ACE and Higher Ed Warn H-1B Reforms Threaten U.S. Competitiveness

(UNITED STATES) The American Council on Education (ACE) and dozens of higher education groups are warning that new H-1B policies rolled out in late 2025—anchored by a $100,000 fee for most new H-1B petitions from abroad—could weaken U.S. 🇺🇸 competitiveness in teaching, research, and high-skill industries. The fee took effect on September 21, 2025, after a proclamation by President Trump on September 19. Colleges, universities, and research hospitals say the change will price out many hires, cut off pipelines for international scholars, and push global talent to countries offering smoother work paths after graduation. According to analysis by VisaVerge.com, the fee and related measures are already reshaping employer planning for 2026 hiring cycles.

Policy changes: what was announced

• The rule institutes a $100,000 fee for most new H-1B petitions filed for beneficiaries who are outside the United States and do not already hold a valid H-1B visa.
• The fee became effective September 21, 2025 following a presidential proclamation on September 19.
• ACE, joined by 29 associations, is pressing for a carve-out for higher education employers, calling the fee “prohibitively expensive.” They argue many academic departments operate on tight budgets and grant funding that cannot absorb one-time six-figure charges.

Wage-based selection proposal

• The Department of Homeland Security has proposed a wage-based H-1B selection method that would rank registrations by offered pay level.
• ACE and 18 partner associations say this plan could:
  • Sideline early-career professionals, including recent U.S. master’s and Ph.D. graduates who often start at lower wages.
  • Conflict with the law’s set-aside of 20,000 H-1B numbers for holders of advanced U.S. degrees.
  • Push prospective graduate students and early-career workers to choose other countries.

Immediate impacts on applicants, campuses, and employers

• ACE cites survey data projecting a 30–40% drop in international student enrollment for the 2025–26 academic year, with an estimated $7 billion hit to the U.S. economy.
• In 2024, international students contributed nearly $55 billion and supported about 400,000 jobs.
• University business officers warn of cascading effects:
  • Fewer teaching assistants and lab researchers.
  • Fewer startup founders from campus innovation hubs.
  • Reduced local economic activity in college towns.

Timing and hiring-cycle disruption

• Many faculty searches begin in the fall for the next academic year. The fee’s sudden onset on September 21 affected planned hires for 2026.
• Departments report actions taken in response:
  • Pausing searches
  • Dropping shortlists
  • Shifting candidates into short-term visitor roles with limited work options
• For grant-funded labs, a single $100,000 charge per hire can wipe out equipment budgets or student stipends; for smaller institutions, it can end searches altogether.

Effects beyond star hires

• Many H-1B hires are early-career researchers, postdocs, and clinical fellows whose skills support federally funded projects.
• Medical centers relying on H-1B doctors and researchers say the fee could:
  • Ripple into patient care
  • Slow progress on public health challenges
• The fee often applies to research teams partnering with industry, potentially deterring startups and small firms that recruit via university ties.

Employer responses and administrative considerations

• Some campuses are exploring alternatives to avoid triggering the fee:
  • Shifting candidates into roles that allow filing a change of status within the U.S., which may be outside the fee’s scope.
  • Using J-1 research scholar options for short-term projects (though these typically don’t suit long-term employment and have strict rules).
• Campus immigration officers recommend planning around timing, funding, and case type to limit disruptions.

Required standard steps (if filing an H-1B)

If employers proceed, they must still complete standard H-1B steps, including filing:
1. Form I-129 (Petition for a Nonimmigrant Worker) — see USCIS’s official page: https://www.uscis.gov/i-129
2. Form I-907 for premium processing when available — see USCIS’s page: https://www.uscis.gov/i-907

Note: USCIS’s H-1B overview is available at the official page: https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations

• School officials emphasize the new $100,000 fee sits apart from regular filing fees and attorney costs. In many cases, the employer must bear certain fees and cannot pass them to the worker.

Legal, political, and strategic pushback

• Litigation and advocacy:
  • The U.S. Chamber of Commerce and several universities have filed lawsuits challenging the fee.
  • Bipartisan lawmakers have urged the administration to reconsider, citing harm to small employers and innovation.
• ACE and partner groups seek two immediate steps:
  1. An exemption from the $100,000 fee for accredited higher education institutions and affiliated nonprofit research organizations.
  2. Withdrawal of the wage-based selection proposal.

ACE and partners argue these steps align with long-standing bipartisan support for welcoming advanced-degree talent from U.S. campuses into the workforce, and note Congress created an advanced-degree set-aside for this purpose.

Broader consequences and concerns

• Universities warn of long-term fallout if policies remain:
  • Fewer startups from campus labs
  • Weaker pipelines for K–12 STEM teaching
  • Slower progress in semiconductor research, climate science, and bioengineering
• Industry groups echo concerns: barriers on the university side hurt collaboration and private-sector research partnerships.
• Supporters of tighter rules contend high fees may reduce misuse and steer employers toward hiring U.S. workers. Higher education groups counter that many academic roles cannot be filled from local labor markets and that international scholars often generate more jobs by winning grants and launching projects.

Operational guidance and campus planning

• University counsel urge:
  • Careful recordkeeping on recruiting, salary decisions, and funding sources in case policy or court rulings change obligations later.
• International offices are preparing:
  • Templates to explain costs to deans and department chairs
  • Decision trees for case strategy by candidate location
• Student advisors are counseling graduating international students to:
  • Apply early for OPT
  • Monitor employer plans for H-1B sponsorship given the unsettled landscape

Current status (as of late 2025)

• The $100,000 fee is active for most new abroad-based H-1B petitions filed on or after September 21, 2025.
• The wage-based selection remains a proposal (status as of October 27, 2025) and continues to draw broad opposition.
• Higher education groups summarize their concern succinctly: the United States cannot afford to wall off young researchers and new faculty at the start of their careers. If the country wants to lead in labs and classrooms, H-1B policies must keep doors open to the talent trained on its own campuses.