【Abstract】 On October 7, 2026, the U.S. Department of Homeland Security (DHS) officially announced a high-impact Notice of Proposed Rulemaking (NPRM) that would require U.S. colleges and universities to pay an unprecedented fee of $70,000 when recommending an F-1 student for an initial OPT, and $30,000 for any subsequent recommendation (including STEM OPT extensions). While universities are formally designated as the paying party, the regulatory text explicitly permits institutions to shift these costs to students or employers. Even more alarming, DHS planted a strategic rationale in the proposal, asserting that if these fees cannot be implemented, the agency may be forced to shut down the OPT program entirely. This article provides a comprehensive analysis of the fee mechanics, economic ramifications, practical traps, and legal strategies moving forward.
While recent proposals to add more than $100,000 in fees to cap-subject H-1B filings have already sparked intense debate across the immigration landscape, the October 7 announcement by DHS drops an even larger bombshell—directly targeting more than 360,000 international students and their essential pathway to post-graduation U.S. employment.
Under the NPRM, the federal government intends to fundamentally overhaul the decades-old Optional Practical Training (OPT) program by introducing extraordinary financial barriers. The proposed rule will be officially published in the Federal Register on October 8, 2026, opening a 30-day public comment period.
I. Core Fee Mechanics: How the $70,000 and $30,000 Fees Function
Under the proposed regulatory design, these substantial surcharges are hard-coded into the Designated School Official’s (DSO) authorization workflow within the SEVIS system:
- $70,000 for Initial Authorizations: The first time a university recommends an F-1 student for any form of OPT in SEVIS, the institution must pay a full $70,000 to the federal government upfront.
- $30,000 for Subsequent Authorizations: If a student has previously participated in OPT, every subsequent recommendation will incur a $30,000 charge. This directly captures the critical 24-month STEM OPT extension, as well as post-completion OPT following any pre-completion practical training.
- Triggered by Timing, Not Degree Level or Type: The fee structure is determined solely by whether the request is the student's "first" or a "subsequent" recommendation, rather than the specific nature of the training.
- Universities as Mandatory Payers and Upfront Gatekeepers: The proposed regulatory text places the statutory payment obligation squarely on SEVP-certified institutions. Before a DSO can enter an OPT recommendation in SEVIS, the institution must pay the fee in full and have it verified in the system. Without confirmed payment, USCIS is legally barred from adjudicating or issuing the Employment Authorization Document (EAD).
- Receipts Remitted to the U.S. Treasury: Because existing law prohibits DHS from retaining these fees to directly fund U.S. Immigration and Customs Enforcement (ICE) operations, all collected revenues will be deposited directly into the general fund of the U.S. Treasury.
II. Stated Motivations and Deep Economic Fallout
DHS asserts that these steep fees are necessary to curb fraud, combat sham employers, eliminate illicit "pay-to-stay" visa schemes, and force universities to exercise far stricter oversight when vetting practical training. Concurrently, the agency explicitly notes that the rule is designed to dismantle reliance on OPT as a long-term employment pipeline, limiting foreign labor inflow to protect domestic job seekers at the entry level.
If implemented, the fallout from this policy would be devastating:
- A Multi-Billion-Dollar Drain to the Treasury: Official data indicates that in 2024, approximately 194,000 students participated in standard OPT and 95,000 in STEM OPT. Based on these numbers, DHS estimates the rule could generate between $8.4 billion and $16.5 billion annually—effectively imposing a multi-billion-dollar toll on international education.
- Catastrophic Strain on Higher Education: DHS's own regulatory analysis concedes that over 56% of SEVP-certified institutions qualify as small entities with zero capacity to absorb tens of millions of dollars in upfront liabilities. This financial shock will force schools to either pass the entire cost onto students and employers or stop issuing OPT recommendations altogether, triggering an unprecedented decline in the global appeal of American universities.
- A Coordinated Pincer Movement Against Employment-Based Paths: This OPT proposal works hand-in-hand with the administration's proposed $103,265 filing surcharge on cap-subject H-1B petitions. DHS frankly admitted that establishing $70,000 and $30,000 fees on OPT is specifically meant to prevent employers from circumventing costly H-1B fees by relying on OPT and STEM OPT as cheaper multi-year substitutes.
III. High-Risk Operational Details: Traps, Cost-Shifting, and Worse Alternatives
A close reading of the proposed regulatory text reveals several rigid provisions that both students and employers must monitor carefully:
1. Pre-Completion OPT Becomes a High-Cost Trap
Many undergraduate students utilize Pre-Completion OPT for summer internships. Under this rule, doing so would be disastrous: even a two-month summer internship prior to graduation would trigger the initial $70,000 fee. When the student graduates and applies for standard Post-Completion OPT, that filing would be classified as a "subsequent recommendation," triggering an additional $30,000 charge. In practice, this would completely eliminate pre-graduation practical training.
2. Explicit Authorization to Shift Costs to Students and Employers
Recognizing that institutions cannot float these immense sums, DHS openly provides a workaround: the proposed rule explicitly permits universities to recoup the costs directly from the foreign student, bill the prospective employer, or negotiate third-party cost-sharing agreements. For corporate recruiters, hiring an international new graduate could require cutting a $30,000 to $70,000 check to an academic institution before the employee even receives their first paycheck—severely chilling international campus recruiting.
3. Employer Changes Are Exempt, but Refunds Are Virtually Nonexistent
The proposal clarifies that the fee attaches to the university’s SEVIS recommendation, not to a specific employer petition. Consequently, changing employers during an approved 12-month OPT or 24-month STEM OPT period will not trigger a new $30,000 fee. However, refund rules are exceptionally restrictive: an institution may only request a discretionary refund if the EAD has not yet been produced and the school has fully expunged the recommendation from SEVIS. Once an EAD is printed, no refunds will be granted under any circumstances, and denial of a refund cannot be appealed.
4. An Even More Aggressive Alternative: Per-Degree Re-Assessment
Beyond the primary framework, DHS has solicited formal public feedback on an alternative approach: charging the full $70,000 initial fee anew at every higher educational level. If adopted, a student would pay $70,000 after completing an undergraduate program, and another $70,000 upon finishing a master’s or doctoral degree.
IV. The Hidden Agenda: Setting the Stage to "Cancel OPT Entirely"
Why did DHS take such an extreme approach to OPT at this juncture? Beyond neutralizing OPT as an alternative to high-fee H-1Bs, the proposed rule contains a critical, calculated assertion:
"If DHS is unable to implement the fees proposed in this rule, it may be unable to continue operating the OPT program in a manner consistent with its fraud-prevention objectives, and may have to consider terminating the program altogether."
This represents a classic administrative pressure tactic. Recognizing that an exorbitant administrative surcharge resembles an unlawful tax and faces severe vulnerability in federal court, DHS has pre-emptively built an off-ramp. If the judiciary issues an injunction halting the fee collection, the executive branch intends to argue that the program is financially unviable and structurally impossible to police—using the defeat as legal and political cover to formally initiate the total termination of the OPT framework.
V. Rulemaking Timeline and the Inevitability of Judicial Review
While the proposal is aggressive, stakeholders must maintain strategic composure. Understanding the formal administrative process is critical:
- This Is Currently a Proposal (NPRM) with No Immediate Legal Effect: Following its October 8 publication, the rule enters a 30-day public comment window ending on November 9, 2026 (with a 60-day window for Paperwork Reduction Act provisions). Until DHS reviews comments and publishes a Final Rule, no fees are owed, and all current OPT application procedures, fees, and processing standards remain unchanged.
- A 60-Day Implementation Grace Period: The proposal outlines that any finalized rule would not take effect until 60 days following the publication of the Final Rule. The new fees would only apply prospectively to SEVIS recommendations generated on or after that effective date; they will not apply retroactively to students already on approved, active OPT periods. Given federal review requirements, a Final Rule is unlikely to take effect before the first half of 2027.
- Vigorous Legal Challenges and High Odds of an Injunction: Federal courts have repeatedly held that when an administrative fee drastically exceeds the operational cost of providing the service and is redirected to the U.S. Treasury, it functions as an unconstitutional tax—a power reserved exclusively to Congress. The moment a Final Rule is published, coalitions of major universities, corporate industry leaders, and civil rights organizations will immediately file federal lawsuits seeking a nationwide preliminary injunction.
VI. Recommended Next Steps
- Submit Substantive Comments on the Public Record: Universities, corporate employers, and professional associations must leverage the comment period ending November 9 to submit robust empirical evidence on Regulations.gov under Docket ID
ICEB-2026-0100. Commenters should focus on university operating budget realities, STEM talent pipeline disruptions, lack of statutory authority, and the economic harm of these charges, establishing the administrative record needed for future litigation. - Eligible Students Should File Within Normal Windows: International students currently eligible for pre-completion, post-completion, or STEM OPT should move forward under existing rules. Coordinate with your DSO and file Form I-765 as early as permitted within statutory windows to secure approval well before any regulatory shift occurs.
- Establish Multi-Pronged Legal Strategies Early: The growing unpredictability surrounding early-career nonimmigrant routes highlights the risks of relying on a single status. Qualified professionals with research publications, patents, or recognized contributions should proactively evaluate self-directed, merit-based alternatives—such as O-1A extraordinary ability visas, EB-1A green cards, and EB-2 National Interest Waivers (NIW)—to build a durable foundation in the United States.
LYD Law will continue to closely track the Federal Register proceedings, monitor industry comment submissions, and provide updates on upcoming federal litigation to ensure our clients remain fully informed and legally protected.
