OPT and STEM OPT in Peril: Indian Students Face New H-1B Rules

(UNITED STATES) A sweeping fee shock tied to the H-1B program has sent fresh waves of worry through Indian student communities on OPT and STEM OPT across the United States, with employers facing a new $100,000 surcharge on each new H-1B petition effective September 21, 2025, according to current policy announcements. While the annual cap of 65,000 H-1B visas plus 20,000 for U.S. master’s and doctoral graduates remains unchanged, the cost spike—paired with active discussion of a wage-based lottery—has turned a well-known path from F-1 student status to skilled employment into a far steeper climb.

Lawsuits are already in motion to challenge the fee, and until courts or agencies act, students and employers are bracing for disruption to hiring cycles that traditionally depend on OPT to bridge graduates into H-1B roles.

How OPT and STEM OPT have worked — and what’s changed

For years, Indian students used OPT (up to 12 months of post-completion work authorization) plus STEM OPT (an additional 24 months for eligible STEM graduates) to build experience and align with the spring H-1B filing season. Employers would often file H-1B petitions while students continued working under OPT.

That calculus has changed dramatically. With employers now staring at an upfront, nonrefundable $100,000 fee per H-1B petition, many indicate they will sponsor only a very small slice of candidates, if any, in the next cycle.

The immediate consequences include:

• Recruiters pausing sponsorship talks or giving mixed messages to candidates.
• Employers signaling they may cut H-1B filings to a fraction of prior levels.
• Students reconsidering financial plans, including loan repayment and relocation options.

“I’m one of those who will be badly affected by this new H-1B visa rule, as I cannot apply for the upcoming lottery. … We’re consulting lawyers to see if students can be exempted, but we still need clarity.” — recent master’s graduate quoted by Indian Express

Timing and cohorts at greatest risk

Students graduating in late 2025 or early 2026 face acute uncertainty because employers must decide soon whether to budget for sponsorship under the new fee structure. Without court-ordered changes or agency carve-outs, many students may exhaust OPT/STEM OPT and then be forced to depart the United States.

Key timing considerations:

• Employers begin recruiting and budgeting months before the H-1B filing window.
• Litigation could pause or overturn the fee, but courts have not yet paused implementation as of mid-October 2025.
• Students should track OPT, STEM OPT extension, and H-1B deadlines closely.

Possible shift to wage-based selection

Policymakers are also discussing a wage-based selection system to replace or supplement the current random H-1B lottery. Details, thresholds, and start dates remain unconfirmed.

Potential effects:

• Could favor candidates in higher-paying roles.
• Might disadvantage early-career graduates whose salaries sit below senior pay bands.
• Could push employers to raise offers or manipulate pay structures to improve selection odds.

Industry reaction is mixed: some see better alignment with advanced skill roles; others warn it would exclude promising early-career talent and widen geographic inequities.

Policy changes overview

• New surcharge: $100,000 on new H-1B petitions, effective September 21, 2025 (nonrefundable).
• Caps remain: 65,000 regular cap + 20,000 advanced degree cap.
• Wage-based discussion: Under consideration but not finalized.
• Litigation: Multiple lawsuits challenge the surcharge; no court has halted it as of October 2025.

According to analysis by VisaVerge.com, the cost alone will force difficult choices—especially at mid-sized companies and startups that lack deep legal budgets.

Table — Quick policy snapshot

Impact on students

The fee and policy uncertainty are reshaping decisions at every stage — from program selection to job hunting and finances.

Student-facing effects:

• Greater focus on universities with strong internship-to-hire pipelines.
• Preference for roles that produce clear business impact (cost savings, security, product value).
• Increased competition for internships that lead to full-time roles with sponsorship.

Who is most at risk:

• Mid- to lower-tier academic profiles or less specialized degrees — employers may limit sponsorship to a few candidates.
• Students graduating late 2025/early 2026 — may miss the next H-1B selection depending on employer decisions or legal outcomes.

Practical student strategies (summary):

1. Prioritize internships and early networking to secure sponsorship-ready offers.
2. Build verifiable impact: measurable results, deployments, patents, or code contributions.
3. Prepare backup plans: job searches in India, Canada, Australia, or Europe; financial models for loan repayment.
4. Monitor official updates and court rulings closely — guidance can change rapidly.

Impact on employers

Employers are recalibrating hiring, budgeting, and talent pipelines:

• Large firms may prioritize H-1B petitions for senior or niche roles rather than new grads.
• Smaller firms might continue trial OPT/STEM OPT arrangements but refrain from filing H-1B petitions.
• Some companies could hire remotely (for example, in India) or delay transfers until rules change.

Possible labor-market distortions:

• Employers might raise offers to improve wage-based selection rankings (if implemented).
• Titles or pay structures may be adjusted in ways that prioritize selection odds over role realities.
• Reduced early-career H-1B sponsorship could thin the pipeline for R&D, security, and critical infrastructure roles.

University and enrollment effects

Universities are closely monitoring enrollment signals and adapting:

• Graduate programs, especially in engineering and computer science, may see fewer international applicants.
• Departments could expand co-op and industry partnership models to keep students job-ready within OPT windows.
• Career centers emphasize early internships, portfolio development, and detailed faculty recommendations that document direct business contributions.

International agents report increased interest in alternatives such as Canada, Australia, and parts of Europe, which could lead to lower U.S. international enrollment and reduced diversity in STEM cohorts.

Legal uncertainty and recommended next steps

As of October 2025, multiple lawsuits challenge the $100,000 surcharge; outcomes remain uncertain. The combination of high upfront fees and a possible wage-based selection model creates layered unknowns for planning.

For students and recent graduates: recommended actions

• Track official updates closely — agency guidance and court orders can change timelines quickly.
• Prioritize roles where employers have a documented history of sponsorship.
• Build proof of impact (quantifiable outcomes, detailed supervisor/faculty letters).
• Keep backup paths ready: job searches in India, Canada 🇨🇦, Australia, or Europe; financial contingency plans.
• Mind your dates: monitor OPT application windows, STEM OPT extension timing, and end-of-authorization dates.

For STEM OPT holders specifically:

• Use the extra 24 months to build achievements that make you indispensable.
• If early in STEM OPT, spend the next six months maximizing measurable results.
• If late in STEM OPT, have candid conversations with managers now about willingness to sponsor under the $100,000 hurdle.

Practical checklist for students

• Clarify target teams and employers with a track record of sponsoring.
• Strengthen references and secure detailed contribution statements from supervisors and professors.
• Document achievements in a portfolio (code, papers, patents, deployments), respecting confidentiality.
• Model finances and repayment schedules for multiple scenarios, including a return to India.
• Apply for roles in multiple countries concurrently to maintain options.

Broader consequences and outlook

• The new fee likely reduces H-1B filings from employers that previously sponsored many new grads, meaning fewer OPT → H-1B conversions.
• If courts or agencies modify the surcharge or introduce carve-outs, filing behavior could rebound — but employers say they need months to rework budgets and headcount plans.
• Even with historically low denial rates (around 2% for initial petitions in FY 2022), the upfront cost changes the risk calculus: approval likelihood may no longer justify the expense for many positions.

The path from F-1 → OPT → STEM OPT → H-1B still exists, but the ground has shifted. Students who keep multiple routes open, build clear evidence of impact, and watch legal developments closely will be best positioned to act quickly.

The coming months will test how resilient the student-to-worker pipeline is under financial and policy strain. For Indian students who have long viewed the United States as a place to learn, work, and grow, the dream has not vanished — it has become more expensive for employers to support and more competitive for graduates to secure. Whether the system adapts through courts, policy tweaks, or market adjustments, one fact is clear: students, universities, and employers must plan with sharper focus and act faster in a landscape that changes week by week.

For foundational reference on H-1B rules and cap processes, see the USCIS page on H-1B specialty occupations at https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations.