This report discusses DHS’s proposed rule to establish a substantial fee that schools would have to pay to let their foreign students work for up to three years under “Optional Practical Training” after they complete their courses of study, designed to reduce rampant fraud and protect American workers.
Summary
- “Optional Practical Training” allows foreign students to work in jobs directly related to their majors for up to a year — or up to three years in the case of STEM students — after they have completed their courses of study. I consider it to violate the Immigration and Nationality Act’s requirement that foreign students come here “solely for the purpose of pursuing … a course of study”.
- On October 8, DHS published a proposed rule to establish a $70,000 per foreign student fee a U.S. college or university would have to pay to recommend them for OPT, reaching a total of $100,000 for participation in STEM OPT.
- Unlike the H-1B program, OPT has no numerical limit and OPT employers generally do not have to pay the prevailing wage or even Social Security and Medicare taxes. DHS under the Bush administration created STEM OPT for the express and undisguised purpose of providing employers with an end-run around the congressionally established H-1B work visa cap.
- DHS correctly concluded that OPT has been “flooded with participants seeking to exploit the program for improper purposes”, resulting in “large-scale replacement of American workers through systemic abuse”. The proposed rule contended that the new fee would “alleviate the job market from depressed wages” and “discourage aliens from using the OPT program to market themselves to employers seeking to bypass H-1B caps, fees, and prevailing wage requirements”. The fee would “help ensure that only highly qualified … students participate”.
- While terminating OPT would better protect American workers, the proposed rule would certainly help — if its final version survives court challenge. DHS would have to demonstrate that the fee is authorized by the INA’s language providing that the admission of aliens on temporary visas “shall be for such time and under such conditions as” DHS prescribes. To do so, DHS would at the very minimum have to show that the fee was “reasonably related” to the student visa program. DHS may or may not be able to do so, for reasons I will explain.
- The proposed rule made a not so veiled threat that without the fee, DHS “cannot operate OPT consistent with its focus on preventing fraud and may shut down the program entirely”. One can interpret this in two ways. The first is as DHS’s warning to OPT stakeholders and advocates that a successful court challenge could become OPT’s death sentence, made in the hope that this realization will dissuade them from mounting such a challenge. The second is as DHS’s warning to OPT stakeholders and advocates that a successful court challenge could become OPT’s death sentence, made in the hope that they will challenge it anyway and give DHS a ready excuse to terminate OPT. I can only hope the latter interpretation is the correct one and that the Trump administration really does want to put an end to OPT.
Optional Practical Training
As the Department of Homeland Security (DHS) has described Optional Practical Training (OPT), “[It] is a form of temporary employment available to [foreign] students [on F-1 student visas] … that directly relates to a student’s major area of study in the United States. A student can apply to engage in OPT during his or her academic program … or after completing the academic program.” DHS under the George W. Bush administration promulgated a 2008 rule allowing an unlimited number of foreign “students” to remain in the U.S. after the completion of their courses of study and work for employers as computer engineers, software developers, and in other STEM (science, technology, engineering, and math) occupations for an additional 17 months after the 12 months OPT already allowed for all F-1 students regardless of degree. In 2015, the U.S. District Court for the District of Columbia vacated the 2008 rule but allowed it to stay in effect long enough for DHS to write a new rule.1 DHS under the Obama administration then promulgated a 2016 rule, further expanding STEM OPT to 24 months — thus allowing foreign “students” to work for three full years following the completion of their studies.
OPT’s safeguards for American workers are, even in theory, far less robust than those of the H-1B nonimmigrant (temporary) visa program for foreign workers in “specialty” occupations requiring the “theoretical and practical application of a body of highly specialized knowledge, and ... attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation”.
In FY 2025, at least 68 percent of approved H-1B petitions (for initial employment) were for jobs in STEM occupations. The H-1B program’s safeguards for American workers are themselves patently inadequate. Congress has twice declined to permanently increase the H-1B program’s annual numerical cap from 65,000, with the House Judiciary Committee explaining that “Congress should not imperil the future careers of … young American[ computer science students] by expanding the H-1B quota indefinitely.” Congress allowed the number of aliens who may be newly provided H-1B status to fall by 67 percent from 195,000 in FY 2003 back to 65,000 in 2004, and has not raised it since. However, § 214 of the Immigration and Nationality Act (INA) provides that the cap does not apply to aliens who will work for institutions of higher education (or related or affiliated nonprofit entities), nonprofit research organizations, or governmental research organizations, and does not apply to aliens who have earned advanced degrees from U.S. universities, “until the number of [advanced degree] aliens who are exempted from such numerical limitation during such year exceeds 20,000”.
Unlike the H-1B program, the number of foreign “students” participating in OPT has no numerical limit whatsoever and OPT employers generally do not have to pay the prevailing wage or even Social Security and Medicare taxes.
As I have written, DHS under the Bush administration created STEM OPT for the express and undisguised purpose of providing employers with an end-run around the congressionally-established H-1B cap — in order to protect employers from being “harmed” by Congress’s refusal to increase the cap. DHS acted following a request to do so by Microsoft’s head lobbyist to Secretary of Homeland Secretary Michael Chertoff at a D.C. dinner party. I am not making this up. DHS under the Obama administration expanded STEM OPT for the same reason, though it at least made an effort to mask its motivation.
Section 214 provides that the period of authorized stay in H-1B status can generally last up to six years (though aliens can stay in H-1B status indefinitely if they are the beneficiaries of applications for labor certifications or employment-based immigrant visa petitions that have been pending for at least a year). Consequently, U.S. Citizenship and Immigration Services (USCIS) has estimated that (as of September 30, 2019), a total of 583,420 aliens were authorized to work under the H-1B program.
Only 24,838 aliens with employment start dates during calendar year 2007 participated in OPT that year. But by FY 2024, U.S. Immigration and Customs Enforcement (ICE) reported that 340,066 aliens were participating in OPT and an additional 165,524 in STEM OPT, totaling 505,590. OPT now rivals the H-1B program in the number of alien workers it pumps into the U.S. labor force.
I have written that terminating OPT would serve a number of valuable purposes, the two most important being to 1) protect the wages and employment opportunities of American students and workers; and 2) end the disgraceful manner in which the Bush and Obama administrations used the OPT program to subvert the will of Congress. I have also argued that the very existence of OPT is unlawful, as it allows aliens to remain here in F-1 student status and work even after they no longer meet the F-1 visa program’s definition of “student”. Section 101 of the INA provides that an F-1 visa is for “a bona fide student qualified to pursue a full course of study” and “solely for the purpose of pursuing such a course of study” (emphasis added). Once an alien completes his or her course of study, it is beyond comprehension to claim that they are still here solely for the purpose of pursuing such a course of study.
The Trump Administration’s Proposed OPT Fee
On October 8, 2026, ICE published a proposed rule to establish a $70,000 per student fee that a U.S. college or university would have to pay in order to be able to recommend their F-1 foreign students for participation in OPT, reaching a total of $100,000 for participation in STEM OPT. The current OPT regulations at 8 C.F.R. § 214.2 provide that “[a] student must initiate the OPT application process by requesting a recommendation for OPT from his or her” school.
The proposed rule explained that ICE “would establish a fee of $70,000 per F-1 … student applicable to … schools that recommend a[] … student to engage in OPT for the first time” and a supplementary “fee of $30,000 per F-1 … student applicable to … schools that make any subsequent OPT recommendation for a[] … student who has previously participated in OPT and has previously paid the initial OPT fee of $70,000.” The $30,000 fee “would apply to any type of OPT that a … student participates in after having completed their initial OPT (regardless of whether it is another pre-completion [of studies] OPT, postcompletion OPT, or STEM OPT extension)”.
An institution’s designated school officer (DSO) would have to “confirm that the school has paid the applicable OPT fee prior to updating [the Student and Exchange Visitor Information System] SEVIS with the DSO’s recommendation and before the student can apply … for employment authorization”. SEVIS is described by ICE as a “web-based system that [DHS] uses to maintain information on Student and Exchange Visitor Program (SEVP)-certified schools, [and] F-1 and M-1 students who … attend those schools”.
What Motivates the Proposed Fee?
The proposed rule contended that the fee “would reduce the rampant fraud and abuse of OPT” with its benefits “includ[ing] strengthening the integrity of the immigration system, protecting U.S. workers, and alleviating burdens imposed on DHS tied to OPT investigations”.
Protecting American Workers
As to protecting American workers, ICE admitted at the end of President Trump’s first term that it “must take bold action to ensure that the [OPT] programs operate in a manner that does not harm U.S. workers”. The October 8 proposed rule itself concluded that “Employing foreign workers in entry-level positions at discounted rates, such as through practical training programs, undercuts American worker wages and opportunities.” I heartily agree, which is one reason why I have urged that OPT be terminated. The rule stated that the “The large-scale replacement of American workers through systemic abuse of the OPT program undermines the U.S. economy,” that the new fee would “alleviate the job market from depressed wages”, and that it is “intended to discourage aliens from using the OPT program to market themselves to employers seeking to bypass H-1B caps, fees, and prevailing wage requirements”, thus “curb[ing] the number of students and employers attempting to circumvent the H-1B visa cap and fee”. Fabulous.
But the proposed rule then stated that the fee would “ensure that … the labor market is not oversaturated with low-paid foreign workers”, “reduce an excess of low-paid foreign workers in the labor market, thereby increasing job opportunities for U.S. workers and minimizing possible wage depression” and “result in less replacement of U.S. workers”. (Emphasis added.)
Wait one New York minute! Why is any degree of saturation of our labor market with low-paid foreign workers acceptable?! Why is any supply of lower-paid foreign workers not an excess supply?! Why is any amount of wage depression of American workers acceptable?! Why is any amount of replacement of American workers acceptable?!
Terminating the OPT program and zeroing out the number of OPT participants would completely eliminate the program’s insertion of low-paid foreign workers into our economy, and completely eliminate the resulting replacement of and wage depression for American workers. Why only reduce these deleterious effects when we can eliminate them?
Curtailing Fraud
The OPT Fraud Epidemic. The proposed rule stated that:
With the increased number of F-1 … students being recommended … for OPT, SEVP has encountered more institutions, DSOs, employers, and F-1 … students engaged in schemes to exploit the current OPT regulations for fraudulent purposes.
[T]he sheer numbers of F-1 students and fraudulent cases in OPT in recent years indicate that the gates have opened too widely, permitting the program to be flooded with participants seeking to exploit the program for improper purposes.
The rule concluded that “The egregious cases of fraud and abuse of OPT demonstrate that additional action is needed to combat such problems.” ICE gave some examples, including:
[A] Chinese businesswoman was convicted for conspiracy to commit visa fraud for providing false employment documents to at least 2,693 aliens, primarily Chinese F-1 … students seeking OPT, in exchange for a fee. She founded two shell companies through which she advertised fraudulent visa-related employment and provided false offer letters and employment verification letters. Her company provided assistance to an F-1 … student who was convicted of conspiracy to act as an agent of … the People’s Republic of China (PRC).
DHS [has] announced an investigation that identified more than 10,000 F-1 … students who were engaged in OPT and were working for highly suspect employers. … [DHS found] empty buildings and false claims of employment, including ‘‘pay-to-stay’’ visa fraud with nonexistent worksites; residential addresses listed as worksites with no employees present; financial red flags … and ‘‘phantom employees’’ who never reported for work. … [M]ultiple employers [were] claiming the same address as the location of their business. … [M]any employers listed residential addresses as work sites for hundreds of foreign students, yet no employees were present.
[S]ite visits … found coordinated employer clusters, with identical websites and shared personnel, falsely denying business relationships.
The rule explained that “site visits to schools, employers, and F-1 … student employment sites are complex, multilayered, and require considerable time, resources, and coordination with other HSI [Homeland Security Investigations] components and occasionally other federal agencies”, yet “the growth rate of OPT has exponentially outpaced the number of companies that DHS is able to effectively review and investigate”. The rule quoted the finding of the Office of the Citizenship and Immigration Services Ombudsman’s “2020 Annual Report” that ‘‘There are significant indications that the OPT program is vulnerable to fraud because agency compliance resources are not scaled to (or keeping pace with) the size of the program.’’ The Ombudsman’s report also noted that “The failure of OPT designers to foresee growth in the program and to anticipate the proportionate staff resources that would be required to assure its security and integrity perhaps accounts in part for the SEVP’s inability to detect fraud among some participating students, schools and employers.”
OPT fraud also represents a serious threat to national security. The Ombudsman’s “2020 Annual Report” concluded that:
[R]isk is present in the environment surrounding the OPT and STEM OPT programs … [that] allow many [foreign] students, including graduate students in STEM, to work in academic, research or corporate environments where they may have access to technologies or other intellectual property that may be sensitive or proprietary in nature. Foreign entities like the PRC government with clearly expressed intentions to achieve economic, technical and military dominance by acquiring intellectual property and cutting-edge innovations, have succeeded in leveraging some portion of its student population to perform as [non-traditional collectors of intelligence (as I have discussed here)], while also inserting intelligence operatives into the mix of students working in the United States, often for significant periods of time. OPT, which has not been designed, staffed or administered to systemically counter such threats, is vulnerable to exploitation by foreign governments with interests adverse to those of the United States. Accordingly, there appears to be a high risk that the OPT is being used as a means for strategic adversaries to conduct espionage and technology transfer from the United States.
How Will the Fee Curtail OPT Fraud? The proposed rule contended that imposition of the fee would provide ICE with a powerful tool to curtail OPT fraud. This is first because “the financial obligation of the proposed fee, in tandem with the requirement that SEVP certified institutions provide proof of payment of this fee when submitting a recommendation for OPT … serves as a deterrent to schools, foreign students, and employers seeking to abuse OPT”. Schools “would need to consider both the costs of OPT participation and the value each F-1 … student’s OPT participation brings to the institution” and thus the fee “would ensure that only highly qualified eligible F-1 students participate in OPT”. This “would effectively eliminate students who engage in OPT as a pathway for low-paid employment or those who are trying to circumvent the H-1B visa cap and fee requirements, as they would no longer be able to obtain ‘automatic’ recommendations for OPT from their schools”.
The rule elaborated that:
[T]his proposed fee would incentivize educational institutions to exercise greater oversight and selectivity when recommending students for OPT, thereby reducing fraudulent authorizations and curbing ‘‘visa mill’’ activities. By establishing a financial obligation through a fee, this proposed rule would encourage schools to ensure that OPT opportunities provide genuine educational value that aligns with the original intent of the practical training program. … Schools would have a direct stake in the integrity of the OPT program, incentivizing them to strengthen their internal compliance and selection processes and only issue OPT recommendations to those students for whom the school will pay the required fee. The financial costs would deter schools from recommending students with questionable qualifications for OPT, leading to higher program integrity.
Further, since the fee “would incentivize schools to only recommend the most promising students to engage in OPT after a thorough review and payment of the required fee” and “the financial commitment … may encourage schools to apply a heightened level of scrutiny when reviewing an F-1 … student’s request”, “the “fee would result in a smaller pool of participants, as schools would be more selective in determining which students are qualified to participate in OPT”.
This “reduction in the pool of OPT applicants … would alleviate DHS’s resource burden tied to enforcement activities related to OPT and enable the agency to conduct more focused and efficient oversight of SEVP programs”. Further, “by streamlining operational planning and focusing resources where vulnerabilities are greatest, DHS would improve the quality and effectiveness of compliance checks, fraud detection, and enforcement actions, ultimately strengthening the integrity of the OPT program and related SEVP initiatives”.
Second, the rule noted that “DHS anticipates that schools will consider adopting internal policies and procedures that prioritize quality and compliance over quantity of participants” and this “[e]nhanced school compliance would reduce the investigative and enforcement burden on DHS, allowing limited resources to be focused on higher-priority cases” and “allow SEVP to strategically allocate resources to other programs that it administers and regulates”. Further, “This targeted approach would enable more thorough reviews of participating students and schools, while freeing up personnel to support other programs managed by SEVP.”
ICE also contended that the proposed fee would curtail rampant espionage and intellectual property theft by students from the Peoples’ Republic of China and other nations:
With fewer applicants to monitor, SEVP would be able to focus its investigative efforts on high-risk industries and sectors where OPT abuse is more likely to occur, such as technology and critical infrastructure.
T[he] streamlining and strategic allocation of DHS resources … will enable law enforcement to detect, analyze, and investigate suspicious financial transactions tied to foreign governments or threat actors that may seek to use OPT to steal US technology or advance other national security threats.
Further:
Generally, schools would need to track how they are funding the OPT fees in their financial reports and disclosures for accounting purposes. These reporting and accounting mechanisms could aid law enforcement in tracking the origin and purpose of the funds. Since the funding of OPT participation is costly and requires transparency, the OPT fee could expose attempts by foreign adversaries to subsidize these costs through targeted investments or donations to schools offering OPT to F-1 … students. For example, large or unusual financial contributions from foreign sources, especially those tied to programs that rely heavily on OPT, could serve as red flags for further investigation into fraud and national security concerns.
Will Fee Revenue Be Used to Fund ICE Anti-Fraud Investigations? The proposed rule contended that ICE should not, and indeed could not, utilize revenue from the new fee to bolster ICE anti-fraud investigations and compliance work more generally. As to the “should not”, the rule stated that “enforcement activity, such as conducting more site visits across a broader range of employers … may function less as a proactive fraud-prevention measure and more as reactive response to violations after they occur”, while “the effect of a financial commitment is nearly immediate — those seeking to abuse the program are less likely to invest in participation when faced with a tangible cost, making engagement in OPT for nefarious purposes less attractive to bad actors”. This “immediate and effective means to strengthen the integrity of OPT” provides an additional benefit to DHS — “minimal administrative burdens on the government” without a requirement that “DHS … deploy significant additional resources for enforcement or oversight”.
Thus, “[w]hile the OPT fees … [are] not specifically earmarked for … immigration enforcement activities, the collection of these fees remains essential in addressing the vulnerabilities of the OPT program” and their “deterrent nature … remains regardless”.
As to the “could not”, the proposed rule stated that “the … fees … would be deposited in the Treasury … as a miscellaneous receipt pursuant to 31 U.S.C. 3302” and then contended that “ICE would not maintain or use the funding collected … because [§ 214] does not provide legal authority for ICE to retain the funds collected.”
However, while I am certainly no expert in the intricacies of these matters, it is not immediately apparent to me why fee revenue could not be used to fund OPT anti-fraud efforts (at least to the extent that USCIS would collect the fee and reimburse ICE for its anti-fraud efforts). On August 26, 2026, USCIS published a proposed rule to “establish a $103,265 fee … for all H-1B cap-subject petitions”. The rule explained that:
The purpose of this proposed rulemaking is to generate dedicated revenue to support the costs of administering the lawful immigration system. … The new fee is designed, consistent with section 286(m) of the INA … to recover a portion of the full costs of providing immigration adjudication and naturalization services incurred by multiple Federal agencies in processing, adjudicating, and supporting the lawful immigration system, including [USCIS] … [and] … [ICE].
The rule made clear that “substantial activities … directly relate to the costs of providing immigration adjudication and naturalization services … [including] associated investigations, enforcement and vetting support”. As to these associated activities, many are carried out by ICE. The rule explained that “ICE bears significant expenses for functions that directly support the administration of the lawful immigration system. These functions include, among others, investigations and referrals related to immigration benefit fraud, [and] worksite and employer compliance activities tied to nonimmigrant employment categories.”
Consequently, the proposed H-1B fee is intended to “[d]irectly support activities related to the lawful immigration system carried out by USCIS, [U.S. Customs and Border Protection], ICE [and other agencies outside of DHS] to the extent permitted by statute and appropriations law” and “[p]rovide additional resources for USCIS to fund … fraud detection and national security vetting”. Further, “Funding some of these ICE activities with the proposed new H–1B fee would ensure that a portion of the resources needed to safeguard program integrity and support lawful use of employment-based nonimmigrant visas are funded by fee revenue associated with those programs.”
As to what is “permitted by statute”, the rule made clear that “DHS is authorized to charge fees that ensure the full recovery of the costs associated with providing immigration and naturalization services” and that “‘full costs’ in section 286(m) … necessarily includes support costs, such as … national security vetting and investigations”.
But how would USCIS deliver funds to ICE? The rule explained that:
DHS and USCIS will execute agreements with the other executive branch departments, agencies, or DHS components to reimburse them for expenses incurred in or directly related to providing immigration adjudication and naturalization services as authorized by section 286(n) of the INA … and in compliance with other laws and regulations that govern reimbursable agreements among federal agencies.
In sum, I find it hard to reconcile the position of ICE’s proposed fee rule with the position of USCIS’s proposed fee rule as to the use of fee revenue to fund anti-fraud investigations. USCIS certainly sees no impediment to sending fee revenue to ICE to reimburse it for its anti-fraud expenditures.
Would the Fee Survive Court Challenge?
ICE located its statutory authority to impose an OPT fee in § 214(a)(1) of the INA, which provides that “The admission to the United States of any alien as a nonimmigrant shall be for such time and under such conditions as the [secretary of Homeland Security] may by regulations prescribe.” The proposed rule concluded that:
In the context of F-1 [students], setting the parameters of practical training has historically been acknowledged as a valid exercise of DHS’s statutory authority stemming under the ‘‘time-and-conditions’’ provision. … [T]he requirements for the training are part of the ‘‘conditions’’ of such a status. Accordingly, DHS is authorized to regulate … the ability for F-1 … students to ‘‘engage in limited periods of employment for practical training ... according to the terms set out in the [OPT] [r]ule.’’ [Quoting the D.C. Circuit’s 2022 decision in Washington Alliance of Technology Workers v. DHS (Wash Tech).]
The rule then contended that the new fee is “reasonably related to the purpose of the visas issued.” It undoubtedly did so because of the D.C. Circuit’s decision in Wash Tech, in which the court concluded that:
Congress intended the Secretary’s time and-conditions authority to be exercised in a manner appropriate to the types of people and purposes described in each individual visa class. ... To be valid, the challenged post-graduation OPT Rule … must reasonably relate to the distinct composition and purpose of the F-1 nonimmigrant visa class.
While I have severely criticized the D.C. Circuit’s conclusion that post-graduation OPT is consistent with the INA, the rest of the court’s statement here is unobjectionable.
The D.C. Circuit also concluded that “where Congress has delegated general authority to carry out an enabling statute, an agency’s exercise of that authority ordinarily must be ‘reasonably related’ to the purposes of the legislation” (quoting the D.C. Circuit’s 2019 decision in Doe, 1 v. Fed. Election Comm’n, which in turn quoted the Supreme Court’s 1973 decision in Mourning v. Family Publications Service, Inc.). The D.C. Circuit in Doe stated more fully that:
[The Federal Election Campaign Act] empowers the [Federal Election] Commission to “prescribe[] forms and to make, amend, and repeal such rules ... as are necessary to carry out the provisions of this Act,” … and to “formulate policy with respect to” the Act. … When an agency’s “empowering provision” contains such language, the courts will sustain a regulation that is “reasonably related” to the purposes of the legislation. [Quoting Mourning, which in turn quoted the Supreme Court’s 1969 decision in Thorpe v. Hous. Auth. Of Durham.]
Is the proposed OPT fee in fact “reasonably related to the purpose of the [F-1] visas issued”? The Supreme Court explained in Mourning that:
We have … construed enabling provisions … in which Congress has stressed the agency’s power to counteract attempts to evade the purposes of a statute. In [the Court’s 1945 decision in Gemsco, Inc. v. Walling] we were asked to determine whether the Administrator of the Wage and Hour Division of the Department of Labor was empowered under the Fair Labor Standards Act of 1938 to prohibit companies from allowing or requiring their employees to do industrial homework. The Act required the Administrator to approve orders which were designed to raise the minimum wage to 40 cents an hour. While the Act did not specifically mention industrial homework, [the Act] stated that the Administrator’s orders
“shall contain such terms and conditions as the Administrator finds necessary to carry out the purposes of such orders, to prevent the circumvention or evasion thereof, and to safeguard the minimum wage rates established therein.” [Emphasis added.]
The Mourning Court then continued its discussion of Gemsco:
After hearings, the Administrator determined that homework furnished “a ready means” of evading his orders, and prohibited certain companies subject thereto from employing this means of production. The Court concluded that the Administrator had not exceeded his authority under the Act, noting that a more restrictive interpretation of the enabling provision would have rendered the Act inoperable. Focusing on the mandate [quoted above], the Court stated:
“When command is so explicit and, moreover, is reinforced by necessity in order to make it operative, nothing short of express limitation or abuse of discretion in finding that the necessity exists should undermine the action taken to execute it. When neither such limitation nor such abuse exists, but the necessity is conceded to be well founded in fact, there would seem to be an end of the matter.” [Emphasis added.]
Mourning involved the “Four Installment Rule”, a Federal Reserve Board regulation mandating that merchants disclose certain information whenever they offered credit to consumers for “which either a finance charge is or may be imposed or which pursuant to an agreement, is or may be payable in more than four installments” and promulgated pursuant to the Truth in Lending Act. That Act provided that:
The Board shall prescribe regulations to carry out the purposes of [the Act that] ... may contain such classifications, differentiations, or other provisions … for any class of transactions, as in the judgment of the Board are necessary or proper to effectuate the purposes of [the Act], to prevent circumvention or evasion thereof, or to facilitate compliance therewith.” [Emphasis added.]
The Supreme Court in Mourning concluded that:
Congress was clearly aware that merchants could evade the reporting requirements of the Act by concealing credit charges. In delegating rulemaking authority to the Board, Congress emphasized the Board’s authority to prevent such evasion. To hold that Congress did not intend the Board to take action against this type of manipulation would require us to believe that, despite this emphasis, Congress intended the obligations established by the Act to be open to evasion by subterfuges of which it was fully aware. As in Gemsco, the language of the enabling provision precludes us from accepting so narrow an interpretation of the Board’s power.
“Given that some remedial measure was authorized”, the Court then considered the question of “whether the measure chosen is reasonably related to its objectives”. It concluded that:
We see no reason to doubt the Board’s conclusion that the rule will deter creditors from engaging in the conduct which the Board sought to eliminate. The burdens imposed on creditors are not severe, when measured against the evils which are avoided. Furthermore, were it possible or financially feasible to delve into the intricacies of every credit transaction, it is clear that many creditors to whom the rule applies would be found to have charged for deferring payment, while claiming they had not. That some other remedial provision might be preferable is irrelevant. We have consistently held that where reasonable minds may differ as to which of several remedial measures should be chosen, courts should defer to the informed experience and judgment of the agency to whom Congress delegated appropriate authority.
The Court in Mourning concluded that “In light of our prior holdings and the legislative history of the Truth in Lending Act, we cannot agree with the conclusion of the Court of Appeals that the Board exceeded its statutory authority in promulgating the Four Installment Rule.”
ICE’s proposed OPT fee rule is certainly intended to prevent the OPT program from being used to circumvent or evade the H-1B visa program’s numerical cap and other protections for American workers and to facilitate compliance with the OPT program itself. Does this mean that the rule can rely on the lenient “reasonably related to the purposes of the legislation” standard? Maybe, but it is also possible that Mourning only governs situations where the authorizing statute specifically directs agencies to promulgate regulations “to prevent circumvention or evasion thereof, or to facilitate compliance therewith”.
I say this partly because the Supreme Court in Mourning stated that it was evaluating the regulation at issue in the context of the Court “hav[ing] … [previously] construed enabling provisions … in which Congress has stressed the agency’s power to counteract attempts to evade the purposes of a statute”, and it placed great import on the fact that “Congress emphasized the Board’s authority to prevent evasion.” Additionally, in its 2002 decision in Ragsdale v. Wolverine World Wide, Inc., the Court noted that “In sustaining the regulation [in Mourning] … the … rulemaking authority was much broader than the Secretary’s is here.” The Court noted that the relevant statute in Mourning “empower[ed] the Board to issue regulations not only necessary ‘to carry out the purposes of [the statute],’ but also ‘necessary or proper ... to prevent circumvention or evasion [of the statute], or to facilitate compliance therewith’”, while the relevant statute in Ragsdale merely provided that “[t]he Secretary of Labor shall prescribe such regulations as are necessary to carry out” the Act.
On the other hand, the Federal Circuit concluded in its 2007 decision in Graham Engineering Corp. v. United States that “A regulation is reasonably related to the purposes of its statute when the regulation is not inconsistent with the statute and serves to prevent circumvention of that statute.” The relevant statute in Graham stated that “Allowance of the privileges provided for in this section shall be subject to compliance with such rules and regulations as the Secretary of the Treasury shall prescribe.” The statutory text did not specify a regulatory goal of preventing circumvention or evasion or facilitating compliance. And yet, the Federal Circuit still applied the “reasonably related” standard, explaining that:
[I]n the context of regulations issued by the Department of Veterans Affairs, this court has applied the Supreme Court’s holding in Mourning to reject an invalidity challenge to a regulation promulgated by the agency pursuant to express statutory rulemaking authority. [Citing the Federal Circuit’s 2003 decision in Carpenter v. Sec'y of Veterans Affairs.]
In Carpenter, the Federal Circuit had concluded that “a regulation is reasonably related to the purposes of the legislation to which it relates if the regulation serves to prevent circumvention of the statute and is not inconsistent with the statutory provisions”. The relevant statute in that case granted the Secretary of Veterans Affairs the authority “to prescribe all rules and regulations which are necessary or appropriate to carry out the laws administered by the Department and are consistent with those laws.” Again, the statute did not specify a regulatory goal of preventing circumvention or evasion or facilitating compliance.
And, of course, the D.C. Circuit in Wash Tech applied the “reasonably related” standard to regulations promulgated under the authority of § 214 itself, which has no “to prevent circumvention or evasion thereof, or to facilitate compliance therewith” language.
In sum, it is not certain whether the “reasonably related” standard would apply to the proposed OPT fee rule. But assuming that the “reasonably related” standard would apply to the rule, is the rule in fact “reasonably related”?
One must first consider how ICE decided on the amount of the fee. The proposed rule explained that:
DHS … considered the possibility that [foreign students] could undermine the H-1B visa payment by abusing OPT. As such, DHS selected a fee amount for OPT comparable to the fee for H-1B visas that would deter visa fraud. The fee amount is designed to closely align with the H-1B fees to reduce students and employers from using OPT to circumvent the H-1B visa program fees.
This is a reference to President Trump’s September 2025 proclamation in which he found that “the unrestricted entry into the United States of certain [H-1B] foreign workers … would be detrimental to the interests of the United States because such entry would harm American workers, including by undercutting their wages”. President Trump thus directed that “[p]ursuant to section[] 212(f) … of the [INA] … the entry into the United States of aliens as [H-1B] nonimmigrants … is restricted, except for those aliens whose petitions are accompanied or supplemented by a payment of $100,000” (which I have written about here and here).
I should note that, as USCIS explains:
On June 8, 2026, the U.S. District Court for the District of Massachusetts issued an order that vacated agency guidance implementing the $100,000 payment requirement for certain H-1B petitions. … DHS … filed a motion to stay pending appeal with the United States Court of Appeals for the First Circuit. … On July 24, 2026, the First Circuit denied the government’s motion.
DHS has appealed the district court’s order and states that “If this order is later lifted, DHS still plans to collect the payment.” On September 30, 2026, another district court, the U.S. District Court for the Northern District of California, issued a similar order.
In any event, the goal of dissuading students and employers from using OPT to circumvent the $100,000 H-1B visa program entry fee (by far the largest existing H-1B fee) seems reasonable (assuming that the H-1B entry fee is no longer enjoined by the time the final OPT rule is promulgated). However, should an F-1 student who has completed his or her course of study at a U.S. college or university seek out an employer to petition for an H-1B visa for them, the employer would not have to pay the $100,000 fee. This is because the $100,000 fee is premised on § 212(f), which only grants the president the power to bar the entry into the United States of select aliens and groups of aliens. Foreign students on F-1 visas studying at U.S. schools have already entered the U.S., and thus the entry bar has become inapplicable to them. A USCIS web page in fact states that “The Proclamation applies to certain H-1B petitions filed … on behalf of beneficiaries who are outside the United States.”
Employers would have no motivation to seek out OPT students in order to circumvent the $100,000 H-1B entry fee. Thus, DHS’s rationale for selecting a fee amount of $100,000 seems misplaced. However, should USCIS’s proposed $103,265 fee for all H-1B cap-subject petitions be finalized and survive court challenge, it would provide a solid basis to justify an OPT fee of $100,000.
Putting aside the amount of the OPT fee, is it “reasonable” for ICE to charge the fee to colleges and universities rather than the students or the employers? The proposed rule, in quite an understatement, noted that “DHS understands that the proposed fees are not nominal amounts.” The rule also stated that “DHS carefully evaluated various fee options, including exemptions to the fee for small educational institutions.” DHS decided not to include such an exemption because an “estimate[d] … 56 percent of regulated SEVP-certified institutions are small entities”, and consequently “This approach could leave significant fraud vulnerabilities unaddressed.” The rule then stated that:
Of the 1,389 small affected institutions … 622 would experience an impact less than or equal to 1 percent of their estimated annual revenue as a result of the fee. … 483 would experience an impact between 1 percent and 5 percent of their estimated annual revenue, 104 would experience an impact between 5 percent and 10 percent, 82 would experience an impact between 10 percent and 20 percent, and 98 would experience an impact greater than 20 percent.
According to these figures, one half of small colleges and universities would have to pay fees constituting from 1 to over 20 percent of their total annual revenues (should their foreign students continue to utilize OPT at the same rate as at present). I can certainly envision sympathetic federal judges ruling fees having such a massive impact on the fiscal stability of schools to be unreasonable.
The proposed rule did point out that “DSOs are not required to recommend F-1 [students] for OPT and can elect not to pay the fee for a particular F-1 [student] who is not a strong candidate for OPT or whose participation in OPT could adversely affect the integrity of the program.” It also noted that “schools may mitigate their budgetary impact by passing the financial obligation of this proposed fee onto F-1 … students, all students, or employers” and that if they do so, this “would further discourage misuse of OPT by increasing the cost of participation for those whose intent is primarily to work or reside in the U.S. without legitimate academic purpose and for employers displacing U.S. workers”.
But it is not clear how most foreign students would be in a position to pay such an amount. Nor is it clear how many employers would be willing to pay the fee in the first instance, given that both the initial ($70,000) and supplemental ($30,000) fees are “not … tied to a specific employer”, but must be paid “prior to a DSO’s … recommendation of an F-1 … student to participate”. Would employers demand that schools and prospective OPT participants sign legally binding agreements providing that if granted OPT work authorization, the students would work for these employers (upon penalty of having to otherwise repay the employers)? Would courts uphold such agreements?
Given these quandaries, I can certainly envision federal judges ruling such fees to be unreasonable. If there was any way to structure the rule so that the employers of OPT participants would have to pay the fees — after all, they are the ones benefitting from the “student” labor and in the best position to pay — this would give the rule a better chance in court.
Further, the proposed rule stated that “DHS considered some alternative regulatory approaches to address the issues in OPT … such as applying STEM OPT requirements like site visits, training plans, and additional reporting to OPT more generally.” But given that the typical response of an agency with concerns about fraud is to enhance enforcement measures, federal judges might conclude that — especially as the rule estimated OPT fee revenue to be between $8.4 and $16.5 billion a year — DHS should have made a much more in-depth analysis of those alternatives.
Finally, the rule did not indicate whether DHS considered in the alternative imposing a numerical cap on OPT participants, which could 1) reduce employers’ incentive to utilize OPT labor in order to evade the H-1B cap; 2) reduce the “excess of low-paid foreign workers” generated by the OPT program; and 3) achieve DHS’s desired result of smaller program. And the rule did not indicate whether DHS considered a prevailing wage requirement, which could take away employers’ incentive to utilize OPT labor to evade the H-1B program’s prevailing wage requirement. As OPT has no specific statutory basis in the INA, DHS would not be inhibited by any statutory restrictions other than those contained in the Administrative Procedure Act (such as against actions that are arbitrary, capricious, or an abuse of discretion).
Does the Trump Administration Want to Terminate OPT?
During USCIS Director Joseph Edlow’s2 May 21, 2025, confirmation hearing before the Senate Judiciary Committee, Sen. Mike Lee (R-Utah) asked him (video beginning at 1:44:30) “what changes would you plan if confirmed to make in order to fix” OPT? Edlow responded (video beginning at 1:45:07) that “What I want to see would be essentially a regulatory and subregulatory program that would allow us to remove the ability for employment authorizations for F-1 students beyond the time that they are in school.”
The proposed rule stated that the OPT fee not only “serves as a clear signal to the public and stakeholders that the Department is taking meaningful steps to safeguard the OPT program”, but also “ensur[es] that legitimate participants continue to benefit from [OPT’s] opportunities”. Putting aside the fact that there are no legitimate participants in post-completion OPT (as it does not comport with the INA), these do not seem like the words of an agency desiring to terminate OPT.
On the other hand, the rule also stated that “DHS notes that without the fees proposed in this rule, it cannot operate OPT consistent with its focus on preventing fraud and may shut down the program entirely.”
One can interpret this not so veiled threat in two ways. The first is as DHS’s warning to OPT stakeholders and advocates that a successful court challenge could become OPT’s death sentence, made in the hope that this realization will dissuade them from mounting such a challenge. The second is as DHS’s warning to OPT stakeholders and advocates that a successful court challenge could become OPT’s death sentence, made in the hope that they will challenge it anyway and give DHS a ready excuse to terminate OPT (not that it needs one!). I can only hope the latter interpretation is the correct one and that the Trump administration really does want to put an end to OPT.
End Notes
1 Wash. Alliance of Tech. Workers v. United States Dep't of Homeland Sec., 156 F. Supp. 3d 123 (D.D.C. 2015).
2 Transparency in Punditry Statement: Joseph Edlow was a colleague of mine on the House Judiciary Committee’s Subcommittee on Immigration and Border Security and at USCIS, where he served as the deputy director for policy (running USCIS on a day-to-day basis) and I served for a time as the acting chief counsel.