students? Since DHS admitted that its motivation in OPT is to circumvent the H-1B cap, does that mean that if the cap were high enough to accommodate everyone, these same foreign students wouldnt need training after all?

"Please stop attack these STEM students."

Please point out to me where I attack STEM students. I don't think you'll be able to because it didn't happen.

4
LiMD about 2 years ago

Vincenzo, it seems you are very poorly informed about the OPT program and U.S. labor regulations in general. Nonimmigrant aliens must pay Federal and state income taxes like all other Americans unless their specific country has special tax treaties with the U.S. Nonimmigrant aliens are exempt from FICA/Medicare for 5 years - 4 years of college 1 year of OPT. After that if they continue to work in the U.S. they must pay FICA?Medicare like all Americans in addition to Federal and state income taxes (payroll tax for their employers). Not sure where you get this strange idea of a "$10,000 subsidy for employers".

A year or few of OPT is the least the U.S. can provide to some of its brightest and best students who collectively invest BILLIONS into the US economy each year. If "American" workers want these STEM jobs they had best start studying math and science, which I doubt most have any aptitude for.

5
Vincenzo about 2 years ago

LiMD - I suggest you do some studying. You're falling behind. I'll provide you with my sources, and therefore expect you to do the same.

From the lawfirm Buchman Ingersoll Rooney, PC: http://www.bipc.com/files/Publication/2ddaf856-1b8f-4ced-b75a-c995adad88e6/Presentation/PublicationAttachment/619108d6-d8a2-4499-a297-6af624c640bf/FICA20Payroll20Taxes20Must20Be20Withheld20From20Employees20Switching20From20F-120To20H-1B20Status.pdf

From the link:

"Employees working pursuant to F-1 OPT (as well as employees in J-1, M-1 or Q nonimmigrant status) are generally not subject to Social Security or Medicare tax withholding under the FICA."

From Senator Grassley's website (in speaking about how to make OPT more fair): http://www.grassley.senate.gov/news/news-releases/grassley-concerned-proposal-expand-employment-benefits-foreign-students-enrolled

From the link:

"7) require employers of students with OPT to pay a fee equal to the wage savings from not having to pay FICA payroll taxes for OPT workers, in order to level the playing field between OPT and American workers;"

From the Washington Times:

http://www.washingtontimes.com/news/2015/oct/16/dhs-opens-door-more-foreign-tech-workers/?page=all

From the link:

"Because those in the OPT program are still deemed students even though they have graduated businesses dont have to pay payroll taxes on their wages, creating an incentive worth thousands of dollars a year to employ them over American citizens, green card holders or those with legal work visas".

From The Washington Free Beacon: http://freebeacon.com/issues/dhs-program-incentivizes-employers-to-hire-alien-college-grads-over-native-grads/

From the link:

"Because DHS defines a recent college graduate as a student, employees and workers can escape paying payroll taxes."

6
Elizabeth about 2 years ago

https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Student-Liability-for-Social-Security-and-Medicare-Taxes

F-visas, J-visas, M-visas, Q-visas. Nonresident Alien students, scholars, professors, teachers, trainees, researchers, physicians, au pairs, summer camp workers, and other aliens temporarily present in the United States in F-1,J-1,M-1, or Q-1/Q-2 nonimmigrant status are exempt on wages paid to them for services performed within the United States as long as such services are allowed by USCIS for these nonimmigrant statuses, and such services are performed to carry out the purposes for which such visas were issued to them.

Exempt Employment includes:

On-campus student employment up to 20 hours a week (40 hrs during summer vacations).

Off-campus student employment allowed by USCIS.

Practical Training student employment on or off campus.

Employment as professor, teacher or researcher.

Employment as a physician, au pair, or summer camp worker.

Limitations on exemption:

The exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 nonimmigrant status.

The exemption does not apply to employment not allowed by USCIS or to employment not closely connected to the purpose for which the visa was issued.

The exemption does not apply to F-1,J-1,M-1, or Q-1/Q-2 nonimmigrants who change to an immigration status which is not exempt or to a special protected status.

The exemption does not apply to F-1,J-1,M-1, or Q-1/Q-2 nonimmigrants who become resident aliens.

7
Arun about 2 years ago

Vincenzo. Since you went to such lengths to prove that OPT students have caused so much grief to the economy of the United States by paying so much lesser in taxes than the average American, let me point out just one thing. Do you know the fees international students have to pay to get the degree in the first place, as compared to an American citizen? So as to save you the research, let me make it easy. It is two, sometimes three times more for the International students. Also, like Elizabeth mentioned, the fact that these international students can only work 20 hours per week (and 40 hours in summer), it shows they cannot cover this money up while studying or even in 2-3 years.

Everyone wants to earn more money, but when a huge students debt drowns that dream, only schemes such as these can bring the international students back on their feet and be able to positively impact their financial lives, after traveling to come to a different country, miles away from family.

These kids get away with Social Security and Medicare when they are on OPT, right after college, and you are cribbing about that? Really?

The US economy is NOT suffering because of the International Students Vincenzo, it is only gaining. Because we spend much much more than what they do for us. And we are fine with that, because the quality of education is what we come here for.

We already pay a lot for education here. The Federal tax applies to everyone, but we do get back the Social Security and Medicare (for two god damn years). And I think extending it to three years provides relief for students who were not able to secure H1B visas.

Being a guy who pays approximately 11 interest on the student loan I have, on a principal amount of $60,000, I welcome this decision.

And before you judge someone and spread incorrect information, I suggest you look at ALL the facts. Fairly.

8
Vincenzo about 2 years ago

Part 1 of my response to Arun:

Arun,

It appears my postings got you upset with me. I encourage you to read this posting in its entirety. After you do so, perhaps you'll see that your anger is misdirected.

You said:

"Since you went to such lengths to prove that OPT students have caused so much grief to the economy of the United States..."

Please point out to me where I claim that OPT students have caused so much grief to the economy of the United States. I don't think you'll be able to, because I never did.

You continue:

"...by paying so much lesser in taxes than the average American"

It appears you completely missed my point. My point is with the _employer_ getting away with not paying their portion of payroll taxes for its OPT workers (to better understand payroll taxes, see http://www.bizfilings.com/toolkit/sbg/tax-info/payroll-taxes/employers-responsibility-fica-payroll-taxes.aspx). My issue is NOT with the _employee_ (well, really, my issue is with the US government by knowingly and intentionally tilting the playing field against US citizens). Again, if an _EMPLOYER_ can save thousands of dollars by employing a bunch of people on the OPT program instead of US citizens, why hire US citizens?

You said:

"Do you know the fees international students have to pay to get the degree in the first place, as compared to an American citizen? So as to save you the research, let me make it easy. It is two, sometimes three times more for the International students."

This is completely off my point, but I'll entertain it anyway. This is why US universities participate in this game. They're raking in the additional fees paid by international students.

You said:

"Also, like Elizabeth mentioned, the fact that these international students can only work 20 hours per week"

Go back and re-read Elizabeth's citation. That's 20 hours for working _on-campus_, i.e., for the university at which the student is studying. For private industry, I believe it is a 40-hour work week (remember, foreign nationals who already earned their degree can participate in the OPT program. Source: http://www.uscis.gov/eir/visa-guide/f-1-opt-optional-practical-training/understanding-f-1-opt-requirements).

9
Vincenzo about 2 years ago

Last part of my response to Arun:

You said:

"Everyone wants to earn more money, but when a huge students debt drowns that dream, only schemes such as these can bring the international students back on their feet..."

Again, this is completely off my point, but I'll entertain it anyway. My answer to this is, what about all the student debt US students are drowninging in? Why is the training program not extended to US citizens as well?

You said:

"The US economy is NOT suffering because of the International Students Vincenzo"

I never claimed it is. If I'm mistaken, please point out to me where I did.

You said:

"And before you judge someone and spread incorrect information"

Please point out to me where I judged anyone and spread incorrect information.

I've been falsely accused of a number of things by a couple of commenters here, and frankly, I'm getting a little annoyed by it. Anyone with basic reading comprehension should be able to see that I'm not attacking foreign nationals working in the OPT program. To avoid further confusion, I'll be very clear:

- My issue is NOT with foreign nationals, immigrants, etc.

- My issue IS with the US government and their knowingly and intentionally tilting the playing field to the disadvantage of US citizens

I'm still hoping someone will answer the questions I posed in an earlier comment:

- If the U.S. indeed "needs" the foreign students to remedy a STEM labor shortage (as claimed by the US Department of Homeland Security, among others), why do these students need training? The DHS/industry narrative is that the U.S. lacks sufficient workers with STEM training, while the foreign workers are supposedly already trained.

- If workers with such training are indeed needed, why won't these special mentoring programs be open to Americans? Why just offer them to foreign students?

- Since the US Department of Homeland Security admitted that its motivation in OPT is to circumvent the H-1B cap, does that mean that if the cap were high enough to accommodate everyone, these same foreign students wouldn't need training after all - that they would just be hired by employers on the H-1B visa?