Grassley Examines Lax Oversight of ‘Visa Mills’ Offering Visas to Foreign Students
WASHINGTON – Senate Judiciary Committee Chairman Chuck Grassley is seeking information on a federal program that allows private institutions to manage visas for foreign students seeking enrollment in a U.S.-based school with limited oversight. The program is susceptible to abuse by entities that pose as education institutions in order to secure visas for tuition-paying foreign students. Those students are then able to obtain work permits, and are exempted from payroll tax requirements.
The Student and Exchange Visitor Program allows “designated school officials” to help foreign students obtain certain three-year “practical training” work visas. However, some institutions offer little, if any, educational opportunities to tuition-paying foreign students seeking work opportunities. These “visa mills” profit from the foreign student tuition and face little governmental oversight when issuing work visas under the program, which is not available to American students. Employers also benefit from hiring foreign student over American workers, as neither the employer nor the foreign students is required to pay payroll taxes for the work.
“Given all of these financial incentives – for students, schools and employers – it’s unsurprising that foreign student enrollment has exploded, while recent American grads are un- or under-employed. Unfortunately, our government has delegated much of the authority surrounding foreign student employment to the very individuals and entities that benefit the most, schools and school officials,” Grassley said in a letter to Homeland Security Secretary Kirstjen Nielsen.
The program creates a perverse incentive for the foreign students, the schools that recruit them and the employers that hire them, all of whom benefit from the program at the expense of American workers and taxpayers. There is no cap for the number of foreign students who can enroll in the program.
Foreign students contribute to a growing population of non-immigrants who overstay their visas. In 2016, more than 79,000 foreign students overstayed their visas – an overstay rate nearly three times greater than that of the general non-immigrant visa population.
Full text of Grassley’s letter follows:
March 22, 2018
VIA ELECTRONIC TRANSMISSION
The Honorable Kirstjen Nielsen
U.S. Department of Homeland Security
Washington, D.C. 20528
Dear Secretary Nielsen:
I am writing to request information regarding the Department’s Student and Exchange Visitor Program (SEVP), and enforcement of regulations that prevent spurious businesses from posing as institutions of higher learning. Some of these businesses appear to be taking advantage of the fact that the U.S. government permits privately employed “Designated School Officials,” over whom we have limited oversight, to authorize the issuance of student visas and approve foreign students to work in the U.S.
While many reputable colleges and universities enroll foreign students, dozens of questionable schools appear to be operating “visa mills” that provide little or no educational benefit to those who pay tuition, instead acting as surreptitious employment agencies for aliens seeking to work in the United States. These institutions, many of which operate as section 501(c)(3) (tax exempt) educational institutions, are costing American workers millions of dollars in lost taxes and employment opportunities, and contribute disproportionately to the large and growing population of foreign students and exchange visitors—nearly 80,000 in 2016—who overstay visas to remain in the United States without legal authorization. They also raise serious national security concerns.
Foreign Students Present a Growing Overstay Concern
The size of the overstay population is growing, and students overstay at a much higher rate than other non-immigrant visitors. In 2017 DHS reported that “[o]f the 1,457,556 student and exchange visitors scheduled to complete their program in the United States in FY16, 79,818 stayed beyond their authorized window for departure, resulting in a 5.48 percent overstay rate” (compared to less than 2 percent for the general non-immigrant population). Of the 79,818 student overstays at the time of the report, 40,949 were suspected “in-country” overstays, that is, 2.81 percent of the 2016 departing student population was presumed to have remained, unlawfully, in the United States.
The System Perversely Rewards Those Who Recruit and Hire Foreign Students
Given the growing overstay problem, we should be imposing tighter restrictions on foreign students who apply to U.S. schools. Instead, successive administrations have expanded paid “practical training” programs—effectively entry level career placement, but not available to U.S. students—which give an unlimited number of foreign students access to the U.S. job market. Ostensibly, these training programs are tied to the course of study, but with careful planning, students can leverage “Curricular Practical Training” (CPT) and “Optional Practical Training” (OPT) to work in the United States for more than a decade. As a result, the population has exploded with more than a quarter million foreign students working in one of these government-approved, alien-only, paid “training” programs, as of August 2017.
These employment opportunities generate a huge draw for foreign students. For many aliens, U.S. wages outstrip home country earning potential by an order of magnitude, and paying relatively modest tuition and fees in exchange for the opportunity to net tens or hundreds of thousands in salary is an easy trade-off. Some applicants will do whatever it takes to get a student visa, and, as one put it: “I saw almost all (99.99%) students from India came here for one primary goal: Get a job and earn money in a short span.” Once here, many visa mill students will take their chances and overstay, remaining for as long as possible to maximize profit.
Schools are exploiting the lure of employment opportunities as well, to maximize revenues, because foreign students pay full tuition—up to “two or three times as much as local students.” To capitalize on this windfall, many schools actively recruit foreign students with promises of U.S. employment, and some have gone so far as to reclassify programs so that foreign students qualify for extended work authorization. For example, Pomona College, Williams College, Yale, and MIT all recently reclassified their Economics programs so that they qualify for the Department of Education’s “STEM” designation, because foreign students in STEM fields can work in the U.S. for three years or more after graduation.
Of greater concern is the obvious manipulation of the system by suspect educational institutions. For example, Stratford University—a nearly unknown visa mill in Northern Virginia that is reported to have 3,300 students on 4 campuses—has approved more foreign students for OPT STEM extensions than all Ivy League schools combined. It appears that Stratford and many similar schools operate in large part as a way for foreign students to sign up for OPT and CPT.
U.S. employers who hire foreign students also reap a windfall, because they are exempted from payroll taxes—a cost savings of around 8 percent per student-employee. Some schools actually promote foreign students to the business community, for this reason. Employers who hire new U.S. grads, however, receive no such tax break—creating a perverse incentive to hire foreigners rather than newly graduated Americans.
Given all of these financial incentives—for students, schools, and employers—it’s unsurprising that foreign student enrollment has exploded, while recent American grads are un- or under-employed. Unfortunately, our government has delegated much of the authority surrounding foreign student employment to the very individuals and entities that benefit the most—schools and school officials.
Schools Standing to Profit Are the Ones Who Approve Student Employment
A school must be certified by SEVP, before “Designated School Officials” (DSOs) are free to issue the form I-20, which permits an alien to apply for a student visa, or to approve students for OPT and CPT employment programs. DSOs are also responsible for entering information about the student into the SEVP tracking system, for example, reporting whether the student actually arrived at school and enrolled for classes.
Prospective students take their DSO-issued I-20 form to a U.S. embassy or consulate and apply for a visa. Consular officers and Customs and Border Protection (CBP) officials at the port of entry ordinarily rely on SEVP’s determination that the “school is a bona fide, established institution of learning which possesses the necessary facilities, personnel, and finances to conduct instruction in recognized courses of study.” In short, once a school is SEVP-certified, the rest of the U.S. government recognizes its legitimacy for the purposes of accepting foreign students.
DSOs recommend students for “practical training” employment by entering a request in the Student and Exchange Visitor Information System (SEVIS), after which a student must file a request for employment authorization from U.S. Citizenship and Immigration services (USCIS). CPT authorization is employer specific—the student must have an offer in hand—but a DSO can recommend a student for OPT before the student has located a position, and thus, without knowing the details of the job. For both programs, the work must be “directly related” to the student’s major area of study.
Schools Under Investigation Continue Enrolling Foreign Students
Several schools that exhibit the suspect characteristics of likely visa mills nonetheless retain SEVP certification,  and continue to issue I-20s and approve student employment. Publicly available information regarding enforcement actions suggests that school decertification, when it does happen, is a slow process. For example, in the case of Herguan University, the school’s Principal DSO, Jerry Wang, was indicted on July 24, 2012, for conspiring to commit visa fraud and creating false documentation in support of the school’s SEVP certification application (among other offenses). These activities surely called Herguan’s authority to issue I-20s into question, but it was not until almost three years later, on March 31, 2015, that SEVP finally withdrew Herguan’s certification—just shortly before Jerry Wang pled guilty on April 9, 2015. Herguan’s appeal of the SEVP action was effectively denied in December, 2016.
Another school, Tri-Valley University (TVU), was certified to admit 30 foreign students in 2009 but by May 2010—when ICE began an investigation—had enrolled 939. The next fall, Tri-Valley had 1,555 foreign students, before the school was shuttered due to an astonishing list of criminal activity by the school’s founder, Susan Su. TVU “students” reportedly took no classes, but exchanged tuition and fees for I-20s and work approval. After closure, hundreds of TVU students were, mystifyingly, permitted to transfer to other schools.
Other Highly Suspect Schools Continue to Bring Foreign Students to the United States
Dozens of suspect schools continue to operate, bringing thousands of foreign students to the United States every year. A small but representative handful are listed below. Despite documented harms to the U.S., and real reason for concern regarding the institutions’ actual purpose, these schools continue to churn out I-20s and work approvals:
Against this backdrop, I am trying to understand what DHS, ICE, and SEVP are doing to eliminate visa mills, protect U.S. graduates, and combat student visa overstays. To assist with this oversight, please respond to the following questions by April 13, 2018:
Thank you in advance for your cooperation with this request. If you have any questions, please contact Brad Watts or Katherine Nikas of my Judiciary Committee staff at (202) 224-5225.
Charles E. Grassley
Committee on the Judiciary
Cc: The Honorable Elizabeth DeVos
U.S. Department of Education
The Honorable Rex Tillerson
U.S. Department of State
 Any educational institution that encourages and facilitates fraudulent entry into the United States is ripe for exploitation by those who seek to do harm. Student visas have raised national security concerns since one of the 9/11 hijackers, and the Christmas Day bomber, traveled here on student visas.
 Warren, Robert, and Kerwin, Donald, Center for Migration Studies, “Since 2007 Visa Overstays have Outnumbered Undocumented Border Crossers by a Half Million, Executive Summary,” available at http://cmsny.org/publications/jmhs-visa-overstays-border-wall/. According to the Center for Migration Studies, in 2014, of the 11 million unauthorized immigrants in this country approximately 42 percent—or 4.5 million—have overstayed the time granted them by DHS, to remain here. This same report found that from 2007 to 2014, more of the unauthorized immigration population had originally arrived legally, either on a visa or through other legal means of entry, rather than through “entry without inspection.” This trend peaked in 2014 and has held true ever since, with overstays accounting for 66 percent of all new unauthorized immigrants in 2014 and beyond.
 See “Fiscal Year 2016 Entry/Exit Overstay Report, Executive Summary” available at https://www.dhs.gov/imo/media/doc/publications/Entry%20and%20Exit%20Overstay%20Report%2C%20Fiscal%20Year%202016.pdf.
 ICE, “Practical Training,” available at https://www.ice.gov/sevis/practical-training.
 USCIS, “Foreign Students,” available at https://www.uscis.gov/i-9-central/complete-correct-form-i-9/complete-section-1-employee-information-and-attestation/foreign-students; see also 8 CFR § 214.2(f)(10)(i).
 Foreign students have long been permitted such employment but numbers historically have been small, until post-graduate employment authorization was extended to three years. See Washington Alliance of Technology Workers v. U.S. Dept. of Homeland Security, 156 F. Supp. 3d 123, 141-145 (D. D.C. Aug. 12, 2015) (describing foreign student employment programs, regulations, dating back to 1947).
 Report - Statistics provided to the U.S. Senate Committee on the Judiciary by ICE, Curricular Practical Training(CPT)/Optional Practical Training (OPT) (Aug. 18, 2017) available upon request.
 Indeed, the first two entries under “Student Benefits” on the SEVP web site are “Working in the United States” and “Training Opportunities in the United States.” See “Study in the States” available at https://studyinthestates.dhs.gov/financial-ability.
 Sukumar, Raghuram, “99.99% of Indian Students Studying in USA Want Just These Two Things,” (Feb. 8, 2015) available at https://www.happyschools.com/why-indian-students-came-to-usa/.
 Meckler, Laura, and Korn, Melissa, “Visas Issued to Foreign Students Fall, Partly Due to Trump Immigration Policy,” Wall St. Journal (Mar. 11, 2018) available at https://www.wsj.com/articles/visas-issued-to-foreign-students-fall-partly-due-to-trump-immigration-policy-1520766000.
 See Redden, Elizabeth, “Is Econ STEM?” Inside Higher Ed. (Feb. 19, 2018) available at https://www.insidehighered.com/admissions/article/2018/02/19/economics-departments-reclassify-their-programs-stem-attract-and-help.
 Id. STEM stands for Science, Technology, Engineering, and Math. DHS provides a list of “STEM Designated Degree Programs,” derived from the Department of Education’s records, available at https://www.ice.gov/imo/media/doc/Document/2016/stem-list.pdf.
 North, David, “Obscure Universities (One Now Closed) Got Far More OPTs than the Ivies,” Center for Imm. Studies (Jan. 17, 2017) available at https://cis.org/North/Obscure-Universities-One-Now-Closed-Got-Far-More-OPTs-Ivies.
 See IRS, “Social Security/Medicare and Self-Employment Tax Liability of Foreign Students, Scholars, Teachers, Researchers, and Trainees,” available at https://www.irs.gov/individuals/international-taxpayers/foreign-student-liability-for-social-security-and-medicare-taxes.
 See, e.g., San Francisco State University, “What Employers Should Know About Hiring International Students,” available at https://www.sfsu.edu/~sicc/documents/handouts/employers/HiringIntlStudents.pdf (“In fact, a company may save money by hiring international students because the majority of them are exempt from Social Security (FICA) and Medicare tax requirements.”).
 See Mathews, Steve, “College Grads Stuck With Low Wages as U.S. Hiring Heats Up,” Bloomberg (Apr. 6, 2017) available at https://www.bloomberg.com/news/articles/2017-04-06/college-grads-stuck-with-low-wages-as-hiring-in-u-s-heats-up.
 Schools have two primary paths to SEVP certification. A school that is accredited by a Department of Education (USDE)-approved accrediting agency may simply apply for SEVP certification. Alternately, a school that is not accredited by a federally approved accrediting agency may request certification based on “evidence in lieu of accreditation.” See “SEVP Policy Guidance S1.2: Evidentiary Requirements for Schools Not Meeting Eligibility Criteria in 8 CFR 214.3(b) and (c)” (Oct. 28, 2016) available at https://www.ice.gov/imo/media/doc/Document/2016/pg_12_evidentiary_rqmts_schools_not_mtg_eligibility_criteria.pdf.
 In order to become a DSO, a school employee need only be nominated by the owner or head of the school; be a regularly employed member of the school administration who is located at the school, and whose compensation does not come from commissions for recruitment of foreign students and; be either a citizen or lawful permanent resident of the United States. I understand that SEVP recently instituted criminal background checks for certain DSO populations, and is developing additional security vetting procedures for those who hold these positions, which I applaud.
 U.S. Dept. of Homeland Security, “Study in the States – Getting Started with SEVP Certification,” available at https://studyinthestates.dhs.gov/getting-started-with-sevp-certification.
 Students who wish to work must also obtain an employment authorization document (EAD) from USCIS.
 DHS/ICE, “SEVIS Reporting Requirements for Designated School Officials,” available at https://www.ice.gov/sevis/dso-requirements.
 U.S. Dept. of State, Foreign Affairs Manual (FAM) § 9 FAM 402.5-5(H)(1)(c).
 See generally, DHS, “F/M Student Employment,” available at https://studyinthestates.dhs.gov/sevis-help-hub/student-records/fm-student-employment.
 These include: small campuses, often privately owned, with high numbers of foreign students, and a very high percentage of students participating in CPT or OPT.
 SEVP provides a school search tool at: https://studyinthestates.dhs.gov/school-search. A quick search for problematic schools mentioned in this letter shows that Northwestern Polytechnic University, Silicon Valley University, Virginia International University, and the ambitiously named University of North America (located in Vienna, Virginia), are all currently approved to issue I-20s and approve student employment.
 See, e.g., North, David, “The Dregs of Higher Education Damage Our Immigration System,” (Sept. 11, 2017) available at https://cis.org/Report/Dregs-Higher-Education-Damage-Our-Immigration-System.
 See generally, INDICTMENT CR-12-581 (N.D. Cal July 24, 2012) available at https://www.justice.gov/archive/usao/can/news/2012/docs/Jerry%20Wang%20Indictment.pdf.
 See Herguan University v. ICE, 16-cv-06656, Dkt. No. 17 at 3 (N.D. Cal. Dec. 2 2016). ICE actually withdrew Herguan’s certification briefly in 2012, after Herguan sent a response to the Notice of Intent to Withdraw to the wrong email address, but ICE subsequently reinstated the certification and took no further action for almost three more years.
 ICE Newsroom, “President of Bay Area University Convicted in Student Visa Fraud Scheme” (Mar. 24, 2014) available at https://www.ice.gov/news/releases/president-bay-area-university-convicted-student-visa-fraud-scheme.
 Molinet, Jason, “Founder of phony university that bilked millions from students and filed fraudulent visas gets 16 years,” NY DailyNews (Nov. 4, 2014) available at http://www.nydailynews.com/news/crime/phony-university-founder-behind-fraudulent-visas-16-years-article-1.1999679.
 See NAFSA, “SEVP Guidance On F-1 Transfers From TVU” (Feb. 7, 2011) available at https://www.nafsa.org/Resource_Library_Assets/Regulatory_Information/SEVP_Guidance_On_F-1_Transfers_From_TVU/.
 In a slight twist, the University of Management and Technology (UMT), with locations in Northern Virginia and Beijing, strongly recruits students from the U.S. military services, as well as foreign students. The school’s activities raised such concerns that a whistleblower reported that the school, which was possibly collecting information about U.S. military technology and readiness. See Catherine Herridge, Pamela K. Browne & Cyd Upson, “Fox News Investigation: DOD-Funded School at Center of Federal Probes Over Suspected Chinese Military Ties,” Fox News (Feb. 24, 2017), available at http://www.foxnews.com/politics/2017/02/24/fox-news-investigation-dod-funded-school-at-center-federal-probes-over-suspected-chinese-military-ties.html. Like the others listed above, UMT remains on the list of schools certified to issue F-1 visas.
 Lakshman, Narayan, and Henry, Nikhila, “The American Dream and the Enigma of Departure,” The Hindu (Jan. 23, 2016) available at http://www.thehindu.com/opinion/op-ed/The-American-Dream-and-the-enigma-of-departure/article14014425.ece.
 Hensley-Clancy,Molly, “Making The Grades,” Buzzfeed (May 26, 2016) available at https://www.buzzfeed.com/mollyhensleyclancy/inside-the-school-that-abolished-the-f-and-raked-in-the-cash?utm_term=.iuV7dJZXyM#.ql3Wzb4OB8 [hereinafter “Making the Grades”].
 Hensley-Clancy, Molly and Klinekenberg, Brendan, “These Obscure Colleges Sign Up Thousands of Foreign Students With Little Oversight,” Buzzfeed, (Jan. 22, 2016) available at https://www.buzzfeed.com/mollyhensleyclancy/these-obscure-colleges-sign-up-thousands-of-foreign-students?utm_term=.axjqk3Q95Y#.yfrQEzBaWP.
 See “Accreditation,” available at http://www.stratford.edu/about/accreditation. In addition to the grammatical/typographical error (one of many on the school’s web site), Stratford University appears to be unaware that the Immigration and Naturalization Service was renamed when it was folded into the Department of Homeland Security.
 See “Accreditation and Certifications” available at http://old.uona.edu/UoNA/pub/LIT_6.asp?ctyp=LITERATURE&pcatid=0&catid=2220#.
 See DOE—Accreditation History, available at https://ope.ed.gov/accreditation/Search.aspx.
 See Press Release, available at http://old.uona.edu/UoNA/pub/news.asp?catid=3&ctxid=27819. This statement is inaccurate, as schools that offer STEM-OPT extensions must be accredited by a USDE-recognized accrediting agency, at the time the student submits the extension application. See DHS, “STEM OPT and Benefits for International Students,” available at https://www.ice.gov/sevis/acics-loss-accreditation-recognition.
 ICE Newsroom, “President of Bay Area University Convicted in Student Visa Fraud Scheme” (Mar. 24, 2014) available at https://www.ice.gov/news/releases/president-bay-area-university-convicted-student-visa-fraud-scheme.
 See “SEVIS Reporting Requirements for Designated School Officials,” available at https://www.ice.gov/sevis/dso-requirements.
 8 CFR 214.2(f)(i)(B) available at https://www.gpo.gov/fdsys/pkg/CFR-2011-title8-vol1/pdf/CFR-2011-title8-vol1-sec214-2.pdf.
 9 FAM 402.5-5(D)(1)(d)(2).