New international student enrollment in US institutions is predicted to fall by over 50% in Fall 2025, with a nearly 50% reduction in students from India.
The US is likely to modify immigration rules for international students, potentially making studying and pursuing career opportunities in the US less appealing.
International students are facing a dual threat, with the US placing restrictions on their ‘stay period’ and secondly from the levy of taxes on their OPT earnings.
Foreign students on an F-1 visa have the option to join US companies under the OPT program. The Optional Practical Training (OPT) program allows foreign students in America to gain job experience, which lasts up to 12 or 24 months.
Duration of Stay
DHS proposes to amend its regulations by changing the admission period of F, J, and I aliens from ‘duration of status’ to an admission for a ‘fixed time period’. Duration of status means you may remain in the United States so long as you maintain your non-immigrant student status.
This new rule proposed by US authorities will force non-immigrants such as students holding an F-1 study visa to depart the country after a fixed period.
Admitting individuals in the F, J, and I categories for a fixed period of time will require all F, J, and I nonimmigrants who wish to remain in the United States beyond their specifically authorized admission period to apply for an extension of stay directly with USCIS or to depart the country and apply for admission with CBP at a port of entry (POE).
Once you complete your program of study and any authorized period of practical training, F students have 60 days after completion of their program to leave the United States. If you wish to extend your stay in the United States, you will have to apply to change status to another visa status like H-1B-temporary worker or O-extraordinary ability in science, art or business visa.
OPT Taxation
Senator Tom Cotton has introduced legislation titled the ‘OPT Fair Tax Act’, which requires foreign workers participating in the Optional Practical Training (OPT) program and their employers to pay FICA taxes. This bill ends the existing tax exemption employers receive for employing foreign workers and puts American workers first.
FICA taxes refer to the Social Security and Medicare taxes. Taxes under the Federal Insurance Contributions Act (FICA) are composed of the old-age, survivors, and disability insurance taxes, also known as Social Security taxes, and the hospital insurance taxes, also known as Medicare taxes.
The current Social Security tax rate is 6.2% for employers and 6.2% for employees, totaling 12.4%. The current Medicare rate is 1.45% for employers and 1.45% for employees, totaling 2.9%.
Foreign students working in the United States under the OPT program are now free from FICA taxes. If the Act is passed, overseas students will be required to pay these taxes.
Only the Social Security tax has a wage base cap. The wage base limit is the highest wage that is liable to taxation for that year. For earnings in 2025, the basic limit is $176,100. There is no wage base limit for Medicare taxes. All covered wages are subject to the Medicare tax.
The OPT Fair Tax Act would remove the exemption employers receive for FICA taxes for foreign workers participating in the OPT program. The new rules require all OPT workers and their employers to pay FICA taxes.
The bill requires employers to match contributions at the same rate as if the employee were an American citizen.
The legislation aims to amend the Internal Revenue Code of 1986 to include an optional practical
training for F-1 visa holders as employment for purposes of taxes under the Federal Insurance Contribution Act and the Social Security Act.
Also, Trump has issued a memo stating, “No more than 15% of a university’s undergraduate student population shall be participants in the Student Visa Exchange Program, and no more than 5% shall be from any one country.”
NAFSA and JB International have released new research showing that the potential 30-40 percent decline in new international student enrollment in the United States this fall could result in a 15 percent drop in overall enrollment. This drop would result in nearly $7 billion in lost revenue and more than 60,000 fewer jobs.