A controversial foreign labor program created by the Department of Homeland Security (DHS) and managed by U.S. Immigration and Customs Enforcement (ICE) is failing to protect U.S. workers despite a public pledge from the government that the program would include wage protections. The program, known as the Optional Practical Training program for foreign students with degrees in science, technology, engineering, or mathematics (STEM OPT), was created through regulation as a means to assist employers in evading statutory limits on foreign labor and has exploded in growth in recent years.
It can be revealed here that ICE’s Student and Exchange Visitor Program (SEVP) has been misleading the American public since the creation of the program in 2016 and has conducted no wage analysis despite a regulatory requirement to do so. The harm to U.S. workers is significant and the Biden-Harris administration has chosen to allow the harm to continue. A plan initiated under the Trump administration that would have resulted in the government meeting its regulatory requirements was eliminated by the Biden-Harris administration, along with a transparency effort that listed the top employers using the program.
This report outlines the unanticipated and rapid growth in all OPT programs, details the efforts that were made to fulfill DHS’s regulatory requirements regarding wage protections, describes some of the fraud that was uncovered during this process and what it revealed, and reviews the shocking decision of SEVP to cancel a wage unit that would have fulfilled a regulatory requirement to protect U.S. workers. This report concludes that DHS has been misleading the public and offers some suggestions on how to fix the controversial programs.
The Programs and the Numbers
Foreign students wishing to work in the United States have limited options to do so and are generally expected to leave the country upon graduation. Many attempt to change their visa status to that of an H-1B foreign worker, which has an annual cap of about 85,000 new authorizations per year. As an alternative, or as a means to remain in the United States while they apply and re-apply for H-1B, many foreign students turn to “practical training” programs offered by DHS.
There are three types of training managed by ICE’s foreign student division. The most popular is simply called Optional Practical Training (OPT), which allows aliens on foreign student visas to work for up to a year after graduation (i.e., after they have ceased being students, but for simplicity's sake they will hereafter simply be referred to as “foreign students”). There are currently 276,452 foreign students with employment authorization to work under the OPT program.
Another version is the STEM OPT program — the subject of this report — which is actually an extension of the OPT program and allows for an additional two years of work authorization (for a total of three years) for foreign students who have completed degrees in a field that meets DHS’s definition of science, technology, engineering, or mathematics. There are currently 122,101 foreign students with employment authorization to work under the STEM OPT program.
Unlike the H-1B program, which was created by Congress through statute, these administratively created programs have no annual cap.
Finally, there is Curricular Practical Training (CPT), which allows actual foreign students (i.e., those who have not yet completed their studies) to work while still enrolled in classes, prior to graduation. There are currently 140,829 foreign students with employment authorization to work under the CPT program.
Unlike the H-1B program, which was created by Congress through statute, these programs have no annual cap. In total, there are 539,382 foreign students authorized to work as of FY 2023. This rivals the total number of foreign workers in the H-1B program, for example, which has seen totals above and below this number, depending on the year. However, since STEM OPT is relatively new and has no annual cap, there is a strong possibility it will become consistently larger than the H-1B program.
In fact, when the George W. Bush administration launched an early version of the STEM OPT program (which was met with litigation over the fact that the government chose to not go through the public notice and comment process for the regulation), the government estimated that only “about 12,000 students will apply … in an average year” and called it “a significant expansion” of available workers. As the actual numbers have shown, the government’s estimate of the size of STEM OPT was a wild underestimate. In 2016, the year STEM OPT was launched by the Obama administration, there were 41,782 STEM OPT authorizations. Only three years after the launch of STEM OPT, there were 72,116 new STEM OPT authorizations during that single fiscal year.
This unanticipated rapid growth raises serious questions about the government’s ability to properly manage such a large foreign worker program. It also raises questions about the program’s impact on the U.S. labor market. ICE’s demonstrated failure to conduct wage analysis, discussed below, confirms that the OPT program is in need of significant reform.
The “Commensurate Wage” Requirement
After a court blocked DHS from launching the first version of the STEM OPT regulation, DHS was required to issue the rule through the formal public notice and comment process, which resulted in many comments from concerned stakeholders and the public. One of the main areas of concern in the comments that were submitted was the impact such a massive worker program would have on the U.S. labor market. Among the comments were those that took issue with the fact that there would not be any involvement from the Department of Labor; others argued that the program “would harm U.S. workers, especially recent graduates with STEM degrees” and that “the best interests of U.S. workers and students were not being considered by DHS”, and cited various reports and economic analyses to make their points.
The government admitted that “DHS acknowledges that this rule includes neither a quantified estimate of potential negative impacts to individual U.S. workers nor a quantified estimate of specific benefits to U.S. educational institutions or the overall economy.” Instead, the government simply took the position that its justification for the STEM OPT program “is based on the widely accepted proposition that educational and cultural exchange, a strong and competitive post-secondary education system, and a focus on STEM innovation are on the whole positive contributors to the U.S. economy and U.S. workers, and are in the national interest”.
DHS took the position that protections included in the program would prevent it from distorting the U.S. labor market.
The phrase “U.S. worker” appears in the government’s final rule a total of 175 times. DHS took the position that protections included in the program would prevent it from distorting the U.S. labor market.
Though the STEM OPT program was explicitly developed for the purpose of assisting employers in overcoming the annual caps on the H-1B program, DHS chose not to follow the H-1B program’s wage protection standard, known as the prevailing wage requirement. The Department of Labor (DOL), which Congress tasked with managing the H-1B program and many other foreign worker programs, describes the prevailing wage rate as “the average wage paid to similarly employed workers in a specific occupation in the area of intended employment”. The statutes, guidebooks, and methodology for conducting prevailing wage analysis are well-developed and managed by DOL’s Wage and Hour Division, making it very conspicuous that DHS chose not to adopt the DOL’s processes for the STEM OPT program.
Instead, DHS chose to add a requirement to the STEM OPT program that consists of an attestation by employers that the employment “will not replace a full- or part-time, temporary or permanent U.S. worker” and that the terms and conditions of the employment “including duties, hours, and compensation — are commensurate with the terms and conditions applicable to the employer’s similarly situated U.S. workers”. In the instance that an employer “does not employ and has not recently employed more than two similarly situated U.S. workers in the area of employment” the terms and conditions must be commensurate with “other similarly situated U.S. workers in the area of employment”. The term “commensurate” is not clearly defined. This attestation is included in a Training Plan that is required to accompany all employment of foreign students in the STEM OPT program.
Ultimately, there is no penalty process built into the STEM OPT program as there is for employers who violate prevailing wage and related requirements of the H-1B program, for example. Instead, an employer who falsifies information on the Training Plan form faces perjury charges. There is no evidence ICE has ever sought to prosecute a STEM OPT employer for perjury.
The program includes one, primary method for enforcing the commensurate wage requirements, which is a “site visit” by a DHS official that will generally occur after a notice to the employer 48 hours in advance. DHS explains that “the purpose of the employer site visit is for DHS to ensure that information in SEVIS concerning the STEM OPT extension is accurate (i.e., that students and employers are engaged in work-based learning experiences that are consistent with the … Training Plan … )” and that “DHS may confirm that the employer has sufficient resources and supervisory personnel to effectively maintain the program” and “may ask employers to provide the evidence they used to assess wages of similarly situated U.S. workers”. The regulation also states that “DHS will train the officials who conduct these visits so they understand what information DHS expects from employers.” However, that training apparently never occurred and SEVP was, and likely continues to be, unable to conduct evaluations of wage data in the STEM OPT program.
ICE Offers Transparency, Revealing Extensive Fraud
In 2017, as part of a transparency effort driven by the author of this report, ICE started publicly reporting the top employers using the OPT programs. This transparency allowed the public to see how many foreign students were being employed and by which employers. In fact, public comment on the STEM OPT regulation included a request from one commenter “that DHS annually publish data showing trends related to the impact of F-1 nonimmigrant students on labor markets in the United States”.
Though the effort to publish this data was driven entirely by a desire for increased transparency, there was an unanticipated outcome, which was the revelation that many of the top employers in the program were entirely phony. It turned out that thousands of foreign students who had received work permits through a practical training program were falsely reporting their whereabouts and employment into SEVIS. This was a very troubling finding and clear evidence that neither SEVP nor HSI were paying much attention to the most significant, post-9/11 database.
A transparency initiative inadvertently revealed that many of the top employers in the program were entirely phony.
These weren’t difficult-to-detect cases of the type one might expect in various immigration programs, like a marriage fraud case where the perpetrators did their best to pretend they are truly in love. Instead, it was blatant fraud involving entirely fictitious names of alleged companies that thousands of students had conspired to use simultaneously. This widespread, blatant fraud was easily detectable via simple online searches for these alleged companies, yet the fraud was not caught by SEVP or HSI and was the subject of multiple media reports. It led to the launch of an ICE investigative enforcement operation that hasn’t received any discussion since the start of the Biden-Harris administration and has likely ended.
The blatant fraud was clear evidence that the wage protection processes included in the STEM OPT program were not being carried out by ICE. Had SEVP or HSI conducted any worksite visits or audits, it would have become immediately clear that the worksites that thousands of foreign students were reporting as their place of employment didn’t actually exist. But the fact that the fraud wasn’t detected until the names of employers were posted online as part of a transparency effort made it abundantly clear that not only was ICE failing to prevent obvious fraud, the agency was also making no effort to check whether or not employers were paying the commensurate wage required by the program.
Obviously there are significant national security issues with ICE failing to detect thousands of foreign students engaged in blatant fraud, but this fraud also raises the question of what foreign students who commit this type of fraud are actually doing with their employment authorizations and how their actual and unreported employment affects the labor market.
The Biden-Harris administration stopped publicly reporting the top OPT employers, but the latest year for which information is available shows that employers include top Silicon Valley companies like Amazon, Google, and Microsoft; top financial companies like Goldman Sachs, JP Morgan Chase, and Citigroup; and a number of universities, among others. The Center for Immigration Studies can also report, based on information we have received through government sources, that a number of cities have hired foreign students through OPT. Of course, due to the lack of employer site visits to conduct wage analysis, the truth is that ICE doesn’t actually know whether foreign students who report they are working at these legitimate companies are actually working there.
Department of Labor Offers ICE Some Direction
In an effort to finally start fulfilling the regulatory requirement of protecting U.S. workers from any negative impact of the STEM OPT program, the Trump administration launched a number of meetings between Department of Labor (DOL) and SEVP officials. The DOL officials were experts who oversee the wage requirements contained in the H-1B foreign worker program. Though DHS couldn’t require DOL to conduct wage analysis in the STEM OPT program since it was created entirely by DHS with no congressional input, the DOL officials were well aware of the labor problems posed by OPT and were happy to provide some guidance.
The DOL-SEVP working group was an opportunity for ICE to learn from DOL’s best practices in providing wage analysis and proper oversight of foreign labor programs. It became clear very quickly that SEVP wasn’t collecting the necessary information to even begin conducting wage analysis. In order to conduct a comparative, prevailing-wage analysis of occupations in foreign worker programs it oversees, DOL uses Standard Occupational Classification (SOC) codes, which are codes attached to every occupation in the country. SEVP does not collect this information as part of the STEM OPT employment process.
Discussions began between SEVP and U.S. Citizenship and Immigration Services (USCIS) since it’s that DHS agency that handles the issuance of Employment Authorization Documents (EADs) associated with the STEM OPT program. One requirement of the program is that the employer is enrolled in E-Verify, which is run by USCIS, and it is USCIS that verifies that a foreign student’s chosen STEM OPT employer is using E-Verify. The idea was that USCIS would update its EAD forms to require a specific occupation for STEM OPT employment, by SOC code, so that ICE could run some analysis. Updating DHS forms is time-consuming and not as easy as it sounds, but the effort was ongoing when the Trump administration came to an end. The forms have not been updated under the Biden-Harris administration.
ICE Announces Wage Unit; Biden-Harris Shutters It
After months of work getting SEVP headed in the right direction so that it could finally fulfill its regulatory requirement that STEM OPT jobs not harm U.S. workers, ICE issued a broadcast message announcing the creation of a wage unit that would be responsible for carrying this out. In the announcement, ICE explained that it had “determined that it must take bold action” because the agency is “unable to evaluate the impact OPT has had on U.S. workers and foreign students who have obtained work authorization through the programs”. The OPT Employment Compliance Unit was to be “dedicated full-time to compliance matters involving wage, hours, and compensation” within all of the practical training programs run by ICE. The agency announced that this unit would “publish a public-facing report at least annually on its findings”, which was to “include detailed information on duties, hours, and compensation”. That report was to be published by July 31, 2021.
The unit was also going to be responsible for recommending investigations to ensure that the practical training programs “operate in a lawful manner at U.S. worksites” and, as an example, the announcement explained that “if the unit were to detect evidence that an employer is using OPT in a discriminatory manner (e.g., as a means to hire only foreign nationals, or only individuals of certain nationalities to the exclusion of others), or in a manner that negatively impacts wages, this unit may notify DOL and the U.S. Department of Justice of such evidence, where HSI is unable to address such matters, so that the evidence can be investigated further”.
Within days of the inauguration, ICE announced it was pulling the plug on a unit that would assess the wage impact of OPT on American workers.
The unit would “evaluate whether employers are adhering to the attestations and training plans” and conduct on-site visits to ensure that employment through OPT “is commensurate with the terms and conditions of employment for other similarly situated U.S. workers”.
The announcement included a number of references to the regulations that stood up the STEM OPT program, such as the underestimate of only 12,000 participants per year, and highlighted the program’s growth since then, noting that “the program’s size warrants greater oversight”. The announcement also admitted that although the regulation stated that wage “information may be available through a Freedom of Information Act (FOIA) process”, that “information is not currently compiled in a meaningful format that would lend itself to a FOIA request” and that the new unit would “take the initiative to collect and report this information online, across all OPT programs, to the greatest extent possible”.
The announcement proudly declared that “SEVP is ready to advance our regulatory pledge to protect U.S. workers and ensure that the OPT programs do not harm foreign students or the labor market.”
Shockingly, within days of President Biden and Vice President Harris being sworn into office, ICE published a broadcast message announcing that SEVP was rescinding the previous broadcast message. In a short paragraph, SEVP explained the following:
After conducting additional reviews of U.S. Immigration and Customs Enforcement’s optional practical training (OPT) compliance efforts, the program determined that it is already performing much of the work outlined in the Broadcast Message. As such, the creation of a new unit is not necessary at this time. SEVP will continue to ensure transparency into OPT data and compliance via our existing communication channels.
This announcement from SEVP was a complete rejection of everything that had been developed with the help of DOL and USCIS, and also a clear sign to many involved in that process that the program was never created with a concern about U.S. workers and that the career officials running it never had any intention of fulfilling the regulatory requirements.
More importantly, the announcement rescinding the wage unit was an admission that SEVP cannot actually produce an annual report due to the fact that it doesn’t have wage data. If it were true that, as the rescinding announcement claims, SEVP “is already performing much of the work” described in the original announcement, then it would have been easy for SEVP to simply publish a report by July 2021. Such a report could at least have announced some preliminary findings or described some of the work that was ongoing. Instead, SEVP has announced nothing about practical training wage issues since that announcement nearly four years ago.
Not only that, despite the claim in the rescinding announcement about SEVP continuing “to ensure transparency into OPT data and compliance”, SEVP actually decided to reduce transparency on practical training data, choosing to stop publishing the list of employers using the program. Starting in 2017, ICE published online the top 200 employers using the STEM and non-STEM OPT programs and the top 200 employers using the CPT program. That abruptly came to an end with the canceling of the wage unit.
When the very people who assisted in writing the regulation that created the STEM OPT program send a clear message that they don’t take the regulatory requirements seriously, it speaks volumes about the mismanagement of the OPT program as a whole. Despite the best efforts of Trump administration officials to get the program to meet regulatory requirements and create transparency, SEVP’s actions are a clear sign that the OPT program is largely unfixable and cannot be allowed to continue in its current form.
Efforts by the Center for Immigration Studies to use the FOIA process to find a rationale or justification for shuttering the wage unit in SEVP’s internal communications, and to find any actual wage analysis, have been unsuccessful. However, some e-mail exchanges between SEVP officials that occurred while Trump administration officials at ICE were working to publish the announcement of the wage unit are somewhat revealing. While reviewing a draft of the broadcast message, one SEVP official wrote to another SEVP official that they were “Trying to push back but you can format while I work the bigger picture – urgh!!” In response, the other official wrote, “Yep! We will get it ready just in case … sigh is right ☹️” Clearly, SEVP officials have little interest in protecting the U.S. worker.
Harm to U.S. Labor Market Not Limited to STEM Version of OPT
The discussion here has been focused largely on the STEM version of OPT, which is a subset of the larger, overall Optional Practical Training program. The reason for this focus is that the regulation creating STEM OPT contains provisions specifically written to address wage and labor concerns. These protections are not included in the regulations involving the regular OPT program or the CPT program. This means that of the entire population of foreign students who have obtained work authorization through one of DHS’s practical training programs — a total of 539,382 individuals as of 2023 — just over 122,000 are in STEM OPT and are required to be paid a commensurate wage. And, as established above, even that requirement isn’t being met.
But assuming that ICE were to begin fulfilling the wage and labor requirements in the STEM OPT regulation, it would still mean that the employment of the other 417,281 foreign student workers would continue to not be analyzed for labor market impacts. This is a key problem stemming from DHS developing a massive foreign worker program unilaterally without any input from Congress.
Wage analysis should be conducted for both STEM OPT and the non-STEM versions of the program. If DHS were actually concerned about the impact this controversial foreign worker program has on U.S. workers, it would analyze the impact of all parts of the program.
However, even if the government wanted to get a sense of how the non-STEM versions of practical training impact the U.S. labor market, it would likely prove to be difficult as foreign students obtain work permits through these programs without first identifying a potential employer; after the student receives the work permit, they are expected to find a job and update their SEVIS record to include the name of their non-STEM OPT employer. For STEM OPT, foreign students are required to have a job offer in advance and to list the name of their employer, as well as the employer’s E-Verify ID number in the EAD application. The non-STEM optional practical training programs would have to be reworked to ensure some level of protection for U.S. workers.
How to Fix This
The best way to address the harmful effects of the Optional Practical Training program, which includes labor impacts noted here and many national security impacts not discussed here, is for DHS to significantly tighten up the program into a smaller, more narrowly tailored training program, so that it is more manageable for DHS and less likely to be harmful to U.S. workers. Since the program was created by DHS, there is no need for congressional involvement to reshape how the program operates.
In fact, in the 2016 regulation that created STEM OPT, the government responded to public comments on negative labor market impacts with an admission that the program may have to be revised. Specifically, the government wrote: “DHS believes that the protections provided in this rule are sufficient, but the Department will continue to monitor the program and may consider revising or supplementing program requirements at a future date.”
The best way to address the problems of OPT is for DHS to make it smaller and more narrowly tailored, so that it is more manageable for DHS and less likely to be harmful to U.S. workers.
In light of the fact that STEM OPT has grown much more rapidly than the government anticipated, and the fact that the government has been unwilling and/or unable to conduct wage analysis to ensure protection of U.S. workers, a revision of the program is warranted.
The proposal developed by ICE under the Trump administration would have narrowed practical training to a one-time training stint, limited to a maximum of six months, for any foreign student wishing to receive training in their field of study. The rationale for tightening the program this way was based on a number of assumptions. First, it was determined that there is no type of job in the United States that requires training for three years (as the program currently operates) and that a sufficient amount of training could easily be conducted within six months. Second, it was determined that employment lasting six months or less would have a smaller impact on the labor market, reducing concerns about DHS’s inability to conduct wage analysis and the exemption of foreign students in the IRS tax code. In sum, OPT would be turned into the training program it is supposed to be, rather than an unlimited and rapidly growing foreign worker program that DHS doesn’t have the capacity to properly manage.
Likely, any school wishing for longer training could develop a non-paid, internship-type of training that could occur while the foreign student was still enrolled. DHS should also consider limiting OPT to educational programs where training is required of all students, both U.S. and foreign students, as a condition of graduation. Such a requirement would make it clear that the training truly is an integral part of the degree for all graduating students, rather than simply a cheap labor program only used by foreign students wishing to extend their stay in the United States.
Alternatively, DHS could scrap the practical training program altogether and defer to Congress on whether or not to expand foreign worker programs. A program created by Congress would undoubtedly include appropriate oversight, sufficient funding, and include involvement from DOL wage and labor experts. Ultimately, a change along these lines would likely result in greater transparency and better protections for U.S. workers.