A new proposed law in the United States could eliminate payroll tax exemptions for international students working on the Optional Practical Training (OPT) program, intensifying political pressure on the post-study work route central to US international student recruitment.
The OPT Fair Tax Act, introduced by Republican senator Tom Cotton, would remove the current exemption preventing OPT participants from paying Federal Insurance Contributions Act (FICA) taxes — which fund Social Security and Medicare — despite most not being eligible for those benefits.
“Our tax code shouldn’t incentivise businesses to hire foreign workers. By ending the FICA tax exemption, we will put American workers first,”
— Senator Tom Cotton
If passed, the bill would require OPT participants and their employers to pay the full 15.3% FICA payroll tax, split evenly, significantly lowering take-home pay for international graduates and raising hiring costs for employers.
💼 Economic Debate: Cost Advantage vs Fair Access
According to Chris Glass, professor at Boston College, the exemption currently provides an 8% hiring cost advantage to international graduates, but exists because most cannot claim Social Security benefits later.
“The competitive distortion is real, but so is the rationale,”
— Chris Glass
🏛️ Political Pressure on OPT Intensifies
The proposal arrives amid wider conservative efforts to restrict or end OPT. Recently appointed USCIS director Joseph Edlow has previously vowed to abolish the program, while senator Chuck Grassley and others have pressed the Department of Homeland Security (DHS) to scrap it.
However, experts say sweeping changes are more likely via regulation than Congress.
“Since OPT was created by regulation, DHS has authority to modify it without legislation,”
— Glass
📊 New Data Highlights OPT’s Significance
A newly launched OPT Observatory offers the first institution-level map of OPT outcomes, showing where graduates work and which states retain them — data advocates hope will temper political rhetoric.
Evidence on OPT’s impact remains mixed — studies show both job creation in STEM fields and localised pressure on entry-level markets.
Meanwhile, eliminating OPT could trigger major disruption:
- 240,000+ students currently on OPT would face immediate uncertainty
- Over half of current students say they would not have chosen the US without OPT (NAFSA)
Glass warned a rollback could threaten future enrolment:
Eliminating or significantly restricting OPT would “strain the 2026/27 enrolment cycle.”
⚠️ Visa Climate Tightens Further
The OPT spotlight follows major changes to the H-1B skilled worker visa, including:
- Selection reforms favouring higher-paid roles
- A new $100,000 fee for certain overseas filings
Together, the measures contribute to a more fragile post-study immigration landscape for international talent.
0 Comments