The Proposed OPT Tax:
A $100,000 Barrier to Keeping U.S.-Trained Talent.

Overview of the Proposed OPT Tax

• The Trump administration is proposing to tax U.S. colleges and universities $70,000 per student just to start the OPT process, and an additional $30,000 for each future OPT filing, including the 24-month STEM extension.
• The OPT tax would price America out of the global market for top talent, especially in STEM fields, and give an advantage to every country competing with us for the same talent.
• On October 8th, 2026, the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) published a Notice of Proposed Rulemaking (NPRM) titled “Optional Practical Training Fees.”
  • This is only a proposal—there has been no change to OPT filing fees at this time.
  • This would be a new tax, paid by universities before they recommend a student for OPT. After the tax is paid and the recommendation is submitted, students would still have to pay the $470 fee when applying for OPT work authorization online ($520 if by paper).
  • DHS suggests that the cost could be passed on to students seeking OPT, employers, or even all students through higher tuition and fees—but does not explain how this would be handled.
• The OPT tax would be cost-prohibitive and would make U.S. education much less desirable for international students.
  • Many highly educated graduates of U.S. schools would not be able to secure post-graduation work authorization and would instead contribute their skills in other countries, many of which are our global competitors.
  • Future international student enrollment would decline, a change that would hurt American students and workers.
  • Shrinking OPT is a central objective of the proposal and a step toward eliminating OPT as a viable bridge between a U.S. education and the skilled workforce.
• Revenue from the tax, which DHS estimates could reach $12.8 billion annually, would go directly to the Treasury. None of the funds would be used to administer or strengthen OPT.
  • We call the fee a tax because it would raise general revenue, which is Congress’s domain, not DHS’s. The same is true of the recently proposed $103,265 tax on H-1B petitions.
  • DHS would likely raise far less, because OPT participation would plummet.
• The 30-day public comment period closes on November 9, 2026. We strongly encourage business leaders, higher education institutions, and other members of the public to submit comments opposing the rule.

The OPT Tax Is Designed to Further Restrict the Program, Setting Up Its Elimination

DHS says that the tax would prevent fraud and abuse, but the rule itself names the underlying goal: a “reduction in the pool of OPT applicants.” That is another step toward restricting and ultimately ending the program.

DHS argues that the high cost of the tax would ensure that only highly talented and qualified individuals are selected for OPT because whoever pays the tax would have a stake in the program. But a “pay-to-play” approach limits the applicant pool by ability to pay, not merit, whether the payer is the university, student, or employer.

The “pay-to-play” approach would not prevent fraud and abuse—it would only raise the upfront price.

DHS states three times that if the tax is not finalized, it “may shut down the program entirely.” This threat matters because the proposal is legally vulnerable. If a court blocks it, DHS has already laid out a pretext for the more drastic step of ending OPT altogether.

Congress Should Protect and Expand Pathways for International Graduates

To protect America’s edge in the global race for talent, especially in STEM and cutting-edge industries, the U.S. should expand opportunities for international students and graduates, not restrict them. DHS’s proposal to severely limit OPT by imposing high financial barriers would hurt the U.S. economy and undermine one of America’s greatest competitive advantages: our ability to attract the world’s most promising talent.

Instead, Congress should protect OPT — one of the f ewpathways for international students to work in the U.S. after graduation. The Keep Innovators in America Act, introduced earlier this year, would codify the OPT program in statute. This bipartisan bill is a good first step to protecting America’s talent pipeline.

Protecting OPT is an important but imperfect step toward retaining international graduates. Congress should also establish dedicated green card pathways for them, H-1B cap exemptions for advanced degree holders, “dual-intent” visas allowing students to enter on a temporary basis even if they plan to remain in the U.S., and an entrepreneur visa. Straightforward reforms, such as eliminating per-country caps, recapturing unused visas, ensuring that children and dependents are not harmed by delays in processing and backlogs, and allowing spouses of workers to work, would further expand opportunities for new immigrants and maximize the benefits of immigration for all Americans.