OPT: Gateway to Cheap Labor Dependence

Americans need to know about a couple of little-known programs that allow foreign students on F-1 visas to get tax-free jobs. They’re “little known” to Americans being injured by the programs, but not to the businesses and F-1s exploiting the windfall.

The U.S. Department of Homeland Security (DHS) website boasts: “The United States allows eligible international students and new graduates the opportunity to gain on-the-job-learning that supplements knowledge gained in their academic studies.”

And since foreign students enter the U.S. under the F-1 visa, which is designated as a “nonimmigrant” visa, those working on F-1 status are exempt from paying FICA (Medicare and Social Security) taxes because of their nonimmigrant status. Businesses hiring them also get the tax break.

Foreign students on F-1 visas are eligible for tax-free jobs as follows:

  1. Curricular Practical Training (CPT) working 20 hours per week while enrolled in classes
  2. Optional Practical Training (OPT) working full-time for 12 months after graduating
  3. OPT STEM extension for an additional 24 months for STEM graduates, so long as the job fits in to one of the categories on the widely inclusive nine-page list (including Urban Forestry, Livestock Management, HVAC Technician and Welding Technician)
  4. Another 24-month STEM extension if the F-1 visa holder earns “a second qualifying degree at a higher education level” and is “participating in an initial period of OPT at the time they apply to USCIS for their second STEM OPT extension.”

Neither the employer nor the F-1 pays FICA taxes, which means they each pocket half of the 15.3 percent savings. It also means our Medicare and Social Security funds are being short changed.

It’s great for both the F-1 and the F-1’s employer. F-1s are cheaper to employ, so they’re more attractive to the employer. And F-1s can accept lower wages and still come out ahead of, or equal to, their American colleagues.

For American college students and graduates, however, these programs represent nothing but loss. Citizens are being discriminated against because they can’t avail themselves of these tax-free jobs, resulting in myriad effects.

These insidious programs – aided by their stealth nature – are sending subliminal messages to our kids of all backgrounds: “You’re not good enough or smart enough, especially in the STEM fields,” and “Foreign kids are smarter.” The reality, however, is that our government is giving F-1 visa holders a leg up … a foot in the door … a head start. Why? Corporations want cheap labor, and Congress hasn’t been forced to answer to Americans. Leaders won’t stand up for American grads to say “No” to greedy corporations and colleges.

No analogy captures the full scope of the damage F-1 OPT is doing to America.

The monetary discrimination and the subliminal messaging are bad enough. But because F-1s are 15.3 percent cheaper to employ, companies hire them, thereby giving the F-1 much-sought-after training and experience.

Tax-Free Jobs for Foreign Students Push American Grads to the Back of the Bus

Since they get that on-the-job training, their employers are likely to offer them full-time jobs (by applying for their H-1B visas), once again leaving American graduates out of the training-to-jobs process.

Critics contend that businesses use OPT for the cheap labor, just as they use the better-known H-1B guest worker program.

Companies start out grooming low-wage workers while they’re on F-1 visas. Then, the same companies turn around and say they need foreign workers because Americans don’t have the skills they need – when those companies are responsible for excluding Americansfrom the training and the jobs.

OPTs are foreign workers getting tax-free training, while still on F-1 “student” visas.

In this “try-before-you-buy” arrangement, American businesses then apply for the workers’ H-1B visas, with an understanding that the workers will continue working at a lower wage in exchange for the H-1B, then the hope of a future Green Card and then citizenship. So much for the “nonimmigrant” part.

Congress needs to enact a “truth in labeling” requirement for laws and programs, so that labels can’t be used to keep impacted citizens in the dark.

Created without Congressional approval, OPT began when the Department of Justice promulgated the regulations authorizing OPT work, without any public notice or comment period.

OPT is at once both the gateway AND the drug: It is the path to H-1B employment for foreign workers AND the employment itself.

So it’s no wonder that use of OPT has increased by 400 percent and has actually surpassed the number of H-1B visas issued yearly for the last several years. According to the PEW Research Center, for the period 2004 to 2016, there were a total of 1,474,000 approvals of OPT compared with 1,473,000 initial H-1B visa approvals for the same period.

No Limit, No Restrictions

Because there is no limit to the number of OPT work permits that can be issued, OPT has become more of a threat than H-1B. The director of Bright Future Jobs in Chicago and American STEM advocate Donna Conroy says staffing companies hire large numbers of foreign OPTs, then “farm them out to tech firms all over the country.” H-1B limits guest workers to the position described on their application and requires companies to pay to sponsor them before they start working, making it difficult for them to switch jobs. OPT does not.

Both programs, says Conroy, “are used to block qualified Americans and hire only foreign applicants.”

But OPT’s attractiveness as an end-run around H-1B limits has caused a surge of “visa mills,” or substandard and often unaccredited institutions that issue high numbers of OPT work permits, according to a report by the Center for Immigration Studies. One visa mill, Stratford University in Virginia, issued more OPT STEM extensions than all Ivy League schools combined over the same period.

Some colleges have even altered schedules so that alien students can stay in status while going to class only once every four weeks or so. Swamy is an F-1 OPT who has failed to be chosen for the H-1B lottery for five years, so he has continued working on F-1 OPT extensions full time for five years. F-1 OPT attracts those “more interested in working in the U.S. than receiving the education,” according to an article in Quartz.

The University of Cumberlands, in Kentucky, offers F-1 programs that allow F-1 students to take classes anywhere in the U.S. and come to the campus on just one weekend per semester, all while working in the U.S. from the first day of the program.

There is no reason for America to allow tax-free training of foreign students who take American jobs. If foreign students graduating from American colleges truly are talented, they have the ability to obtain an H-1B visa. If not qualified to obtain the H-1B, perhaps they should leave the country.

At least one U.S. Congressman is seeking to change F-1 OPT. Sen. Chuck Grassley sent a letter to Department of Homeland Security Secretary Kirstjen Nielsen nearly a year ago, asking questions and highlighting the many abuses of OPT that cost “American workers millions of dollars in lost taxes and employment opportunities,” as well as “raise national security concerns.”

Experts believe the financial cost alone is billions of dollars, but the cost to American students and graduates is immeasurable.

American citizens need the jobs being given to F-1 workers.

Congress has recognized the huge student debt burden that American college grads face, often preventing them from pursuing a desired career path, starting a business, starting a family or just moving into their own residence.

Several democratic lawmakers have recently cosponsored the Debt-Free College Act to purportedly end the student loan debt crisis, without a word about the “job debt” crisis Americans are facing because of foreign labor programs like OPT and H-1B. Let’s hope they amend the proposed bill to ensure it is only for American citizens or legal permanent residents.

F-1 OPT was created under the George W. Bush administration, expanded by the Obama administration and has continued growing under the Trump administration, so there’s plenty of bipartisan blame to go around. The question, perhaps for presidential candidates, is who will stop it.

This isn’t a blue problem or a red problem; it is an American problem, and Americans who care about the country and the future for its citizens should write and call their Congress members until these programs discriminating against America’s youth are ended.

The least we can do is give American kids the home court advantage.