Trump’s new H-1B fee could make it harder for foreign students to stay in US after graduation

The Trump administration is proposing a $103,265 fee on employers filing cap-subject H-1B petitions, expanding the financial burden beyond foreign workers hired from outside the United States to people already in the country on student and other temporary visas.

The fee, proposed by the Department of Homeland Security, would apply to all H-1B petitions subject to the annual statutory cap. This includes petitions for foreign students in the US who are selected in the H-1B lottery and seek to move from student status to work status after graduation.

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It would also apply to applicants eligible for the separate 20,000 H-1B allocation for those with qualifying US master’s or higher degrees.

The proposal does not mean that every foreign student or temporary visa holder in the US would automatically have to pay the amount. The payment would be made by the employer filing a cap-subject H-1B petition. But the additional cost could make employers more cautious about hiring foreign graduates and other workers already in the country.

How the new proposal differs from the $100,000 fee

The proposed fee is different from President Donald Trump’s earlier $100,000 H-1B payment announced last year.

That payment was linked to the entry of certain H-1B workers hired from outside the US. Because it relied on presidential authority to restrict entry, it did not cover recent college graduates or other foreign nationals already in the country who were approved for H-1B status.

The new proposal would be imposed through immigration fee regulations and would be attached to the H-1B petition itself. As a result, it could cover a foreign student who entered the US legally on an F-1 visa, completed a degree and was later selected in the H-1B lottery.

The same could apply to other foreign nationals already in the US on a temporary visa if their employer files a cap-subject H-1B petition for them.

Universities and research institutions spared

The proposed fee would not apply to cap-exempt H-1B petitions. These include jobs at universities, affiliated nonprofit institutions, nonprofit research organisations and government research organisations.

This marks a difference from the earlier $100,000 entry payment, which had also covered new H-1B hires by universities, hospitals and research-based institutions.

The H-1B programme is limited to 85,000 new visa slots each year. This includes 65,000 places under the regular cap and 20,000 places reserved for applicants with qualifying US advanced degrees. Demand has historically exceeded the number of available slots.

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Renewals generally not covered

The proposed $103,265 fee would generally not apply to extensions or job-change petitions for H-1B workers who have already been counted against the annual cap, subject to existing eligibility rules.

The proposal is focused on new, cap-subject H-1B petitions. The key issue is whether the petition falls under the annual cap, rather than whether the worker is physically inside or outside the US.

Earlier fee blocked by court

A federal judge in Boston vacated the earlier $100,000 entry payment, ruling that it imposed an unlawful tax without sufficient delegation from Congress. The Trump administration appealed, but the US Court of Appeals for the First Circuit denied its emergency request to block the ruling.

DHS said the new fee would help recover the federal government’s costs of administering the immigration system. The money would support activities including benefit adjudication, fraud detection, national security vetting and technology modernisation.

The agency expects the fee to generate about $8.8 billion a year from 85,000 cap-subject petitions. The proposed rule says the payment “would serve as a dedicated revenue mechanism to help recover a portion of the federal government’s costs of administering the lawful immigration system.”

DHS is also reportedly considering a separate $100,000 charge for foreign students who take part in Optional Practical Training, a post-graduate work programme for F-1 visa holders.

The H-1B fee is still only a proposal. It must go through a public comment process before DHS can issue a final rule.