Multiple bills are now targeting Optional Practical Training, which permits foreign graduates to work in the US, potentially closing the opportunity for F-1 visa holders to enter the American workforce.
International students looking to study in the US are facing rough weather. The Trump administration has been taking several steps to limit the flow of foreign students taking admission in US universities.
Several lawmakers have introduced different bills to end OPT, significant among them are the DIGNITY Act, HIRE Act and the PAUSE Act. At the same time, the ‘Keep Innovators in America Act’ proposes to continue with the OPT program and aims for codification of the OPT Act.
Arguments against the OPT Program
One of the major arguments against overseas students on an F-1 study visa is that they end up staying in the US after their studies and get hired by US firms at low cost, replacing the American workforce. This is made possible under the Optional Practical Training program that allows student visa-holders to work in the U.S. for up to 12 months after finishing their degree, while STEM graduates are allowed an additional 24-month extension.
Subsequently, the F-1 visa holders transition into the US labor market via H-1B visas and pursue green cards for lawful settlement in America.
What makes the case stronger for the critics is that this OPT program lacks congressional approval and was introduced through an executive order.
US lawmakers have introduced several key bills proposing either major modifications or termination of the OPT program. Even the latest update from the Department of Homeland Security suggests that there are significant changes to the OPT program that could be introduced soon.
DIGNITY ACT
US lawmakers have proposed taxing international students’ earnings from the Optional Practical Training (OPT) program. Foreign students in the US working for American firms under the OPT program are currently exempt from Social Security and Medicare taxes.
The Dignity Act has been introduced, which proposes to tax the earnings of the OPT students by making them pay FICA (Social Security and Medicare) taxes. If the proposed Dignity Act is enacted, OPT students who are working in the US will be obligated to pay FICA taxes.
The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total.
Currently, foreign students working as part of the OPT program in the United States are exempt from paying FICA taxes. If the Act is passed, foreign students will have to pay these taxes.
Only the Social Security tax has a wage base limit. The wage base limit is the maximum wage that’s subject to the tax for that year. For earnings in 2025, this base limit is $176,100. There’s no wage base limit for Medicare tax. All covered wages are subject to Medicare tax.
The HIRE ACT
The HIRE ACT proposes to levy a 25% tax on outsourcing payments, defined as any money paid by a U.S. company or taxpayer to a foreign person whose work benefits consumers in the United States.
Additionally, the US firms will not be allowed to take a tax benefit out of this payment. HIRE ACT states that no deduction will be allowed for any outsourcing payment.
Effectively, all US companies outsourcing business operations to foreign companies or employing foreign workers will be impacted. A 25% tax will apply to the money that US businesses pay foreign outsourcing corporations to provide services to US consumers.
PAUSE Act
Chip Roy’s PAUSE Act seeks to freeze all immigration to the U.S., proposing the elimination of the Optional Practical Training (OPT) program and changes to the H-1B visa program, specifically removing its ‘adjustment of status’ provision. The Act requires that specific criteria be met to allow immigration.
Keep Innovators in America Act
Amidst the wave of criticism against the OPT program and the demand to end it, a few US lawmakers introduced the bipartisan ‘Keep Innovators in America’ Act to protect the Optional Practical Training (OPT) program for international students, especially benefiting Indian graduates.
Representatives Sam Liccardo, Jay Obernolte, and Raja Krishnamoorthi aim to codify OPT into law, ensuring stability for students, universities, and employers amid global competition for skilled talent. The act supports international students seeking education and work experience in the U.S.