(WASHINGTON, D.C.) America’s top research universities have joined the nation’s largest business lobby in a federal lawsuit to block President Trump’s new Proclamation 10973 on many first-time visa petitions, arguing the move violates congressional authority and will immediately curtail hiring of highly skilled workers. The Association of American Universities (AAU), which represents 71 leading research institutions, including 69 in the United States, filed the case with the U.S. Chamber of Commerce in the U.S. District Court for the District of Columbia, backed by a coalition of higher education associations, major employers, religious groups and unions, including the American Association of University Professors.
The challenge targets Proclamation 10973, issued on September 19, 2025, which imposes a $100,000 H-1B fee on new H-1B visa petitions for foreign nationals outside the United States who do not already hold a valid H-1B. The fee took effect for petitions filed on or after September 21, 2025 and is set to expire in 12 months, with the administration able to extend it before the March 2026 H-1B lottery. Plaintiffs have asked the court for an immediate injunction to halt enforcement while the case proceeds, saying the proclamation
“blatantly contravenes” the fee structure Congress set for employment-based visas and “concretely harms” universities and companies forced to shoulder costs or cut hiring.
The AAU and the U.S. Chamber of Commerce say the H-1B fee was adopted without clear statutory authority and upends long-standing hiring plans across research, healthcare, and technology. They note the $100,000 fee is on top of existing administrative costs typically ranging from $1,500 to $5,000 per visa and dwarfs the previous average cost of about $3,600 per petition. The proclamation cites alleged misuse of the H-1B program in the information technology sector to suppress wages and replace American workers, and it allows exemptions only when an application is deemed in the “national interest.” The lawsuit contends the measure is punitive and designed to deter lawful hiring of skilled foreign talent that universities and employers say is essential to U.S. research and economic growth.
“The new $100,000 visa fee will make it cost-prohibitive for U.S. employers, especially start-ups and small and midsize businesses, to utilize the H-1B program, which was created by Congress expressly to ensure that American businesses of all sizes can access the global talent they need to grow their operations here in the U.S.,” said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce.
The Chamber, the country’s largest business organization, says the sudden spike will hit smaller firms hardest and undermine the program’s original aim of helping employers fill specialty roles when qualified U.S. workers are unavailable.
Higher education leaders warn the rule will strip funding from labs, classrooms, and hospitals. The AAU describes its member institutions as
“world-renowned centres of innovation and scholarship”
that rely on the H-1B program to recruit scientists, clinicians and instructors whose expertise supports key national priorities. In court filings, the association said the $100,000 fee “concretely harms” its members, as those unable to pay must limit hiring while others face a “classic pocketbook injury.” University officials say those trade-offs will be felt quickly, with projects postponed, course offerings curtailed, and clinical services constrained in areas already facing shortages.
Stanford University illustrates the scale of the impact, according to the filings. With an average of 270 new H-1B visas per year, Stanford would face an additional $27 million in costs if it continued to hire the same number of foreign professionals, a sum that administrators say would inevitably divert funds from research and teaching into visa fees. Other major research universities with robust hiring of postdoctoral scholars, visiting faculty and specialized clinicians expect similar pressures, particularly in fields such as engineering, computer science and healthcare where global competition for talent is intense.
The policy’s reach is not universal. The fee applies only to new petitions for foreign nationals outside the United States without a valid H-1B visa and does not cover extensions or renewals for current H-1B holders. It also does not apply to F-1 students already in the country who transition to H-1B status, a common path for graduates of U.S. universities. But colleges and companies say the carve-outs do little to blunt the shock to global recruiting pipelines because many new hires, including postdocs and specialized researchers, come from abroad and would immediately be subject to the new cost.
In an October 23, 2025 letter to Department of Homeland Security Secretary Kristi Noem, the American Council on Education and 29 higher education associations urged the administration to exempt colleges and universities altogether. The groups called the new H-1B fee an
“extraordinary and unnecessary burden,”
warning that the policy would weaken U.S. competitiveness and make it harder to attract and retain talent in high-demand fields. University leaders say the effects will ripple through labs and hospitals, where teams depend on international hires to maintain output in critical research areas, run clinical trials, and provide patient care in specialized settings.
The legal challenge frames the proclamation as an executive overreach into a domain Congress has carefully structured, with fees typically set through specific legislation or administrative rulemaking tied to processing costs. Plaintiffs argue that by imposing a $100,000 surcharge per petition without a statutory basis, the administration is effectively rewriting immigration law. The lawsuit seeks an immediate injunction, saying universities are finalizing offers to overseas candidates now and that employers are preparing for the next cap season; delays in court action, they argue, will force institutions and firms into costly choices with lasting consequences for programs and projects.
Advocates for the lawsuit also highlight the timing. The fee applies to filings from late September and is set to run for 12 months, covering the main annual H-1B cycle unless the court halts it. Universities plan faculty appointments and postdoctoral hiring months ahead, often across academic years. Major employers map out specialty recruitment and internal transfers on long timelines. Plaintiffs say the abrupt shift has already led some large companies to suspend H-1B sponsorships for new hires from abroad, adding that early cancellations and rescinded offers will cascade across departments and teams as fall and winter hiring moves forward.
At the heart of the dispute is the role of the H-1B program in the U.S. economy. Higher education leaders say H-1B employees plug urgent gaps in teaching and research, while employers say they need access to global talent to expand operations and launch new products. The USCIS H-1B program page describes the H-1B as a temporary visa for specialty occupations requiring highly specialized knowledge and at least a bachelor’s degree or equivalent. Plaintiffs say the new H-1B fee is at odds with that framework, because it erects a financial wall unrelated to program integrity or processing costs, and will be most disruptive where margins are thin—university labs, early-stage companies, and small or midsize regional employers.
The AAU emphasizes its members’ dependence on international scholars not just in STEM fields but also in teaching and healthcare, where clinicians on H-1B visas often serve in hospitals that partner with medical schools. The lawsuit says campus units face immediate choices: pause hiring, reallocate funds from grants and departmental budgets, or scale back research commitments when overseas candidates decline offers affected by the fee. In sectors like computer science and engineering, where salaries are high and competition fierce, plaintiffs say the surcharge could still chill recruitment because the fee is so large compared to departmental or startup hiring budgets.
Business groups echo those worries for the broader economy. The U.S. Chamber of Commerce argues that the most acute effects will land on the employers least able to absorb a sudden six-figure outlay. Small firms and startups typically rely on a handful of H-1B hires to fill critical roles, and the Chamber says a $100,000 levy per new hire makes those plans untenable. Larger companies can spread costs over bigger workforces, but HR teams still face the prospect of deferring projects or shifting roles offshore if talent cannot be brought to the United States without incurring what the Chamber calls a prohibitive expense.
The administration’s stated rationale—curbing alleged abuses of the program in the IT sector—has long been a focal point in debates over high-skill immigration, with critics claiming some staffing firms use H-1B workers to undercut wages. Plaintiffs counter that Congress and agencies have already set guardrails and that if abuses exist, targeted enforcement is the remedy, not a sweeping surcharge that, in their words,
“blatantly contravenes” the fee structure established by lawmakers.
The lawsuit notes that the proclamation leaves in place the existing fee regime while layering on the new $100,000 charge, amplifying costs with no clear tie to administrative needs.
Universities and employers say the chilling effect is already visible in recruiting data points and internal decisions. Search committees are recalibrating candidate pools, shifting attention toward applicants already in the United States who would not be subject to the fee. Human resources teams are rewriting offer letters, adding contingencies that could weaken candidates’ confidence in the hiring process. Administrators describe a widening disparity between institutions and firms that can absorb the fee and those that cannot, potentially skewing opportunities toward wealthier campuses and corporations while less-resourced entities retreat from global hiring.
The AAU underscores the reputational risk if candidates see the United States as unpredictable or hostile to global talent. In its public statements, the association said its members are
“world-renowned centres of innovation and scholarship,”
and it warns that sudden costs of this magnitude may push scholars and professionals to look to other countries for opportunities. That concern is shared across the higher education sector, where leaders say the policy could erode the pipeline of PhD-level researchers and highly trained clinicians who often advance from initial research roles to faculty or senior technical positions.
For now, the legal fight will determine whether the fee remains in place during the current academic and hiring cycles. The plaintiffs want the court to suspend the policy immediately by issuing a preliminary injunction, arguing that the damages—lost hires, delayed projects, and diverted funds—cannot be undone later. The administration will have to defend the proclamation’s legal grounding and policy rationale in a venue where judges have previously scrutinized abrupt immigration changes that reshape labor markets and institutional planning.
Even as the case moves forward, colleges, universities, and employers are making contingency plans. Some institutions are weighing short-term budget reallocations to keep crucial hires on track, while others are quietly postponing offers that would trigger the $100,000 charge. Advisers say the carve-outs—no impact on H-1B renewals or extensions, and no application to F-1 students changing status—provide limited relief because many new recruits originate overseas. Sector groups say they will continue pressing for categorical exemptions for accredited colleges and universities, pointing to the letter that called the fee an
“extraordinary and unnecessary burden”
and urging DHS to shield educational employers.
The stakes for the research ecosystem are particularly high. In areas like artificial intelligence, semiconductors, and biomedical science, university labs often collaborate with industry and federal agencies on projects tied to national priorities. Plaintiffs argue that the H-1B fee risks slowing that work at a moment when the United States faces intense global competition. They say their members cannot easily replace highly specialized hires from abroad, and that suddenly adding six figures per petition will force trade-offs that shrink teams, delay equipment purchases, and narrow the scope of studies and trials.
As the docket fills in the District of Columbia, universities and businesses are calibrating their strategy around a policy that, absent court intervention, will remain in force through most of the coming hiring cycle. The outcome will shape how institutions and employers approach high-skill immigration in the near term, whether by absorbing costs, reducing hiring, or shifting roles to candidates already in the country. For the AAU, the U.S. Chamber of Commerce, and their allies, the goal is clear: persuade the court that Proclamation 10973 overstepped the limits set by Congress and that the $100,000 H-1B fee must be suspended before it rewires the pipelines that feed American research, healthcare, and innovation.
This Article in a Nutshell
Proclamation 10973, announced Sept. 19, 2025 and effective for filings from Sept. 21, 2025, imposes a $100,000 surcharge on new H-1B petitions for applicants outside the United States without a valid H-1B. The Association of American Universities and the U.S. Chamber of Commerce, backed by universities, employers and unions, filed suit in the U.S. District Court for D.C., seeking a preliminary injunction. Plaintiffs argue the fee lacks statutory authorization, sharply exceeds typical administrative costs, and will force academic institutions and smaller employers to curtail hiring, divert research funds, and postpone projects. The fee runs for 12 months unless extended, potentially affecting the March 2026 H-1B lottery. Exemptions exist for renewals, extensions and F-1 students changing status, but many new recruits abroad remain exposed. The outcome of the legal challenge will shape hiring plans, research projects and the U.S. ability to attract global talent during a critical hiring cycle.
