A California-led coalition of state attorneys general has formally urged the US Department of Homeland Security (DHS) to withdraw a proposal that would require universities to pay up to $100,000 per international student for post-study work training authorisation, warning the measure could suppress foreign enrolment and inflict lasting damage on the American economy. The formal objection was submitted on Monday, 10 November 2025, with California Attorney General Rob Bonta announcing the move on Tuesday.

What the Proposed Rule Would Require

The proposal, published on 8 October, targets Optional Practical Training (OPT) — a programme that permits foreign students on F-1 visas to work in fields directly related to their academic studies. Under its terms, colleges and universities would be required to pay $70,000 when first recommending a student for OPT, and an additional $30,000 for any subsequent recommendation, including the STEM extension available to graduates in science, technology, engineering, and mathematics. Institutions would remit payments directly to DHS, though the rule would allow them to seek reimbursement from students or employers — effectively shifting the financial burden onto graduates entering the job market.

Legal Grounds for the Challenge

The coalition argued that DHS lacked the congressional authority to impose what it characterised as a tax disguised as a fee. According to the attorneys general, the proposal violates both the Immigration and Nationality Act and the Administrative Procedure Act, on the grounds that the government failed to adequately assess the financial costs to states, educational institutions, and the broader economy. The coalition also objected to the 30-day public comment window, calling it insufficient for a policy with potentially sweeping consequences. 'We have already fought and won against this Administration's attempt to impose an unauthorised $100,000 tax on H-1B visas, yet it continues to pursue unlawful overreach at the expense of our students, universities, and economy,' Bonta said. The reference to the H-1B dispute signals a pattern of legal friction between the coalition and the current federal administration over immigration-linked fees.

Scale of the Impact

More than 294,000 international students participated in OPT across the United States during the 2024-25 academic year. Maintaining current participation levels under the proposed fee structure is estimated to cost educational institutions a collective $12.9 billion a year, according to figures cited by the coalition. The attorneys general warned that the financial pressure could lead some universities to stop recommending students for the programme altogether, while others may see falling international enrolment, reduced tuition revenue, and reduced capacity to attract skilled graduates. In California alone, international students contributed $6.3 billion to the state economy and supported more than 52,000 jobs during the same academic year.

What It Means for Indian Students

For Indian students weighing American universities, the dispute raises direct questions about access to post-graduation work experience. Though the proposed payment obligation falls formally on institutions, the rule would permit universities to recover costs from students or sponsoring employers. Indian nationals represent one of the largest cohorts of international students and OPT participants in the United States, making the outcome of this legal challenge particularly consequential for prospective and current students from India. 'International students bring diverse perspectives, strengthen our communities, and help drive discoveries and technological advancements that benefit us all,' Bonta said.

Who Joined the Coalition

Attorneys general from New York, New Jersey, Maryland, Massachusetts, Michigan, Illinois, Washington, and Virginia joined California's submission. The District of Columbia was also among the signatories. The proposal has not taken effect and remains under review pending the public comment process.

The next critical milestone will be the close of the public comment period, after which DHS will determine whether to proceed with, revise, or withdraw the rule — a decision that could reshape international student pathways for years to come.