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Losing OPT Tax Exemption: What the DIGNITY Act of 2025 Means for International Students


1. Overview of the DIGNITY Act of 2025

On July 15, 2025, Representatives María Elvira Salazar (R‑FL) and Veronica Escobar (D‑TX) jointly introduced the bipartisan DIGNITY Act of 2025 (H.R. 4393). The bill aims to overhaul U.S. immigration by addressing border enforcement, dreamer status, dual‑intent visas, and work/student visa regulations.
Included is a notable provision that would remove the FICA tax exemption from international students participating in OPT


2. What’s Changing for OPT Students

Currently, F‑1 students on OPT are generally exempt from FICA taxes (Social Security at 6.2% + Medicare at 1.45%), saving both students and their employers up to 15.3% in payroll taxes.


If the DIGNITY Act passes, both the student and the employer will be required to pay FICA taxes—dramatically reducing take‑home pay and raising employment costs.


3. Financial Impact – What Does That Mean in Dollars?

  • A student earning $40,000/year would lose approximately $3,060 (7.65% for themselves and 7.65% from the employer).

  • For international students already juggling tuition, housing, and visa expenses, this could mean cutting living costs, delaying debt repayment, or foregoing investments.

  • Employers—especially startups and small businesses—may rethink hiring OPT talent due to added employment costs.




4. Broader Ripple Effects 

Universities & Enrollment

  • The U.S. has long attracted global talent with competitive benefits like the OPT tax exemption. Its removal could make other study destinations (Canada, Australia, UK) more financially attractive.

  • Declines in international enrollment could disrupt campus diversity and reduce revenue from higher out-of-state tuition.

U.S. Economy & Global Competitiveness

  • OPT students frequently fill STEM, healthcare, and tech roles. Fewer students may mean talent gaps in crucial industries.

  • It may also diminish the U.S.’s appeal as an innovation hub.

5. Why Now? Political Context

  • The DIGNITY Act includes this change under “fairness” principles, arguing that OPT students should pay the same taxes as domestic employees.

  • This perspective has gained traction within parts of the GOP; USCIS Director Joseph Edlow labeled OPT a “workaround for cheaper labor.”

  • However, academic institutions and business groups argue that this undermines the U.S.’s global leadership in higher education and innovation.

6. What Can Students, Employers, and Institutions Do?

StakeholderRecommended Actions
StudentsMonitor updates; revise budgets to account for new tax burdens; consult tax or immigration professionals.
EmployersPrepare for increased payroll costs; explore budgeting adjustments or alternative hiring strategies.
Universities & AdvocatesMobilize advocacy to preserve OPT benefits; highlight impact through public statements and coalition building.

7. What’s Next

  • The DIGNITY Act is still under congressional review—it must clear committee stages and full votes before becoming law.VisaVerge

  • Input from international students, campus groups, and industry stakeholders during hearings could shape amendments or outcomes.

Summary (TL;DR)

  • Current: OPT students are exempt from FICA tax.

  • Proposed: Remove this exemption—students and employers pay 15.3% combined.

  • Impacts: Lower student income, higher employer costs, potential decline in international enrollment.

  • Action: Stay informed, build advocacy, plan financially.








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