Written by: Joel Butterly, Cofounder & CEO, InGenius Prep
H-1B, Trump’s $100,000 Fee, and What International Students Should Do Next
If you’ve glanced at the headlines lately, you’ve probably seen the latest bit of political theater: the Trump administration wants to slap a $100,000 fee on companies sponsoring H-1B visas. It sounds catastrophic, and if you’re an international student or a company that hires them, you may be panicking.
But here’s the reality: this is less about policy and more about politics. Like so many of Trump’s moves, it’s designed to generate headlines, stoke fear, and then quietly fizzle once the courts weigh in. Let’s break this down—what H-1B visas actually are, why they matter, what Trump’s proclamation really says, whether it’s even legal, and what alternative visas foreign nationals could use to work legally in the US.
1) What is an H-1B visa?
The H-1B visa is the most important U.S. work visa for skilled professionals in “specialty occupations,” including:
Software engineers
Data scientists
Researchers
Finance and consulting professionals
Unlike OPT or STEM OPT, which grant temporary work authorization to international graduates, the H-1B is a true work visa:
Issued in 3-year increments
Renewable once (with some exceptions)
Often a pathway to a green card or permanent residency
2) Why do H-1B visas matter?
Every year, 85,000 new H-1B slots open: 65,000 in the regular pool, plus 20,000 reserved for U.S. master’s degree holders. That’s the official “cap.” But in practice, the total number of H-1B approvals each year—once you include renewals, transfers, and extensions—runs into the hundreds of thousands.
Top employers of H-1B workers include:
Amazon (~10,000 approvals in 2025)
Tata Consultancy Services (~5,500)
Microsoft (~5,200)
In short, most H-1B’s are going to individuals in the tech, finance, or consulting industries.
Below is the chart of Top H-1B Employers (2025):
This is not some niche program. The H-1B is a central artery of the U.S. labor market and innovation ecosystem, and is crucial to the U.S. economy. Here’s what the numbers say:
- Immigrant inventors, many of whom are, or have been on H-1B visas, generate about 25% of the total patent value created at U.S. public firms. Numerous tech titans have used H-1B visas to work in the U.S., including Sundar Pichai (CEO, Google/Alphabet), Elon Musk (Tesla, SpaceX), and Satya Nadella (CEO, Microsoft). Just these three companies represent a staggering 12.8% of the entire U.S. stock market.
- More innovation: H-1B employment correlates at ρ≈0.89 with state-level patenting. Translation: more H-1B’s = more patents, and more innovation.
- Firm growth: Companies that perform well in the H-1B lottery grow and scale faster, have greater revenue growth, last longer, and receive more funding from venture capital and private equity, compared with similar companies that do not participate in the H-1B program. Incidentally, these H-1B companies not only outcompete other firms in terms of hiring foreign workers, they also tend to hire more domestic workers, as well, suggesting a link between H-1B employment and a better labor market for American citizens.
- Offshoring: After the H-1B cap was reduced from 195,000 to 85,000 in 2004, firms reliant on H-1Bs expanded foreign offices by 27% more than their peers—especially in Canada, India, and China. This resulted in significant lost tax revenue and economic productivity in the U.S., and would be a likely consequence of Trump’s new proclamation (if it were enforceable).
- Tax revenue: Each H-1B worker reduces the federal government’s budget deficit by an average of $827,000 over their lifetime. Multiply that by one year’s cap (85,000 workers), and you’re looking at $70 billion in lost fiscal benefit per year.
- Stock market impact: in the immediate-term, implementing this proclamation would result in a rapid sell-off of key technology firms which are heavily reliant on foreign talent. Amazon alone would be facing approximately $3bn in additional fees by year three, if they were even able to hire the people they wanted. This doesn’t account for the long-term implications: reduced innovation and business leadership could negatively impact the stock market profoundly.
Bottom line: take away the H-1B program, and you stifle innovation, shrink the economy, hamper tax revenue, impede the growth of our tech and finance sectors, while also managing to reduce employment for U.S. citizens, and give our economic rivals a leg up by keeping their best and brightest at home.
3) Who Actually Uses H-1B visas?
Nationality: ~73% Indian, ~12% Chinese
Age: Average ~34 years old
Education: ~45% hold a master’s, Ph.D., or professional degree
Industry: ~66% in computer-related roles
Indian nationals are, by far, the largest recipients of H-1B visas, at about 73%. China is a distant second, at ~12%. Why? Because those two countries produce a massive share of the world’s STEM talent, and are also the two largest sources of international students at American universities.
The average age of an H-1B recipient is 34, meaning that the vast majority of recipients have been out of college (or graduate school) for a significant period of time. Roughly 45% of recipients have received a master’s, professional, or doctorate degree, ~30% have received only a bachelor’s degree, and the remainder are classified as “unknown.”
About 70% of recipients are male. Although USCIS does not release detailed data, estimates suggest the percentage of H-1B recipients that attended a U.S. university at 50% or more. Approximately 66% of all H-1B’s are granted for “computer related” positions.
Source: USCIS
4) Is the “cheap labor” narrative true?
If you were following closely, you may have heard the oft-used and rarely corroborated claim that employers use H-1B visas to hire cheaper workers, thereby allowing them to pay less by not employing American citizens. This is the same narrative used to criticize illegal immigration at our southern border – but is it valid?
No, of course not. In fact, the opposite is true – it’s actually more costly to hire H-1B employees. By law, H-1B employers must pay the higher of two wages:
1) the actual wage paid to similar employees in their company, or if no comparison exists (for small firms that don’t have many people in the same role)
2) the prevailing wage for that role in that geographic area.
Companies cannot simply hire H-1B workers for the same role as they hire American citizens, and simply pay them less. Employment doesn’t work that way, and attempting to discriminate in this way would run afoul of any number of U.S. laws, not the least of which is the Civil Rights Act of 1964. The legal liability alone would make it completely untenable for major companies to attempt to exploit foreign workers in this way.
However, unlike hiring American citizens, when employers hire and sponsor H-1B employees, they also bear the cost of the application and its associated legal fees, which often range from $10,000 – $20,000 per petition. Add to all of this the significant (70%+) rate of rejection for H-1B visas – which means you need to go and re-start your hiring process from scratch – and you get a sense of how far a company would go not to sponsor an H-1B visa.
From my own perspective, as someone who employs dozens of individuals on H-1B visas, the added cost and administrative headache (which is considerable) of sponsoring H-1B visas means employers are strongly incentivized to hire American citizens whenever possible. In short, the “cheap foreign labor” line is great politics. It’s not reality.
5) Trump’s proclamation: rumor vs. reality
There has been a lot of confusion about what Trump’s proclamation actually said. Initially, it was reported to be a $100,000 annual fee, meaning $300,000 for each H-1B applicant (assuming they do not renew for an additional three years). There were also questions about whether this would apply retroactively to existing H-1B holders, or whether leaving the country could incur a $100,000 fine.
Since Friday, at least some of these topics have been clarified. First, the $100,000 is a one-time, not annual, fee. Second, this will not apply to any current H-1B visa holders, or individuals who have already applied but not yet received their decision. It does not apply to individuals transferring their H-1B, either, or individuals on an H1-B that leave an re-enter the country.
So yes, the initial headline was scarier than the actual policy. But the perception—that the U.S. is closing its doors—does real damage all on its own.
In short:
Proposal: $100,000 fee (one-time, not annual)
Who it affects: Only future applicants (not current H-1B holders or transfers)
Legality: Almost certainly unconstitutional. Courts already struck down similar 2020 restrictions.
6) Is it legal?
No, almost certainly not. The president does not have a blank check when it comes to presidential proclamations or executive orders. Even in the most expansive interpretations of executive power, presidents don’t have the authority to unilaterally override congressional legislation or statues through a proclamation. In general, executive orders or proclamations are thought to fill a void where Congress has not already established laws – and that’s the most generous interpretation of presidential authority.
In this instance, Congress has explicitly limited presidential/executive authority to charge adjudication fees – basically processing fees – for visas such as the H-1B. Executive agencies can charge cost-recovery fees tied to processing applications. They can’t just invent a six-figure penalty designed to discourage companies from hiring legally.
Interestingly, Trump tried something similar in June 2020 when he suspended the H-1B program at the start of COVID. The reason so few news outlets have discussed this fact is because it quickly faded from memory when a court promptly overturned this order, citing that the president does not have the authority to “rewrite U.S. immigration law to micromanage the US labor market.”
Needless to say, this latest proclamation probably runs afoul of the law to an even greater extent than the 2020 order, which came amid a national emergency. My expectation is that this proclamation will go through the same process as every other Trump order targeting foreign nationals and international students in 2025: an immediate injunction, and then a few months later, a court ruling the action illegal. Trump will, of course, claim victory to his base in the interim, and will likely pay little attention to eventual adjudication of his policy.
We saw this earlier this year with student visa revocations, banning international students from Harvard, targeting Chinese international students, and expanded vetting for student visas. All big headlines. All very scary. And in the end, little to nothing changed.
7) Why would Trump do this? India.
If you’re looking for an economic justification for this latest move, you won’t find it. This move is bad in all respects for the American economy, American firms, American workers, and overall American competitiveness and innovation. So why do this?
Look no further than India – our latest opponent in the Trump’s game of “toss the tariff.” Mere months ago, when Trump was focused on China, he did the same thing: threatened Chinese students studying in the U.S. with expulsion. Somehow, what Trump fails to understand is that Indian and Chinese students and workers are not a benefit to their home country, they are a benefit to our country. If your goal is to hurt India or China, insisting that their best and brightest stay home instead of bringing their talents stateside is, frankly, idiotic. “You’ve heard of brain drain, now get ready for the talent impediment!”
Nonetheless, Trump seems to think that ruining our tech labor economy will somehow deliver a blow to India, as he did with China, and that’s his latest play. As with China, if the courts don’t get to this policy first, then geopolitics will, so you can expect a “deal” in the near future that coincides with an abandonment of this H-1B policy.
That doesn’t mean there aren’t people in Trump’s orbit – and certainly in the MAGA base – who genuinely want to do away with H-1B’s, there absolutely are. Stephen Miller, despite his dead-eyed visage seems to come alive at the topic of ridding the US of skilled foreign labor.
That said, one thing Trump cannot do is maintain popularity and power with a suffering economy for long. So regardless of what the nativists want, it’s highly unlikely that we’ll forego foreign talent anytime soon.
8) O-1 and L-1 visas: the “alternatives”
In the unlikely scenario that this proclamation remains law, and H-1B visas become prohibitively expensive, companies will look elsewhere. For this, they have two solid options:
O-1 Visa (“Extraordinary Ability”)
For researchers, entrepreneurs, and highly skilled professionals
Cost: $10,000–$15,000
High approval rate (90%+)
No annual cap
Limited to candidates who can prove extraordinary achievement
L-1 Visa (Intracompany Transfer)
For employees transferring from a foreign office (e.g., Google India → Google California)
Cost: ~$7,000
Easier for multinationals; harder for startups without global offices
The reality is that foreign nationals should see these as last resorts. Plans A-C involve the courts stepping in and overturning Trump, or Trump abandoning this policy – as he often does – once the geopolitical landscape shifts.
The Bottom Line
H-1B visas are vital parts of the American (labor) economy. This policy makes little sense, and is almost certain to receive powerful pushback on legal, geopolitical, or economic grounds. O-1 and L-1 visas are viable alternatives, but I wouldn’t shift my visa strategy just yet.
So, if you’re a student, candidate, or company watching these headlines, here’s my advice—the same I gave international students when Trump threatened Harvard’s SEVP status: don’t panic. The courts will swat this down. The U.S. is still the top destination for global talent. The legal system can deal with this, though whether it can repair America’s image abroad remains to be seen.
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