Public comment: Proposed $103k fee for H-1B petitions 2026

On August 25, 2026, the Department of Homeland Security published a proposed rule titled “Fee for Certain H-1B Petitions.” The rule would introduce a $103,265 fee for cap-subject H-1B petitions. 

In the public comment below, Niskanen’s Senior Policy Analyst Cecilia Esterline highlights the shortcomings of the proposal and offers alternative recommendations for addressing the issues raised in the proposal. 

Holly C. Mehringer
Senior Officer Performing the Duties of the Chief Financial Officer
Office of the Chief Financial Officer
U.S. Citizenship and Immigration Services
Department of Homeland Security

RE: DHS Docket No. USCIS-2026-0298, Fee for Certain H-1B Petitions

Dear Ms. Mehringer:

I write on behalf of the Niskanen Center to provide comments on the Department of Homeland Security (“DHS”) notice of proposed rulemaking, Fee for Certain H-1B Petitions, 8 CFR Part 106 (August 25, 2026) (“Proposed Rule”).

The Niskanen Center is a nonprofit public policy organization that advances a  vision of American governance informed by ideas from across the ideological spectrum. We advocate for a government that provides social insurance and essential public goods, fosters market competition and innovation, invests in state capacity, and does not impede productive enterprise. We are committed to the principles of liberal democracy and an open society.

We also recognize that immigration is central to the United States’ economic, civic, and cultural strength. Immigration has helped the country attract hardworking and talented individuals from around the world, driven unprecedented American innovation and dynamism, and filled critical gaps in the domestic workforce.

Our legal immigration system, however, is in need of reform. While we continue to encourage bipartisan legislation to modernize the entire American immigration system, we welcome the opportunity to comment on the proposed changes to the H-1B fee structure.

1. Shortcomings of the Proposed Rule

The Proposed Rule would introduce a $103,265 fee for cap-subject H-1B petitions. The Proposed Rule states the fee is necessary to address the funding needs of several government agencies involved in various immigration processes. The premise of the Proposed Rule is that rather than distributing the costs of lawful immigration across the many users of the system, the burden instead is centered squarely on H-1B sponsoring employers based on an “ability-to-pay principle.” The Proposed Rule then bases its revenue projections on an assumption that petitioners will pay the fee on behalf of 85,000 H-1B visa beneficiaries, resulting in an estimated annual revenue of $8.8 billion.

This assumption is not supported by the available evidence. In September 2025, President Trump issued Proclamation 10973, “Restriction on Entry of Certain Nonimmigrant Workers” which required the payment of $100,000 for any new H-1B beneficiary seeking entry to the United States.¹ Notably, changes of status to H-1B status from within the U.S. were not subject to the Proclamation. Though the $100,000 payment has since been deemed an unauthorized tax, the requirement was in place at the time of the FY 2027 lottery, so it serves as a useful test case for H-1B sponsors’ ability and willingness to pay fees of this magnitude.² 

U.S. Citizenship and Immigration Services (USCIS) received just 211,600 properly-submitted registrations for the FY 2027 cap selection.³ While demand still far exceeded the 85,000 slots available, this represents a significant decrease relative to recent trends. During the FY 2026 lottery, for instance, USCIS received 343,981 eligible registrations, nearly 63 percent more than this year.⁴ However, where the FY 2027 registrations came from is even more indicative of employers’ reluctance to pay these fees.

The White House reported that H-1B requests for consular processing, meaning those filed on behalf of beneficiaries located outside the United States, dropped by nearly 97 percent between the FY 2025 and FY 2027 cap seasons.⁵ In fact, a government attorney revealed in court proceedings that the provision “is not raising money at all” and that only “[a]bout 70 [employers] so far already paid for it[.]”⁶

Those who were outside the U.S. and who would have been required to pay the $100,000 had the largest drop in H-1B applications. Based on this, it seems highly unlikely that reintroducing the fee through regulation to apply to all cap-subject petitions in and outside the U.S. will result in full usage of the 85,000 allotted H-1B slots. Therefore, the revenue projections used throughout the Proposed Rule are ill-informed based on currently available data regarding employer behavior and will likely fall far short of projected cost recovery levels.

Beyond the fact that the revenue projections are largely overstated, the Proposed Rule’s justifications are inadequate for a fee of its size. The Proposed Rule starts by referring to the Immigration and Nationality Act (INA) which gave DHS the authority to set fees for “providing adjudication and naturalization services.” However, many of the Proposed Rule’s justifications or intended funding targets do not relate to “adjudication and naturalization services,” are largely irrelevant to the H-1B program, or include provisions that should be directed by Congress.

For instance, the Proposed Rule includes $76.2 million in allocations for Customs and Border Protection (CBP) to fund a biometric entry-exit system. While we strongly support investments in critical border technology of this nature, the entry-exit system is not a tool of adjudication, and investments in it have been, and should continue to be, directed by Congress. On June 10, 2026, President Trump signed the Secure America Act into law. Among other things, it included $3.45 billion in funding for CBP, including funding for the necessary expenses and technology required for biometric entry-exit.⁷ In 2015, Congress established the 9-11 Response and Biometric Entry-Exit Fee which directed certain H-1B and L-1 sponsors to pay a fee to help cover the costs of a biometric entry-exit system.⁸ On August 10, 2026, DHS finalized a rule that revised their interpretation of the 2015 statute to extend the fee to a much broader pool of H-1B and L-1 cases.⁹ By their estimation, the change is expected to result in additional H-1B payments in excess of $30 million per year, resulting in total payments of well over $52 million each year, just from H-1B sponsors.¹⁰ That fee, like most biometric entry-exit investments, was established by Congress, and it is Congress that should continue to determine which investments in this area are necessary and who is best to fund them.

Additionally, by the Proposed Rule’s own admission, petitioners would be required to fund “non-USCIS administered programs to which they have no connection or from which they receive no direct benefit.” This is because many of the functions the Proposed Rule tries to tie to H-1B adjudication actually have little to nothing to do with it. For example, cancellation of removal requests filed in immigration courts carry their own fees and have nothing to do with the lawful H-1B program.¹¹ It is unclear how funding them fits into the “fees for providing adjudication and naturalization services… including the costs of similar services provided without charge to asylum applicants or other immigrants” authority granted by Congress. DHS should clarify how this service qualifies or remove it from the funding structure entirely.

Finally, the Proposed Rule falls far short in its evaluation, or lack thereof, of the larger economic and fiscal impacts of the proposed fee. The Proposed Rule acknowledges that, along with other recent proposals related to the H-1B, its requirements “may affect the overall demand for employment-based immigration benefits.”¹² However, the implications of a significant drop in high-skilled immigration are not accounted for in the discussion of the Proposed Rule.

The most strategically advantageous use case for the H-1B, both for our economy and our international competitiveness, is retaining valuable foreign graduates of U.S. universities. Yet, that is not taken into account in the Proposed Rule. Past restrictions on the H-1B have resulted in declines in undergraduate enrollment by international students and declines in the quality of those who do come.¹³ Though the Proposed Rule does not directly change the quantity of available visas, it is still a meaningful restriction on the visa’s accessibility, particularly for early-career graduates.

DHS claims that the Proposed Rule could have the “indirect benefit of better protecting the wages and job opportunities of U.S. workers,” but protecting opportunities for American workers would also mean protecting educational opportunities that position Americans for success in the workforce and keeping innovation in the U.S. to maintain our international posture. Losing international students would harm both.

Research shows that increases in international student enrollment also result in increases in native enrollment. For instance, in STEM fields, every additional foreign Ph.D. recipient leads to one additional native Ph.D. recipient.¹⁴ The relationship is even stronger in programs where foreign student enrollment actually subsidizes the cost of domestic enrollment.¹⁵ Furthermore, conservative estimates suggest that even modest fluctuations in foreign STEM student enrollment and subsequent fluctuations in the STEM workforce will likely cost our economy $220-439 billion per year after 10 years.¹⁶ Concerningly, these calculations appear nowhere in the Proposed Rule. We urge DHS to consider and address these concerns fully.

2. Alternative Recommendations

What is most evident from the Proposed Rule is that DHS is trying to take on more than it is equipped to handle. The original $100,000 proclamation issued by President Trump focused squarely on substantive problems the administration associates with the H-1B– be they fraud, exploitation, or wage suppression. The Proposed Rule, on the other hand, suggests that any protective benefit is secondary only to the cost recovery value provided by the proposed fee.

However, both of those objectives are better addressed through legislation. As stated previously, the cost recovery estimates of the rule are unrealistic, and true reform of the H-1B, or any employment-based visa program, requires Congressional action to meaningfully improve the guardrails, oversight, and requirements of the program.

Congress can change who is eligible, what they must do to qualify, and how they are monitored once they are here. By contrast, this exorbitant fee will not block bad actors from exploiting the program’s shortcomings. Instead, it will just select the bad actors who are willing to pay without meaningfully improving the recruitment or wage protections for American workers.

In one survey of corporate immigration sponsors, 68 percent reported that they expected to turn to nearshoring or offshoring in response to immigration barriers.¹⁷ If jobs leave the U.S., taking their tax revenue and innovative contributions with them, they are often not replaced with American jobs. Instead, the U.S. simply misses out on any contributions we could have had otherwise. Reforms created by Congress, though, could address the H-1B’s problems without disrupting legitimate high-skilled labor flows.

Cost recovery would also be more efficient if done through legislation. For example, the Proposed Rule suggests that $95.5 million in funding would be allocated to recover costs associated with Permanent Labor Certification (PERM) processing at the Department of Labor (DOL). We strongly agree that the PERM process needs a better funding structure, and nearly every presidential budget since FY 2005 has also agreed and has asked Congress to give DOL the authority to collect fees for the PERM process.¹⁸ Congress should extend that authority and introduce a premium processing fee for expedited review at the PERM review stage. Modest fees far lower than the fee in the Proposed Rule could be levied directly on users of the system while also ensuring that the funds actually go where they are needed.

These are just a few examples of how Congress is best suited to address the concerns raised by the Proposed Rule. As such, DHS should withdraw the Proposed Rule and instead allow and encourage Congress to take substantive action to improve the H-1B and all immigration-related cost recovery strategies.

***

In conclusion, the Proposed Rule does not meaningfully address legitimate concerns related to the impacts of its provisions and generously overstates the cost recovery benefits of it. The reality is that the rule has the potential to harm American workers without offering any actual program reform, and its impacts would likely be most severe as a result of lowered international student enrollment and retention rates, neither of which are addressed by the Proposed Rule’s discussion.

Rather than enacting this exorbitant fee, DHS should withdraw the Proposed Rule and defer to Congress for the implementation of durable, structural fixes to the H-1B program and immigration revenue generation.

Thank you for your consideration and the opportunity to provide feedback on the Proposed Rule. If you have any questions or need additional information, please do not hesitate to contact me at cesterline@niskanencenter.org.

Sincerely,
Cecilia Esterline
Senior Immigration Policy Analyst

1. See U.S. Citizenship and Immigration Services, “H-1B Specialty Occupations,” https://www.uscis.gov/working-in-the-united-states/h-1b-specialty-occupations (clarifying effects of Proclamation 10973), ↩︎
2. California v. Mullin, 833 F. Supp. 3d 50 (D. Mass. 2026); California v. Mullin, 183 F.4th 42 (1st Cir. 2026) (denying motion to stay). ↩︎
3. “United States: H-1B Cap Is Reached for FY 2027,” Fragomen, July 17, 2026, https://www.fragomen.com/insights/united-states-h-1b-cap-is-reached-for-fy-2027.html. ↩︎
4. U.S. Citizenship and Immigration Services, “H-1B Electronic Registration Process,” https://www.uscis.gov/working-in-the-united-states/temporary-workers/h-1b-specialty-occupations/h-1b-electronic-registration-process. ↩︎
5. White House, “Restriction on Entry of Certain Nonimmigrant Workers,” Proclamation, September 18, 2026, https://www.whitehouse.gov/presidential-actions/2026/09/restriction-on-entry-of-certain-nonimmigrant-workers-faad/. ↩︎
6. Transcript of Oral Argument at 30, Global Nurse Force v. Trump, 4:25-cv-08454-HSG (N.D. Cal. Feb. 27, 2026). ↩︎
7. S. 2, 119th Cong. (2026), https://www.congress.gov/bill/119th-congress/senate-bill/2. ↩︎
8. Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, 129 Stat. 2242 (2015), https://www.govinfo.gov/content/pkg/PLAW-114publ113/pdf/PLAW-114publ113.pdf. ↩︎
9. U.S. Department of Homeland Security, “9-11 Response and Biometric Entry-Exit Fee for H-1B and L-1 Visas,” Federal Register 91, no. 153 (August 10, 2026): 65432, https://www.federalregister.gov/documents/2026/08/10/2026-16231/9-11-response-and-biometric-entry-exit-fee-for-h-1b-and-l-1-visas. ↩︎
10. Ibid. ↩︎
11. U.S. Department of Justice, Executive Office for Immigration Review, “EOIR Forms,” https://www.justice.gov/eoir/eoir-forms. ↩︎
12. Such as Employment and Training Administration, “Improving Wage Protections for the Temporary and Permanent Employment of Certain Foreign Nationals in the United States,” Federal Register 91, no. 60 (March 27, 2026): 15454–501, https://www.federalregister.gov/documents/2026/03/27/2026-06017/improving-wage-protections-for-the-temporary-and-permanent-employment-of-certain-foreign-nationals. ↩︎
13. Kevin Shih, “Labor Market Openness, H-1B Visa Policy, and the Scale of International Student Enrollment in the United States,” Economic Inquiry (2015), ResearchGate, https://www.researchgate.net/publication/281521597_labor_market_openness_H-1B_visa_policy_and_the_scale_of_international_student_enrollment_in_the_United_States.; Takao Kato & Chad Sparber, 2013. “Quotas and Quality: The Effect of H-1B Visa Restrictions on the Pool of Prospective Undergraduate Students from Abroad,” The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 109-126, March, https://ideas.repec.org/a/tpr/restat/v95y2013i1p109-126.html. ↩︎
14. Ibid. ↩︎
15. Ibid. ↩︎
16. Michael Clemens and Jeremy Neufeld, “The Economic Impact of High-Skilled Immigration Restrictions” (working paper, Institute for Progress, September 28, 2025), https://ifp.org/wp-content/uploads/Clemens-Neufeld-Nice-9-28-25.pdf. ↩︎
17. “US Corporate Immigration Trends,” Envoy Global, 2026, https://www.envoyglobal.com/insight/us-corporate-immigration-trends/. ↩︎
18. U.S. Office of Management and Budget, Budget of the United States Government, Fiscal Year 2005 (Washington, DC: Government Printing Office, 2004), 234, Federal Reserve Bank of St. Louis, FRASER, https://fraser.stlouisfed.org/title/budget-united-states-government-54/fiscal-year-2005-19051?page=234. ↩︎