DHS Delays Updating USCIS’s Fee Schedule, Exacerbating the Agency’s Financial Woes

By Elizabeth Jacobs on August 21, 2023

Following a proposal published in January 2023 to raise fees charged by U.S. Citizenship and Immigration Services (USCIS), DHS recently indicated that it is not planning to finalize the rule until March 2024, leaving the agency to languish longer with inadequate funding. The postponement of a final fee rule suggests USCIS may be altering its fee schedule in light of criticism it has received from the public on its plan to disproportionately increase fees for employers and other non-humanitarian categories, but suppress fees elsewhere across the immigration system. In 2020, USCIS reported that the agency will lose approximately $1 billion annually until it implements a new fee rule because of rising costs of operations.

USCIS is required to engage in a periodic review and update the fees associated with the services it provides in order to remain solvent. USCIS operations include adjudicating immigration benefit requests, including those that are provided to beneficiaries without charge, such as asylum; verifying work authorization; providing certain civic integration services; and detecting fraud and national security threats. Currently, approximately 95 percent of these operations are fee-funded, with just a few programs paid for by congressional appropriations (i.e., taxpayers).

USCIS last adjusted its fee schedule in 2016. The agency did, however, finalize an updated fee schedule in 2020 following its fiscal year 2019/2020 review. At that time, DHS sought to increase USCIS’s fees by a weighted average of 20 percent, which was slightly less than the average weighted increase imposed by the 2016 rule issued under the Obama administration (21 percent). The 2020 fee rule was scheduled to go into effect on October 2, 2020, but was enjoined by a federal district court and, consequently, never implemented by either the Trump or Biden administrations.

The Biden Administration’s January 2023 Fee Proposal. The Biden administration’s 2023 proposal is intended to replace the 2020 fee rule entirely — though it retains many changes included in 2020 rule to the proposed fee schedule. Typically, USCIS’s fee schedule is designed to ensure that the fees collected for these services accurately reflect the cost of processing and adjudicating those applications or petitions. Rather than increasing fees proportionally across the immigration system to cover these costs, however, the Biden administration’s January 2023 proposal instead adopted an “ability to pay” fee model (as opposed to a “beneficiary pays” model, where beneficiaries pay for the actual cost of their services) to transfer the cost of its growing humanitarian docket to U.S. employers while suppressing fee increases for many other case types, including naturalizations, in order to align itself with the administration’s political priorities.

For example, the 2023 proposed rule will require employers hiring high-skilled foreign workers 70 percent more for beneficiaries on H-1B petitions, 201 percent more for employees on L-1 petitions, and 129 percent more for aliens on O-1 petitions. (H-1B petitions increase from $460 to $780; L-1 petitions increase from $460 to $1,385; and O-1 petitions increase from $460 to $1,055.)

Conversely, DHS proposed to suppress fee increases for numerous benefits at levels below what is required to cover cost of adjudication. DHS proposed increasing fees by just 18 percent for services including Form N-400, Application for Naturalization; Form I-192, Application for Advance Permission to Enter as Nonimmigrant; Form I-193, Application for Waiver of Passport and/or Visa; Form I-929, Petition for Qualifying Family Member of a U-1 Nonimmigrant; and many other form types. (Naturalization applications will increase from $640 to $760; applications for advance permission to enter as a nonimmigrant will increase from $930 to $1,100; applications for a waiver of passport and/or visa will increase from $585 to $695; and qualifying relative petitions for U visa holders will increase from $230 to $270.)

The Biden administration’s proposal would also, for the first time, impose a separate and additional “Asylum Program Fee” to employers who petition for alien workers. Specifically, the proposed fee schedule would require employers who file either a Form I-129, Petition for Nonimmigrant Worker, or Form I-140, Immigrant Petition for Alien Worker, to pay an extra $600 every time either form is filed in order to fund the Biden administration’s new asylum procedures created by a March 2022 interim final rule.

While the Center agrees that employers who seek to hire foreign workers to fill labor shortages should incur higher costs than they would normally incur by hiring U.S. workers, these costs should generally come in the form of higher pay for both U.S. and foreign workers. Requiring U.S. employers (who have no connection to USCIS’s asylum program) to subsidize the Biden administration’s failing border policies both enables otherwise unsustainable policy decisions while simultaneously limiting U.S. businesses’ ability to hire foreign workers, impacting smaller businesses the hardest.

Finally, the 2023 proposal also retained the broad 2016 fee waiver policy, which allows many applicants to obtain immigration services for free if they demonstrate an inability to pay. This approach abandoned the fee waiver reforms included in the 2020 final rule, which restricted fee waiver eligibility only where statutorily required or otherwise appropriate given the nature of the immigration benefit sought, including considering whether such beneficiaries are subject to the public charge ground of inadmissibility. According to estimates provided by USCIS in 2019, this proposal would have equitably reduced the burden on fee-paying applicants and petitioners by saving the agency approximately $532 million dollars in forgone revenue, resulting in a weighted average fee increase over 10 percent higher than proposed for that fee schedule.

Fee-paying applicants and petitioners must cover the costs of fee waivers and fee exemptions for services USCIS provides. In recent years, USCIS has transferred significant costs to fee-paying applicants and beneficiaries as a result of an overbroad fee waiver policy, and estimated foregone revenue has increased significantly. USCIS reported forgoing $191 million in revenue in its FY 2010/2011 fee review, $613 million in revenue in its FY 2016/17 fee review, and an astounding $1.494 billion in its FY 2019/2020 fee review. In DHS’s 2023 proposed rule, the department did not report how much revenue USCIS anticipates to forgo as a result of fee waiver projections.

USCIS’s Serious Financial Challenges. The Biden administration’s decision to delay finalizing a new fee rule will only exacerbate USCIS’s financial troubles. USCIS has been open about how it cannot maintain adequate service levels with its current level of resources without lasting impacts on operations.

Indeed, in the time since the 2016 fee rule was published, USCIS has endured historical financial challenges that have threatened the agency’s ability to conduct operations and efficiently adjudicate immigration benefits — but many of these strains have been self-inflicted. First, fear and travel restrictions related to the Covid-19 pandemic in 2020 severely stunted USCIS’s ability to collect fees to maintain efficient operations. Additionally and importantly, however, the USCIS Ombudsman confirmed in its 2023 report to Congress that the Biden administration’s creation of numerous unauthorized parole programs, as well as its historic expansion of Temporary Protected Status (TPS) and issuance of restrictive enforcement policies, have severely impacted the agency’s ability to efficiently administer lawful immigration programs. The Ombudsman’s report also confirmed that the mass migration crisis on the Southern border has (unsurprisingly) caused serious resource strains to USCIS, which is tasked with conducting credible fear screenings for aliens placed in expedited removal. (The credible fear process is currently not funded by appropriations or application fees.)

As a result of these policies, USCIS has experienced historic processing times for nearly all of its portfolios. Until the agency is able to finalize a new fee schedule, it must continue to pay for current expenses based on calculations made almost a decade ago.