The number of international students working in the U.S. jumped by nearly a fifth in 2017, as employers continued to take advantage of a special tax break for hiring recent foreign graduates of American colleges.
There were about 175,700 workers enrolled in a federal program known as Optional Practical Training (OPT) for the 2016-2017 school year, according to a report released Monday by the Institute for International Education. That was an increase of 19 percent over the previous year, when there were about 147,500 OPT students.
The OPT program is a supplement to the F-1 student visa category that allows foreign graduates to work in the U.S. for up to 12 months after graduation in order to gain hands-on experience in their field of study. Foreign students who major in STEM fields are eligible for a 24-month extension of OPT, meaning they can work for three years after graduation on a student visa.
A little-known provision of tax law allows employers of OPT recipients to avoid paying Social Security and Medicare taxes on the wages earned by those foreign graduates.
That payroll tax exemption, which has no direct congressional authorization, does not apply to recent American college graduates. Some conservative immigration reformers say the special tax treatment of OPT participants, who can work either part or full time, gives employers a significant incentive to hire recent foreign graduates over their U.S. citizen peers.
“These are not students at all; they are the beneficiaries of the rarely discussed Optional Training Program, run by the Department of Homeland Security, whose employers are excused from paying the usual payroll taxes if they hire a foreign grad rather than a domestic one,” wrote David North, a fellow at the Center for Immigration Studies, in a blog post Tuesday. “The employer saves 7.65 percent of its payroll by hiring the alien grad, a bizarre policy that, so far, the Trump administration has preserved, just as the Obama’s did during the prior eight years.”
Since OPT participants are in the U.S. on student visas, they are not counted as foreign guest workers like H-1B or L-1 visa holders. The number of OPTs may be even higher than the figure cited in the IIE report, because the survey did not cover all traditional American colleges or any of the non-accredited, dubious “visa mills” masquerading as institutions of higher learning.
Rising participation in the OPT program has driven the overall foreign student population to a record record high of 1.08 million, even as first-time enrollment by international students declined by about 10,000 in the 2016-2017 school year, according to the IIE report. IIE considers OPT participants to be students even if they have already completed their degree requirements.
“Much of the increase reported for the past couple of years can be attributed to more students pursuing Optional Practical Training (OPT) related to their academic fields after their degree studies, and thus remaining longer in the U.S. higher education system,” the report stated.
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