A federal subsidy program that lets foreign students and their U.S. employers avoid payroll taxes robs Social Security and Medicare $2 billion a year, money American workers pay into the trust funds for the elderly, according to a new report.
The little reported on Optional Practical Training program also effectively sets aside 240,000 high-income jobs for immigrants, according to the Center for Immigration Studies, which has been detailing taxpayer-funded subsidy programs for immigrants that also benefit U.S. firms.
“Doling out the subsidies is the Optional Practical Training (OPT) program; the subsidy takes the form of exempting both the foreign worker and the employer from paying payroll tax, based on the fiction that the workers are still students. We estimated earlier this year that 240,000 aliens’ jobs were subsidized by this program, and it reduced payments to the Social Security and Medicare trust funds by $2 billion a year,” wrote CIS’ David North, a former Labor Department official with expertise in immigration laws.
His report comes, he said, after the data was “pried out” the Department of Homeland Security.
He wrote about the number of schools that have students in OPT, including one — Northwestern Polytechnic University, of Fremont, Calif. — that has been accused of giving degrees away and whose students and the business that hire them are granted payroll tax breaks of $48 million.
There are two forms of OPT, according to Citizenship and Immigration Services: Pre-completion OPT (for those who have been lawfully enrolled on a full-time basis for one full academic year at a collegiate level) and post-completion OPT (for those who have completed their studies).
“If you are authorized for post-completion OPT, you may work part time (20 hours or less per week) or full time,” CIS says on its website.
There are over 100 schools in the OPT program. North said the program is aimed at helping current immigrant students, but many are no longer students. North wrote, “The DHS agency in charge, the sleepy Student and Exchange Visitor Program (SEVP), describes the population as ‘Students with OPT Authorization,’ although nearly all of them are alumni, not students.”
