Federal Immigration Policy and Higher Education: The Impact on Students, Institutions, and the Greater Philadelphia Talent Pipeline

Overview

While Public Law 119-21 (aka “The One Big Beautiful Bill Act”) reshapes how students finance higher education in the United State, a parallel and equally consequential set of federal actions is also reshaping who is permitted to study, research, and work in the country. Since January 2025, the administration has issued a cascade of executive orders, proclamations, regulatory proposals, and enforcement actions affecting international students and scholars: a $100,000 H-1B visa fee imposed by a presidential proclamation [21]; travel bans now covering 39 countries as of January 1, 2026 [22]; a Department of Homeland Security (DHS) proposal to end "duration of status" and replace it with fixed periods of stay not to exceed four years [21][6]; a final H-1B weighted-lottery rule [15]; mass SEVIS terminations affecting thousands of F-1 visa students in spring 2025 [8]; and a USCIS "hold and review" memorandum freezing pending benefit applications from nationals of the 39 affected countries [22].

These changes do not target higher education explicitly, but the sector is among those most exposed. According to NAFSA, international students contributed roughly $43.8 billion to the U.S. economy in 2023–24 [12] and account for nearly half of STEM master's and doctoral degrees awarded in the United States. Pennsylvania hosts more than 50,500 international students — the sixth-highest total of any U.S. state [4] — and Greater Philadelphia is home to one of the densest concentrations of internationally enrolled students in the country.

This brief focuses narrowly on the downside risks to students, institutions, and the workforce over short, medium, and long horizons at the federal, state, and Greater Philadelphia level. Many of the underlying rules remain in active rulemaking or litigation, and final outcomes may differ from current proposals.

What You Need to Know:

1. Approximately 1.16 million international students were enrolled in U.S. degree programs as of October 2025 [8]. Pennsylvania ranks sixth nationally with more than 50,500 international students, who spend an estimated $2.1 billion in the Commonwealth and support 21,000 jobs [4].

2. The University of Pennsylvania enrolls roughly 6,900 international students (about 25% of its total student body), Drexel University enrolls about 2,200 (9–10%), and Temple University enrolls about 1,980 (6.6%) [4]. Carnegie Mellon and Penn State are also among the leading hosts in the Commonwealth. Across the region as a whole, roughly 23,000 international students account for about 8% of all degrees awarded. Foreign-born researchers account for roughly 30% of patents in R&D-intensive industries [4] and a large portion of publications at some leading research universities.

3. Three federal patterns shape what follows. First, F-1 and J-1 visa issuances dropped 12% from January to April 2025 and an additional 22% year-over-year in May 2025 [9], and student visa issuances during the peak summer months of June through August 2025 declined 36% compared with the same period in 2024 [17]. Second, NAFSA reported a 17% decline in new student enrollment, a 7% overall decline excluding students on Optional Practical Training (OPT), and $1.1 billion in lost revenue and nearly 23,000 fewer jobs — including an estimated $53.3 million loss in Pennsylvania [13]. Third, regulatory uncertainty itself is the harm: the Higher Ed Dive analysis found that 72% of institutions offered international students deferrals to spring 2026 and 56% offered deferrals to fall 2026 — a level of accommodation unprecedented outside the pandemic [7].

Travel Bans and the January 1, 2026 Proclamation

Presidential Proclamation 10998, signed December 16, 2025 and effective January 1, 2026, expanded the June 2025 travel ban to fully or partially suspend entry from 39 countries [22][19]. 19 countries face full suspension as both immigrants and nonimmigrants; the partial-ban list specifically restricts F, M, and J visas. On January 1, 2026, U.S. Citizenship and Immigration Service (USCIS) issued a policy memorandum directing a "hold and review" on all pending benefit applications from nationals of the 39 affected countries, with re-review of approvals issued on or after January 20, 2021 [22]. On January 21, 2026, the State Department also paused immigrant visa issuance for nationals of 75 countries [23].

In the near term, the proclamation directly disrupts students, faculty, and scholars from affected countries who travel internationally — including those engaged in fieldwork, conferences, or family emergencies — because returning to the U.S. requires a valid visa and new visas are unavailable. Georgetown's Office of Global Services reached out in March 2026 to F-1 and J-1 students whose SEVIS records indicated they were outside the United States [6] and could not return after spring break, an indication that institutions across the country are now actively triaging cases of students stranded abroad. Over the medium term, the chilling effect on application volumes from the affected countries — and from countries reasonably worried about being added in the next 180-day review — will compound. Over the long term, the U.S.’s global standing as the top destination for talent could erode and competitor countries (U.K., Canada, Australia, and other European countries) may actively recruit displaced students and researchers with lower tuition and higher wages. [7] [4].

In Greater Philadelphia, the regional impact concentrates at the research universities most reliant on globally distributed graduate cohorts. Penn, Drexel, Temple, and Jefferson all enroll students and host postdoctoral scholars from countries on the partial- or full-ban lists, and our previous Leading Indicator notes specific cases in which a Penn chemistry lab expected two international PhD students this fall and only one arrived, leaving a grant-funded project understaffed; a Temple computer science recruit chose Canada after months of visa limbo; and Drexel advisors report current students seeking postdoctoral positions abroad due to status uncertainty. The impacts are, in short, tangible.

The $100,000 H-1B Visa Fee and the Weighted-Lottery Rule

A presidential proclamation issued September 19, 2025 imposes a $100,000 fee on new H-1B petitions for consular processing filed on or after September 21, 2025, restricting employer-sponsored entry into the U.S. unless the fee is paid [22]. Subsequent guidance clarified that the fee does not apply to amendments, changes of status, or extensions for individuals already in the U.S. On February 27, 2026, the Department of Homeland Security (DHS) final H-1B weighted-lottery rule took effect [15], replacing the random selection process with a system that favors higher-wage applications — disadvantaging recent international graduates seeking entry-level positions. The administration also published a proposed prevailing-wage rule on March 27, 2025 [15] that would raise required H-1B wages by approximately 21–33% across all four wage tiers, with the largest increase falling on Wage Level I (entry-level workers, from the 17th to the 34th percentile).

In the near term, the $100,000 fee functions as an effective barrier for the small and mid-size employers — research institutions, hospitals, school districts, nonprofits, and early-stage technology firms — that historically used H-1B visa to retain international graduates after the work authorization benefit known as the Optional Practical Training (OPT) that comes with F1 student visa expires. In the medium term, the weighted-lottery rule and prevailing-wage proposal compound this effect: even employers willing to pay the fee will find it harder to sponsor candidates in lower-wage but mission-critical fields. Over the long term, the effect is to cut off OPT's primary pathway to permanent residence for new graduates in fields such as education, public health, social services, journalism, and the arts. The Business Roundtable has estimated that curbing OPT alone could cost 443,000 jobs over a decade, including 255,000 held by U.S.-born workers [5]; the H-1B framework restricts the same pipeline at the next stage.

For Greater Philadelphia, the H-1B framework matters tremendously. The region's research and healthcare anchors — Penn Medicine, CHOP, Jefferson Health, Temple Health, Drexel, and the cluster of pharmaceutical and biotech firms in University City and the Pennsylvania Biotech Center — depend on H-1B sponsorship to retain trained graduates. The 5% of OPT participants who work in health professions, plus the substantial share in computer science (31%) and engineering (18%) [3], align directly with Philadelphia's largest employer categories. The $100,000 fee also disproportionately constrains the region's smaller life-sciences employers and early-stage startups; large national employers like Amazon, Google, Microsoft, and Meta — the top OPT-employing firms [3] — can absorb the cost more readily than a 50-person Philadelphia biotech. 

For smaller regional employers, the challenge is not only cost but also capacity: rapidly changing rules create compliance and administrative burdens for organizations with limited immigration-law expertise, making clear employer guidance an increasingly important part of retaining international talent in the region.

The Proposed End of "Duration of Status"

On August 28, 2025, DHS published a proposed rule in the Federal Register titled "Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media" [21][6]. The rule would replace the long-standing "duration of status" framework for F-1 and J-1 visa students with admission for the program length or four years, whichever is shorter, plus a 30-day grace period (reduced from 60 days). Students needing additional time — including for program extensions, school transfers, level changes, post-completion OPT, or J-1 academic training — would be required to file a Form I-539 extension of stay with USCIS, with new fees, biometrics, and possible interview. As of May 5, 2026, NAFSA reported that DHS had submitted the final rule to the Office of Management and Budget for review [6], and most observers expect the rule to be effective in time to affect the September 2026 intake.

The near-term effect, even before any final rule takes effect, is uncertainty: students are worried that their visa could expire mid-program. The medium-term effect, once the rule is in force, is bureaucratic friction at every degree milestone: a four-year doctoral program would require at least one extension; a six- or seven-year PhD would require multiple extensions. Each extension creates a window for denial, request-for-evidence delays, and unlawful-presence accrual for what would otherwise be technical overstays. Over the long term, the rule changes the calculation for students choosing between the U.S. and competitor countries where program-length admission is the norm.

Regionally, the impact is most salient for Penn, Drexel, Temple, and Jefferson, all of which enroll multi-year graduate cohorts in fields where program completion frequently extends beyond the proposed cap — particularly in the biomedical sciences, where MD–PhD and combined-degree programs commonly run seven to eight years. A duration-of-status rollback creates direct administrative exposure for thousands of students at exactly the institutions most central to the regional research economy.

SEVIS Terminations and Visa Revocations

In mid-March 2025, colleges and universities began witnessing a surge in visa revocations and SEVIS-record terminations affecting thousands of international students and scholars, often based on vague or unexplained grounds [8]. The Presidents' Alliance on Higher Education and Immigration, joined by the Association of Independent Colleges and Universities in Massachusetts, filed an amended complaint in U.S. District Court for the District of Massachusetts on June 27, 2025 [15], challenging ICE's mass SEVIS termination practices.

In the near term, affected students face immediate loss of work authorization, ineligibility to remain in the U.S., and severe disruption to their education. In the mid-long term, the chilling effect extends beyond directly affected students — every international applicant now factors in the possibility of sudden status loss when deciding whether to enroll.

OPT and STEM OPT Under Pressure

Optional Practical Training (OPT) provides up to 12 months of post-graduation work authorization for F-1 students, with an additional 24 months available to STEM graduates through the STEM OPT extension [20] — for a total of 36 months. According to the Congressional Research Service, OPT participation reached 418,781 in calendar year 2024, more than two-thirds of whom are citizens of Asian countries [3]. OPT is established by regulation rather than statute, which makes it directly vulnerable to administrative rollback. Forbes reported in November 2025 that DHS is drafting a stand-alone rule to eliminate or restrict OPT/STEM OPT [11], and the current director of USCIS Joseph B. Edlow, testified in his May 2025 nominee hearing that he favored a regulatory pathway to end OPT, calling the program "mishandled" [11].

The bipartisan Keep Innovators in America Act (H.R. 8013), introduced March 19, 2026 by Representatives Liccardo, Obernolte, and Krishnamoorthi, would codify OPT in statute, but enactment is uncertain [5][11]. In the near term, USCIS has paused processing of pending I-765 Application for Employment Authorization to require in-person biometric appointments after a December 15, 2025 policy memorandum [6], and premium processing fees for OPT and STEM OPT increased to $1,780 for filings postmarked on or after March 1, 2026 [10]. Backlogs are forcing students to delay job start dates or risk unlawful presence. In the medium term, if the STEM OPT extension is rescinded — which would require only regulatory action — total work authorization drops from 36 months to 12 months, eliminating the multi-cycle H-1B lottery window that has historically allowed STEM graduates two or three attempts before their employment authorization expires. Long-term, the Business Roundtable estimates curbing OPT could cost 443,000 jobs over a decade and reduce hourly wages and GDP across the economy [5]; NAFSA analysis found that enabling 100,000 international STEM graduates to remain annually would add $233 billion to GDP over a decade [4] — a figure that runs in reverse if OPT is curtailed.

For Greater Philadelphia, OPT is the bridge between the region's universities and its employers, and that bridge is being severely weakened. Drexel's cooperative education program is built around the assumption that international students can complete co-op cycles and remain for post-graduation OPT [18] — Campus Philly research finds that 40% of Drexel's international students begin their careers in the Philadelphia region after graduation. The region's roughly 1,200 computer science graduates each spring across Penn, Drexel, Temple, Saint Joseph's, and La Salle include a substantial share of international students whose ability to take regional jobs depends entirely on OPT. Loss of STEM OPT would not just affect students; it would reshape the labor market for Philadelphia's biotech, fintech, health-IT, and pharmaceutical employers.

The Cross-Subsidy Economics: Why Restricting International Enrollment Hurts American Students

A crucial point often missed in popular debate is that international students do not displace American students from U.S. higher education — they expand the supply of seats available to them. This is because international students typically pay tuition at sticker price, while many American students are heavily subsidized by federal and state governments and by institutional aid, generally paying net tuition well below sticker price. In short, international students' full-price payments subsidize the seats American students occupy.

Empirical research is consistent on this point. A peer-reviewed study published in the Journal of Public Economics found that, at the graduate level, international students on average increase enrollment of domestic students on roughly a 1-for-1 basis [16]. Another 2021 research from the Annenberg Institute at Brown University found similar results at the undergraduate level among public universities, along with measurable increases in bachelor's degree completion [2]. A working paper published in December 2025 from the Center for Higher Education Policy Studies at San Diego State University reaches comparable conclusions and finds parallel evidence in the U.K., which hosts a similarly large international student population [24]. The economic logic is reinforced in the earlier research by Bound and Turner, showing that between 1950 and 1990, secular growth in the U.S. college-age population reduced higher educational attainment as subsidized seats failed to keep pace with demand — exactly the dynamic international tuition revenue helps offset [1].

The dollar amounts in question are not at all trivial. Revenue to U.S. higher education institutions from international students reached approximately $41 billion in the 2018–19 academic year and climbed to a record $43.8 billion in 2023–24 — a sum exceeding the combined value of U.S. soybean and corn exports that year (roughly $38.4 billion, per the USDA) [26]. That revenue then fell to $42.9 billion in 2024–25, the first year-over-year decline since the pandemic [12] [25]. International students also contribute disproportionately to U.S. innovation: graduate-level international students are associated with increased patent applications and grants to U.S. universities and other research institutions. One study estimated that these students added more than $2 billion in value to the United States between 1965 and 2001. And immigrants who entered as international students exceed U.S.-born workers overall in their contributions to innovation and patenting and are on par with similarly highly educated U.S.-born STEM workers [16][24].

The implication for the immigration policies described in this brief is direct. The travel ban, the H-1B fee, the duration-of-status proposal, and OPT contraction all reduce the flow of full-tuition-paying international students. The lost revenue is not merely a balance-sheet harm to institutions; it is a contraction of the cross-subsidy that has historically allowed U.S. colleges to enroll more American students at lower net prices than they could otherwise sustain. The downstream effect — fewer seats for American students, higher net prices, or both — is the inverse of the policy outcome that restrictionist arguments assume.

A Regional Synthesis: What Immigration Policy Means for Greater Philadelphia's Talent Pipeline

The cross-subsidy mechanism described above is the lens through which the regional impact comes into focus. Penn, Drexel, and Temple together enroll more than 11,000 international students paying near-sticker tuition — Drexel's published international undergraduate rate exceeds $81,000 per year, and Penn's is among the nation's highest — and that revenue funds the institutional aid pool from which domestic students are subsidized. NAFSA's documented 17% decline in new international student enrollment for fall 2025, equating to an estimated $53.3 million Pennsylvania-specific loss [13], translates into a measurable contraction of that aid pool at exactly the moment PL119-21 (aka “OBBBA”) is constricting students' federal aid options. American students in the region are therefore losing access on two fronts at once: federal financing on the demand side and institutional cross-subsidy on the supply side.

Two further risks compound this access squeeze. First is a research and innovation risk: foreign-born scholars produce a large portion of publications at leading research universities, and STEM PhDs going to foreign-born students account for two of every five doctorates awarded regionally [4]. Travel bans, OPT contraction, and visa-processing delays compress the input side of the regional research pipeline; the H-1B fee and weighted lottery compress the output side — making it both harder for talent to arrive and harder for it to remain. Second is a convergence risk with the federal aid restructuring described in the previous Leading Indicator: Greater Philadelphia talent pipeline — its medical schools, STEM doctoral programs, biotech labs, and teaching hospitals — depends on both domestic and international flows. Compression on both sides simultaneously is a structural threat that the region's "eds and meds" economy has not faced in modern memory.

Beyond enrollment impacts, the policy environment is also increasing operational uncertainty for employers, workforce intermediaries, and HR departments attempting to recruit and retain international students and graduates. The complexity and rapid evolution of these rules create compliance and administrative burdens, particularly for smaller employers with limited immigration-law expertise. In this context, employer-support infrastructure — including clearer guidance around work authorization pathways, hiring compliance, and international talent retention — becomes an important part of regional workforce resilience. The Economy League is currently exploring an employer-facing HR toolkit intended to help reduce these information barriers and support more confident, compliant hiring of foreign-born talent.

Caveats and Limitations

This brief reflects federal immigration policy as of April 2026. Several major rules — the duration-of-status final rule (now under review by the Office of Management and Budget), the OPT regulatory review, the prevailing-wage rule, and possible additions to the travel ban list under the 180-day review cycle — remain unresolved, and litigation is active across multiple fronts (including AAUP v. Rubio and the Presidents' Alliance SEVIS challenge) [15]. Enrollment data for fall 2026 will not be available until late 2026. Projections regarding economic impact and talent pipeline effects rest on possible behavioral responses by students, institutions, and employers rather than randomized evidence; the true magnitudes could be larger or smaller than described.

References

[1] Bound, J., & Turner, S. (2007). Cohort Crowding: How Resources Affect Collegiate Attainment. Journal of Public Economics, 91(5–6), 877–899. https://www.sciencedirect.com/science/article/pii/S0047272706001137

[2] Chen, M. (2021). The Impact of International Students on US Colleges: Higher Education as a Service Export (EdWorkingPaper No. 21-405). Annenberg Institute at Brown University. https://www.edworkingpapers.com/ai21-405

[3] Congressional Research Service. (2024). Optional Practical Training (OPT) for Foreign Students in the United States (IF12631). https://www.congress.gov/crs-product/IF12631

[4] Economy League of Greater Philadelphia. (2025, November 20). Higher Education and the Innovation Pipeline: How Visa Restrictions and Declining International PhD Admissions Threaten Philadelphia's Economic Future. https://www.economyleague.org/resources/higher-education-and-innovation-pipeline-how-visa-restrictions-and-declining

[5] FWD.us. (2026, March 19). Keep Innovators in America Act — Priority Bill Spotlight. https://www.fwd.us/news/opt-bill/

[6] Georgetown University, Office of Global Services. (2026, March). U.S. Immigration Policy & Regulatory Updates. https://internationalservices.georgetown.edu/immigration-updates/

[7] Higher Ed Dive. (2026, February 17). International enrollment is under pressure. How can colleges respond? https://www.highereddive.com/news/international-enrollment-under-pressure-what-colleges-can-do/812258/

[8] Higher Ed Immigration Portal (Presidents' Alliance on Higher Education and Immigration). (2025–2026). Federal Policies: International Students and Other Visa-Holders. https://www.higheredimmigrationportal.org/national/federal-policies/international-students-scholars/

[9] Inside Higher Ed. (2025, August 5). International Student Enrollment Could Drop 15% by Fall. https://www.insidehighered.com/news/global/international-students-us/2025/08/05/international-student-enrollment-could-drop-15

[10] Inside Higher Ed. (2026, April 11). F-1 Student Visa Refusals Surged in 2025. https://www.insidehighered.com/news/global/international-students-us/2026/04/11/f-1-student-visa-refusals-surged-2025

[11] Liccardo, S. (U.S. Representative). (2026, April 2). Trump is threatening international students, and a new bill could help stop him (citing reporting in Forbes and The Verge). https://liccardo.house.gov/media/in-the-news/trump-threatening-international-students-and-new-bill-could-help-stop-him

[12] NAFSA: Association of International Educators. (2025, August 8). Fall 2025 International Student Enrollment Outlook and Economic Impact. https://www.nafsa.org/fall-2025-international-student-enrollment-outlook-and-economic-impact

[13] NAFSA: Association of International Educators. (2025, November 2). Updated Economic Analysis: Fall 2025 International Student Enrollment Decline Reveals Drop of $1.1 Billion and Nearly 23,000 Jobs. https://www.nafsa.org/sites/default/files/media/document/Fall%202025%20International%20Student%20Enrollment%20Snapshot%20Economic%20Impact%20Overview%20FINAL.pdf

[14] The Philadelphia Inquirer. (2025, May 30). As Trump targets international students, here's who it could affect in the Philly region. https://www.inquirer.com/education/trump-targets-international-students-colleges-universities-drexel-temple-penn-state-20250530.html

[15] Presidents' Alliance on Higher Education and Immigration. (2025–2026). Latest Developments Impacting International Students and Scholars. https://www.presidentsalliance.org/directories-2-directories-international-students/

[16] Shih, K. (2017). Do International Students Crowd-Out or Cross-Subsidize Americans in Higher Education? Journal of Public Economics, 156, 170–184. https://www.sciencedirect.com/science/article/pii/S0047272717301676

[17] Shorelight. (2025). Student Visas Decline After U.S. Interview Pause (analysis of U.S. Department of State Monthly Nonimmigrant Visa Issuance Statistics). https://shorelight.com/news-and-insights/summer-visa-issuances-declined

[18] Technical.ly. (2023, June 8). What does college graduate retention look like in the Philadelphia region? https://technical.ly/professional-development/college-graduate-retention-philadelphia-computer-science-international-students/

[19] University of California, Davis, Services for International Students and Scholars. (2026). Federal Government Updates for International Students and Scholars. https://siss.ucdavis.edu/news/federal-government-updates-international-students-and-scholars

[20] U.S. Citizenship and Immigration Services. (2026, January 30). Optional Practical Training Extension for STEM Students (STEM OPT). https://www.uscis.gov/working-in-the-united-states/students-and-exchange-visitors/optional-practical-training-extension-for-stem-students-stem-opt

[21] U.S. Department of Homeland Security. (2025, August 27). Trump Administration Proposes New Rule To End Foreign Student Visa Abuse. https://www.dhs.gov/news/2025/08/27/trump-administration-proposes-new-rule-end-foreign-student-visa-abuse

[22] Washington University in St. Louis, Office for International Students & Scholars. (2026, March 16). U.S. Immigration Updates: What You Need to Know (consolidating Proclamations and Department of State announcements). https://oiss.washu.edu/immigration-updates/

[23] Yale University, Office of International Students & Scholars. (2026). Recent Immigration Actions and Updates. https://oiss.yale.edu/immigration/immigration-changes

[24] Zhu, J. (2025, December 9). Comparative Immigration Policies and the Resource Effects of International Students in U.S. Higher Education (CHEPS Working Paper No. 20251202). Center for Higher Education Policy Studies, San Diego State University. https://cheps.sdsu.edu/_resources/docs/working-papers/cheps-wp-20251202.pdf

[25] NAFSA: Association of International Educators. (2024, November 18). International Students Contribute Record-breaking Level of Spending and 378,000 Jobs to the U.S. Economy. https://www.nafsa.org/about/about-nafsa/international-students-contribute-record-breaking-level-spending-and-378000-jobs

[26] U.S. Department of Agriculture, Foreign Agricultural Service. (2025). 2024 U.S. agricultural export yearbook. https://www.fas.usda.gov/sites/default/files/2025-05/2024-Final.pdf