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Impact of Changing U.S. Immigration Policies on International Students

Since the election of Donald Trump as President of the U.S., several parents in India have asked us a number of questions around the impact of the Trump Presidency on International students’ ability to go to the U.S. for higher studies and their subsequent employment prospects.

Below is our assessment, based on Stoodnt’s U.S. team’s discussions with university officials, assessment of news reports and years of experience in living and working in the US and advising students.

1) Will U.S. immigration policy impact International students going to U.S. for higher studies?

Student visas are not at issue in the discussions and debates over immigration. As such, there will likely be zero to minimal impact on the ability of students to get visas to go to the US for higher studies so long as the usual requirements to get a visa have been met, such as admission to a recognized university and demonstrated availability of funds (own funds, loans, scholarships).

The U.S. Government wants to ensure that students admitted to U.S. universities do not become a burden on the State and that they can demonstrate that they have the resources to fund their education and living expenses while a student. These resources could be their own (or more likely, their parents’), loans from banks or other financial institutions, or financial aid (scholarships, fellowships) from the university they have been admitted to.

2) Will U.S. immigration policy impact the ability of international students to subsequently gain employment in the U.S.?

There will likely be some impact on the ability of skilled Indian workers to get H-1B visas to work in the U.S. But this is less likely to impact Indians who have been educated in a U.S. university and are seeking employment as graduates of that institution.

A bit of background …

Since the 1960s, one major avenue for migration to the U.S. for Indian nationals was through family-sponsored immigration. This is when one family member would migrate to the U.S. either for employment or studies and then sponsor family members, normally their immediate families (spouse, children, parents, siblings).

A second route that most of us are more familiar with was through higher studies at U.S. universities which would then lead to employment on an H-1B visa, eventual permanent residency (“a Green card”) and citizenship (if desired). The stereotype of Indian immigrants as highly educated and middle-/upper middle-class professionals is in part a result of this wave of migration of Indians who went to the US initially for higher education.

A third, more recent route started in the 1990s, with the emergence of Indian IT outsourcing firms gaining recognition as a complement to large corporations’ internal IT organizations. This accelerated further in the late 1990s, thanks to the Y2K scare when many U.S. companies amped up their use of Indian IT outsourcing firms to work on Y2K projects. The credibility that they built with US firms then led to additional IT work coming their way.

This influx of Indian talent not only helped complement the U.S. technical workforce but also allowed U.S. companies to cut costs, since these workers – on H1-B visas – cost about 2/3 what a typical US IT worker would command. As a result, each year, thousands of workers from the IT industry move to the U.S. on technical projects. In several cases, this led U.S. corporations to replace higher-cost American IT workers with lower-cost Indian IT workers, typically employed by one of the many leading Indian IT firms.

President Trump wants to change this and make sure U.S. companies cannot replace American IT workers with foreign employees who are given visas to come to the US and replace American employees, but for significantly lower pay (30-40% less).

3. So, what is now likely to happen?

A bit more info about the H-1B visa program.

America issues about 85, 000 H-1B visas to foreign nationals each year.

65, 000 of these go to companies such as TCS, Wipro, Infosys, Cognizant, IBM, Accenture, etc., who are bringing workers from other countries to the US for IT-related work. A small percentage of these visas also go to innovation-driven technology companies such as Microsoft, Google, Facebook and others, who are hiring (or internally transferring from their own foreign locations) highly qualified and experienced foreign nationals.

These visas are allocated by lottery (regardless of salary) and require that employers pay a minimum salary of $60, 000 per annum to such employees.

A likely proposed change to the H1-B visa policy is to require that these visas be allocated in order of the salary being paid (higher salaries prioritized over lower salaries) rather than by lottery. As such, any company that wants to hire an H-1B worker from a foreign country has to bid up the salary they propose to pay, which will make it less profitable for them to hire someone from a foreign country on a lower wage. They will therefore be likely to hire fewer foreign nationals on the basis of cost alone.

On the other hand, innovation-driven companies such as Microsoft, Google, etc., will likely experience no such problems, as they are already hiring foreign workers based on their superior talent and paying them market-competitive salaries in the US. They will gladly pay the same salary they would pay in the US to an engineer or a programmer from India if they can’t find someone with that skillset in the U.S.

Note that NONE of the above applies to you if you are an Indian student studying in the U.S. Work visas issued to foreign students who are already in the US come from a different pool.

The remaining 20, 000 H-1B visas (of the 85, 000) that the US issues each year are to foreign graduates of US universities. This, dear parent/student, is Your child / You. Those will likely be affected positively by the proposed changes. Such workers have always been paid competitive salaries on par with other U.S. employees. U.S. employers are, in fact, forbidden by law from paying these workers less than other US-based employees.

A recent article in Wall Street supports this view (http://blogs.wsj.com/indiarealtime/2017/01/24/h-1b-visas-how-donald-trump-could-change-americas-skilled-worker-visa-rules/?mod=social_content_eng) and states:

“Among other provisions, it would require that rather than H-1Bs being awarded in lotteries, the government would be required to prioritize the top foreign students who have studied in the U.S. These would include advanced degree holders, those earning a “high wage, ” and those with “valuable skills.”

In short, if what we are reading about is correct, foreign students pursuing their education in the US could benefit from the proposed H-1B visa policy changes.

4) Should I be concerned about increasing racism in the country?

The U.S. is a country of immigrants and will continue to remain so. Today, the population of Caucasian (“white”) Americans is around 60% of the total, compared to 90%+ a century ago. White Americans are projected to become less than 50% of the population over next 30 years or so. Hispanics and Asian Americans are the fastest growing population sub-groups in the U.S. In about 38 of the largest 50 cities, non-whites are in fact a majority.

Many U.S. university campuses have 3-4x the number of International students as compared to 25 years ago. And in fact, virtually all universities are looking to increase the number of International students on their campuses

The U.S. is a very dynamic and diverse country, certainly more so than many European countries. Americans, especially in large cities and university towns, are increasingly aware of various cultures and often have someone in their family who is married to someone from another culture. Acceptance and openness to people from other cultures is far more prevalent today than it was 50 years ago when the first wave of students started coming to the U.S. for higher education.

Like in other places in the world, there will always be incidents of racism and discrimination. These incidents get amplified and easily shared in our 24×7 world of social networking and online media. However, the U.S. still continues to be one of the safest, open countries, with a majority of its citizens, universities and leaders welcoming to International students.
.
We (Stoodnt’s management team) have – between us – >75 years of living in the US. The total number of incidents of racism that we have been witness to are countable on the fingers of one hand.

5) How easy would it be for my child to get a job after graduation in U.S.?

Getting a job after graduation is highly dependent on the status of the U.S. economy, the student’s area of specialization / degree, their college’s job placement record, brand name and location, plus a student’s ability to network and reach out to companies. It is far easier to get a job in a technical area (STEM) and with a graduate degree compared than in areas such as literature, art, history etc.

In general, companies tend to hire U.S. college graduates before they go through the process of hiring a foreign citizen directly on an H-1B visa. This is a simple cost equation for them, as the process of sponsoring someone for an H-1B visa costs a few thousand dollars.

However, for scarce skillsets, many companies realize that they have to look beyond, and will have explicit policies allowing them to hire non-US nationals for jobs requiring some technical depth and analytical skills (engineering, sciences, accounting, finance, economics, etc.).

It is obviously easier for the company to file for a H-1B for a foreign student who has studied at a U.S. university compared to someone who has done all their education abroad. Companies also find that foreign born, U.S. graduated students integrate better into a U.S. work environment as he or she is familiar with the culture, work ethics and can communicate better at work.

About Author Ajay Singh

I graduated from I.I.T India and came to U.S. for higher studies in Engineering 20 years back. After working for a few years in Austin, Texas as a design engineer, I went back for a M.B.A at Harvard Business School. I have worked for number of global companies in senior leadership and management positions. Over the years I have advised number of students on college admission.

Author: Ajay Singh

Ajay is the co-founder of Stoodnt and spent 20+ years in senior leadership roles with companies such as American Express, Cendant and Intel prior to starting Stoodnt. He has a M.B.A. from Harvard, M.S. in Computer Engineering from U.T. Austin and B.Tech from I.I.T Roorkee (India).

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