Firms May Save Money By Hiring Foreign Students With Military Specialties Over U.S. Citizens

Firms may be getting a savings for hiring foreign students with military specialties.

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An odd twist in immigration policies may reward U.S. firms for hiring recent foreign college graduates, even those with military specialties, over a U.S. citizen with the same qualifications.

While there has been much discussion over the highly scientific jobs that Americans may be losing out to foreigners, little has been said about military jobs—in fields like undersea warfare, combat systems engineering, and low-observable and stealth technology—or about the savings companies that employ foreign students in these positions receive.

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Employers usually do not have to pay certain taxes when employing students in the U.S. on an F-1 visa, including Social Security, Medicare and federal unemployment taxes.

As a result, companies may actually get a savings—of about 7.65 percent—for hiring a foreign student. On an average salary of about $63,000, that means companies may be saving about $100 per week for hiring a foreign student over an American one.

David North, a fellow with the conservative Center for Immigration Studies, called the policy "bizarre".

"I don't mind foreign college graduates competing with American college graduates," he said, "but it seems strange that the government is paying... to hire foreign students."

Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce, said he was not aware of the savings, but that it was very much in the weeds of tax policy.

That may be why the savings hasn't attracted much notice since May of this year, when the Department of Homeland Security (DHS) expanded the list of science, technology, engineering, and math (STEM) designated-degree programs for which foreign students were eligible.

On that list are a number of highly scientific majors, such as nanotechnology, along with a number of military majors ranging from the well-known, like counter-terrorism, to the lesser-known, like undersea warfare.

One reason military majors may be on the list is that a March 2012 report by the National Academy of Sciences found that the U.S. military was lacking workers with STEM degrees.

DHS responded to multiple requests for comment by pointing Whispers to a press release on the May STEM expansion.

It is unclear whether any companies have taken advantage of the savings since the change.

When the expansion happened, the Immigration and Customs Enforcement (ICE) said in a statement that the change was meant to "address shortages in certain high tech sectors of talented scientists."

It appears DHS may be filling the gap on military positions, too.

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  • Elizabeth Flock is a staff writer for U.S. News & World Report. You can contact her at eflock@usnews.com or follow her on Twitter and Facebook.