How Do New H1B Restrictions Impact F-1 Students in 2026 (OPT/CPT, Cap-Gap)

A Comprehensive, Strategic Guide for International Talent and U.S. Employers

Quick Answer: Key Impacts of FY 2026 H-1B Policy Shifts on F-1 Status

The primary impact of the new H-1B restrictions 2026 is the creation of a massive financial and procedural barrier for employers, severely limiting the post-graduation visa pathway for F-1 students OPT CPT. Specifically, the $100,000 H-1B fee for new petitions (stemming from the September 19, 2025, Proclamation) and the proposed rules to implement a wage-based weighted H-1B lottery and potentially end Duration of Status (D/S) F-1 rule change combine to create unprecedented uncertainty.

The White House has introduced these changes to the H-1B program and H-1B visas with the intended goal of protecting American workers and prioritizing high skilled labor in specialty occupations.

• Cost Barrier: The $100,000 H-1B fee for new petitions filed on or after September 21, 2025, will likely cause a sharp decrease in the willingness of employers to sponsor new F-1 students for a cap-subject H-1B, particularly those hired straight out of school on OPT.2
• Lottery Odds Shift: The proposed weighted H-1B lottery rule would drastically reduce the selection probability for entry-level positions (Wage Level I), which are commonly held by F-1 students on OPT/STEM OPT extension, shifting the odds in favor of higher-paid, more senior talent.
• Cap-Gap Safety Net Erosion: While the H-1B Cap-Gap extension itself remains a viable regulatory protection, fewer employers filing new petitions will mean fewer F-1 students are eligible for the extension, regardless of its legal status.
• Strategic Imperative: F-1 students must now aggressively prioritize the F-1 Change of Status (COS) route over Consular Processing (CP) to avoid the supplemental fee, and maximize their eligibility for the 24-month STEM OPT extension as an essential multi-year buffer.
• Third-Party Placement Restrictions: Restrictions on third-party placements will negatively impact consulting firms that place international students in specialized roles, further limiting opportunities for F-1 students in the job market.

What is the $100,000 H-1B Entry Fee and How Does it Affect Employers Sponsoring F-1 Students?

The $100,000 H-1B fee is a new, one-time supplemental charge mandated by a Presidential Proclamation (issued September 19, 2025), which applies to most new H-1B visa petitions submitted on or after September 21, 2025, for beneficiaries seeking entry into the U.S. in H-1B nonimmigrant status.4

This sudden and dramatic policy shift is the single most restrictive element impacting the FY 2026 H-1B season. It redefines the financial risk associated with sponsoring foreign talent, particularly for the pool of entry-level graduates on F-1 student OPT looking for their first professional role.5

The new fee results in higher costs for employers and acts as a restriction on entry for certain nonimmigrant employees seeking H-1B status.

How Does the Fee Apply to the FY 2026 H-1B Lottery?

The fee, although effective in September 2025, is primarily targeted at the H-1B cap petitions that will be submitted following the lottery selection process.

• Timing: The FY 2026 H-1B lottery registration window (typically in March 2026) is the first full lottery cycle directly impacted. Selected employers will file their new H-1B petitions in the April–June 2026 window for an October 1, 2026, start date. Since these petitions are filed after the September 21, 2025, effective date (at 12:01 a.m. eastern daylight time), they will require the $100,000 H-1B fee unless an exemption applies.6
• Employer Obligation: U.S. Department of Labor (DOL) regulations generally prohibit the passing of H-1B filing costs, including this new supplemental fee, to the employee. This means the $100,000 is an immediate, direct liability for the employer, alongside existing filing fees.
• Scope: The fee is a one-time fee and does not apply to extensions (renewals) of H-1B status with the same employer, or to petitions filed before the September 21, 2025, effective date.7 It does, however, apply to cap-exempt employers (universities, nonprofits) filing new H-1B petitions after the effective date.8

Employers and applicants should consult official guidance and official sources for the most up-to-date information on fee applicability and exemptions.

Change of Status (COS) vs. Consular Processing (CP) in the New Era

For F-1 students transitioning from nonimmigrant status, the difference between an in-country F-1 Change of Status (COS) and seeking a visa abroad (Consular Processing, or CP) has never been starker.

CBP Intent to Curb B-1/B-2 Misuse:

To prevent F-1 students from avoiding the $100,000 H-1B fee by exiting, immediately returning on a tourist visa (B-1/B-2), and then filing a COS, Customs and Border Protection (CBP) has signaled a firm intent to scrutinize and deny entry to those suspected of using visitor visas with the pre-conceived intent to change to H-1B status.

These measures are intended to prevent misuse of B visas by individuals seeking to circumvent H-1B restrictions.

How Does the Proposed Weighted H-1B Lottery Rule Change Selection Odds?

The Department of Homeland Security (DHS) proposed a rule on September 24, 2025, to replace the purely random H-1B lottery selection process with a weighted system based on the offered wage level.9 This shift directly favors higher-paid positions, significantly reducing the selection probability for entry-level F-1 students.

The new system places significant emphasis on prevailing wage levels as a key factor in determining lottery selection odds, aligning with policy goals to prioritize high-skilled, high-paid workers and prevent undercutting of American wages.

This proposed change for the FY 2027 H-1B cap season (registration in March 2026) is a critical development that directly impacts the job prospects of F-1 students OPT CPT. The rule’s stated intent is to prioritize “high-skilled, high-paid aliens” and prevent program abuse by companies seeking cheap labor.11

The Wage-Based Weighted System Mechanics

Under the proposed rule, employers must provide the wage information for the offered position at the time of the initial H-1B lottery registration.12 This information, based on the Department of Labor’s four-tiered Prevailing Wage (PW) system, determines the number of entries a beneficiary receives in the lottery pool:

Impact on F-1 Students and Entry-Level Hiring

The shift from random selection to the weighted H-1B lottery fundamentally reshapes the pipeline for recent graduates:

• Entry-Level Disadvantage: The majority of graduating F-1 students transitioning off of OPT/STEM OPT extension and into their first full-time role are offered salaries that correspond to Wage Level I. Under the current random system, their odds are equal to everyone else’s. Under the proposed weighted system, their chances of selection are cut nearly in half, as their single entry competes against entries that receive three or four times the weight.13
• Pressure on Employers: The rule incentivizes employers to raise salaries or reclassify positions to Wage Level III or Wage Level IV to improve their selection odds.14 This creates intense competitive pressure, forcing companies to budget higher compensation costs for foreign talent—a financial consideration that is compounded by the $100,000 H-1B fee if the COS route is unavailable.15
• Advantage for Master’s Students: While the weighted system helps higher-paid workers generally, F-1 students who obtain a U.S. master’s degree already benefit from the separate 20,000 cap exemption pool.16 Now, if their advanced degree also correlates to a higher starting salary (Wage Level II or III), they receive a double advantage in both lotteries, making a U.S. graduate degree an even stronger immigration strategy.

The new lottery system is also designed to attract the best temporary foreign workers for high-skilled roles, especially in STEM fields.

• Compliance and Scrutiny: To prevent fraud, USCIS guidance states that the offered wage level at registration must be maintained.17 USCIS can deny or revoke petitions if an employer is found to have manipulated the wage level merely to increase lottery odds, adding significant administrative burden and compliance risk for employers.18

Do the New H-1B Rules Directly Limit Curricular Practical Training (CPT) or Optional Practical Training (OPT)?

No, the new H-1B restrictions 2026, including the $100,000 H-1B fee and the weighted lottery rule, do not directly modify, eliminate, or restrict an F-1 student’s access to Curricular Practical Training (CPT) or Optional Practical Training (OPT). These benefits are defined under separate F-1 regulations.

 

DHS and USCIS have not proposed a rule that would eliminate or directly shorten the maximum time currently allowed for Curricular Practical Training (CPT), Optional Practical Training (OPT) (12 months), or the STEM OPT Extension (24 months).

Indirect Impact on OPT/CPT

However, the Department of Homeland Security (DHS) has proposed sweeping changes to the underlying F-1 visa framework that would indirectly and significantly impact the eligibility, application process, and stability of a student’s entire work authorization period, including CPT, OPT, and STEM OPT.

The proposed rule, titled “Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media,” focuses on replacing the current Duration of Status (D/S) with a fixed admission period.

Here is how that change, if finalized, would affect the work authorization components of the F-1 visa:

1. Indirect Impact on OPT and STEM OPT Extensions

Currently, OPT and STEM OPT extensions are granted as long as the student maintains their Duration of Status (D/S). Under the proposed rule, the status of the entire F-1 period would become a fixed date, which creates new administrative hurdles for work authorization.

In essence, the eligibility for the work benefit (OPT/STEM OPT) remains, but the student’s underlying legal permission to stay in the U.S. to use that benefit becomes a complicated application process with USCIS, rather than a simpler administrative update by the university’s DSO.

2. Impact on Curricular Practical Training (CPT)

While CPT is not explicitly targeted for reduction, the proposed rule includes new restrictions on academic flexibility that could affect a student’s ability to qualify for CPT.

• Restrictions on Program Changes: The proposed rule would introduce new limitations on a student’s ability to change academic programs or levels, including a prohibition on beginning a program at a lower educational level while in F-1 status. Since CPT must be an integral part of an academic program, any limits on changing majors or transferring schools could indirectly restrict the ability of a student to utilize CPT, especially if the new employment requires an academic shift that is disallowed under the new rule. 

3. Change to Grace Periods (The Most Direct Impact on Post-Completion Work)

The most direct change impacting the period immediately following graduation or the end of OPT is the proposed reduction in the grace period:

• Current Grace Period: 60 days after the program end date or after post-completion OPT/STEM OPT expires.
• Proposed Grace Period: 30 days after the program end date or after post-completion OPT/STEM OPT expires. 

This reduction significantly shortens the critical window for F-1 students to seek a change of status to H-1B (or another visa), or to make final arrangements to depart the United States. In the context of the highly competitive H-1B lottery, a 30-day window provides far less time to manage complex transition issues, increasing the risk of accruing “unlawful presence” should they miss the deadline.

CPT, OPT, and the Increasing Value of STEM OPT

The F-1 visa’s employment options remain crucial for career launch, but the landscape has fundamentally changed.

• Curricular Practical Training (CPT): This authorization allows F-1 students to engage in employment directly related to their major while still pursuing their degree. CPT is managed by the Designated School Official (DSO) and is generally unaffected by H-1B changes, although employers may become more cautious about future H-1B sponsorship commitments.
• Optional Practical Training (OPT): This 12-month post-completion work authorization is the primary bridge between graduation and the FY 2026 H-1B season.
• Indirect Impact: A tougher H-1B environment makes maximizing the 12 months of OPT (and utilizing the 90-day unemployment limit wisely) more critical. The stakes are higher now, as a lost opportunity on OPT is more likely to mean a departure from the U.S.
• STEM OPT Extension: The Critical Buffer

The STEM OPT extension is now, more than ever, the most valuable asset for F-1 students in a restricted immigration climate. This 24-month extension, available to those with a degree in a qualifying STEM field, provides up to three full years of employment authorization after graduation. International students, particularly foreign nationals in STEM fields such as computer science, make up a significant portion of U.S. graduate programs and contribute to innovation and workforce development, making this extension a critical tool for retaining global talent.

Why STEM OPT is Now Essential:

• Multiple H-1B Attempts: Three years of work authorization provides two, or potentially three, attempts at the H-1B lottery (March 2026, March 2027, and March 2028).
• Employer Investment: Employers willing to sponsor a STEM OPT extension worker are often more committed to long-term sponsorship, potentially mitigating the risk of the $100,000 H-1B fee if the COS route becomes complicated.
• H-1B Filing Deadline: The STEM OPT extension prevents the F-1 status and EAD from expiring, ensuring the student is still in nonimmigrant status at the time the H-1B is filed, which is a prerequisite for the full Cap-Gap benefit.
• Modernization Rule Impact: The modernization rule effective January 17, 2025, extends the work authorization period for F-1 students with timely-filed H-1B petitions, providing additional flexibility for those navigating the complex immigration landscape.

How is the H-1B Cap-Gap Extension Affected for F-1 Students in 2026?

The H-1B Cap-Gap extension, the regulatory provision that extends an eligible F-1 student’s status and work authorization, remains legally intact; however, the practicality of utilizing it is severely threatened by the anticipated reduction in employer sponsorship due to the high costs and reduced lottery odds associated with the new H-1B restrictions 2026.

The new restrictions specifically impact certain nonimmigrant workers, including those seeking to transition from F-1 to H-1B status, by imposing additional eligibility requirements and uncertainties.

The Cap-Gap is designed to “bridge the gap” between the expiration of a student’s OPT/STEM OPT EAD and the start of their approved H-1B status on October 1st. Eligibility for this crucial benefit hinges entirely on the employer filing a timely H-1B cap-subject petition requesting a Change of Status (COS).

Cap-Gap Eligibility: Crucial Distinctions

The level of Cap-Gap benefit an F-1 student receives depends entirely on their status on the day the H-1B petition is received by USCIS:

1. Filing During Active OPT/STEM OPT:
   • Benefit: Automatic extension of both F-1 status and work authorization (EAD) through September 30th of that fiscal year.
   • Goal: This is the safest and most optimal status for the student.
2. Filing During 60-Day Grace Period:
   • Benefit: Automatic extension of F-1 status only (permission to stay in the U.S.) through September 30th.
   • Limitation: The student cannot work during the Cap-Gap period because their employment authorization expired before the H-1B petition was filed.
3. Consular Processing (CP) Route:
   • Benefit: No Cap-Gap extension of status or work authorization is granted. The student must depart the U.S. upon the end of their OPT/grace period.
   • Risk: This route is now highly risky because the $100,000 H-1B fee is triggered for those seeking visa issuance/entry abroad based on a petition filed after the Sept 21, 2025, Proclamation date.19

The Indirect Crisis of the Cap-Gap

The real crisis for the H-1B Cap-Gap extension in the FY 2026 H-1B season is not a change to the Cap-Gap rule itself, but the economic deterrence it faces:

• Fewer employers will submit new H-1B petitions in the April 2026 filing window due to the unprecedented $100,000 cost.
• The weighted H-1B lottery drastically reduces the selection of entry-level candidates typically in the F-1 student pipeline.20
• This combined effect means a lower overall selection rate in the lottery and fewer eligible F-1 students who can secure the Cap-Gap bridge, thereby accelerating the need for many graduates to leave the U.S. after their OPT expires.

These changes also create additional challenges for temporary foreign workers seeking long-term employment in the U.S.

What Changes are Proposed to the F-1 Duration of Status (D/S) Rule and How Would this Restrict Foreign Students?

The Department of Homeland Security (DHS) proposed rule, initially published in August 2025, seeks to replace the current F-1 “Duration of Status” (D/S) with a fixed, maximum admission period (e.g., 4 years or program length), which would require F-1 students to apply for extensions periodically with USCIS.

These changes may also affect the long-term prospects of students seeking citizenship or permanent residency in the U.S., as visa eligibility and legal status are closely tied to the path toward citizenship.

This proposed Duration of Status (D/S) F-1 rule change, if finalized, represents a fundamental shift in the framework governing F-1 students and is designed to increase government oversight. It adds another layer of instability for foreign students already dealing with the H-1B restrictions 2026. Additionally, the H-1B visa program has faced criticism for being exploited to replace American workers with lower-paid foreign workers, which has fueled the push for stricter regulations.

Understanding Duration of Status (D/S)

Historically, D/S has allowed F-1 students to remain in the U.S. indefinitely, provided they maintain their academic program, making normal progression through multiple degrees, CPT, OPT, and the STEM OPT extension relatively seamless from a status maintenance perspective.

The Specifics of the Proposed Fixed-Term Rule

If enacted, the proposed rule would mandate several new restrictions on nonimmigrant status for students:

• Fixed Admission Periods: The authorized stay would be capped (e.g., at four years), requiring a costly and time-consuming Form I-539 (Application to Extend/Change Nonimmigrant Status) filing with USCIS to continue the program.
• Reduced Grace Period: The post-completion grace period for F-1 students would be reduced from 60 days to 30 days, significantly cutting the window for departure or for an employer to file a Change of Status petition.
• Academic Flexibility Limits: Restrictions would be imposed on changing programs or fields of study, particularly for graduate students, hindering academic freedom and career pivots.
• Immediate Departure for Denials: Students who file an extension and are subsequently denied would have no grace period and would be required to depart the U.S. immediately.

The Combined Effect: A Double Challenge

The concurrent policy shifts—the $100,000 H-1B fee, the weighted H-1B lottery, and the proposed Duration of Status (D/S) F-1 rule change—place F-1 students in a high-risk scenario:

• Increased F-1 Costs: Students must pay for extension applications and potentially legal counsel just to stay in school.
• Decreased H-1B Opportunity: The exit path for securing a long-term nonimmigrant status is exponentially more expensive for the employer, and significantly less likely for entry-level workers.21
• Result: The U.S. is becoming a less predictable and less attractive destination for international talent, as noted by organizations like the Catholic Legal Immigration Network (CLINIC).

Many aspects of these new policies remain unclear and have not been fully clarified by government agencies, leading to ongoing uncertainty for students and employers.

Actionable Strategies for F-1 Students to Navigate the FY 2026 Immigration Climate

F-1 students must adopt a hyper-strategic and risk-averse approach to their academic and career planning, focusing on maximizing employment authorization and minimizing future exposure to the $100,000 H-1B entry fee and consular processing risks. For up-to-date guidance and support navigating these complex processes, students and employers should consult professional immigration services.

1. Focus on STEM and Maximize STEM OPT Extension

The 24-month STEM OPT extension is the most reliable tool available to combat the H-1B restrictions 2026.

• Secure Your Eligibility: Choose a STEM major, if possible, and ensure the employer is registered with E-Verify.
• Timely Filing: Apply for the STEM OPT extension well before the initial 12-month OPT EAD expires. Filing after the Cap-Gap has begun or after the EAD expiration can lead to denial.
• Strategic Employment: Use the full three years of OPT/STEM OPT to build a professional profile that might later qualify for an O-1 visa or justify the $100,000 H-1B fee to a highly motivated employer.

2. Demand and Prioritize Change of Status (COS)

The difference between a COS and CP is now a $100,000 question for the employer and the key to the H-1B Cap-Gap extension for the student.

• Employer Education: F-1 students must be prepared to professionally educate potential employers that the $100,000 H-1B fee only applies to beneficiaries seeking entry (CP route). A COS petition from within the U.S. avoids this cost.
• Risk Mitigation: Insist that the employer file the F-1 Change of Status (COS) petition while you are on active OPT/STEM OPT to secure both status and work authorization during the Cap-Gap period.

3. Strategic Positioning for the Weighted H-1B Lottery

For those aiming for the FY 2027 H-1B cap season (March 2026 registration), strategy must incorporate the new wage weighting:

• Know Your Wage Level: Determine the Department of Labor (DOL) Prevailing Wage Level (I-IV) for your offered position based on your occupation and geographic location.22
• Negotiate Higher Wages: A higher wage (Level III or IV) directly translates to a higher chance of selection.23 F-1 students and their prospective employers should strategically evaluate if a small salary increase pushes the position into a higher weighted H-1B lottery tier.
• Focus on Advanced Degrees: For master’s and PhD holders, securing a higher-paid role capitalizes on the double benefit: both the 20,000 Master’s Cap and the multiple entries provided by the weighted H-1B lottery for higher wage levels.24

4. Explore and Qualify for Alternative Nonimmigrant Statuses

With the H-1B path becoming prohibitively expensive for many employers, F-1 students must build resumes that can qualify them for cap-exempt or numerically unlimited nonimmigrant status options.

5. Monitor Legal Challenges and USCIS Guidance

The H-1B restrictions 2026, particularly the $100,000 H-1B fee and the weighted H-1B lottery, are highly controversial and have already been subject to legal challenge. Government agencies continue to issue guidance to clarify and implement these policies, and F-1 students and their employers should rely on current guidance to ensure compliance. F-1 students and their employers should stay current on official USCIS guidance, court rulings, and potential national interest exemptions (NIEs) that may arise (e.g., for healthcare professionals).

Detailed FAQ Section: Navigating H-1B, F-1, and Employer Strategy

Q: Does the $100,000 H-1B fee apply to my H-1B visa extension?

A: No, the official USCIS guidance confirms the $100,000 H-1B fee does not apply to H-1B renewals or extensions filed with the same employer for persons already in H-1B nonimmigrant status in the U.S. It is a one-time fee on new H-1B petitions submitted on or after September 21, 2025.26

Q: How does the weighted H-1B lottery system impact F-1 master’s students?

A: F-1 students with a U.S. master’s degree benefit significantly.27 They are already eligible for the separate 20,000 Master’s Cap lottery. Under the weighted H-1B lottery proposal, if their offered salary is Level III or IV, they receive multiple entries, giving them a much higher probability of selection in both the Master’s Cap and the Regular Cap pool.28

Q: How does the proposed Duration of Status (D/S) F-1 rule change affect my STEM OPT extension?

A: If the DHS proposed rule is finalized, it would likely replace the current 60-day post-completion grace period with a 30-day grace period. This means F-1 students would have significantly less time to file the STEM OPT extension application after their initial OPT expires, making timely filing even more critical. Additionally, all OPT and STEM OPT extension periods would require the student to maintain their fixed period of admission.

Q: What if my employer files my H-1B petition during my F-1 grace period? Do I get to work during the Cap-Gap?

A: No. If your H-1B change of status petition is filed by your employer during your 60-day grace period (which may be reduced to 30 days under the proposed rule), your F-1 status (permission to stay in the U.S.) will be extended until October 1st, but your work authorization will not. To continue working during the H-1B Cap-Gap extension, the H-1B petition must be filed while you are on active OPT or STEM OPT extension EAD.

Q: What is the most significant spillover question from the H-1B restrictions for F-1 students?

A: The most significant spillover question is employer demand and hiring strategy. The H-1B restrictions 2026 create a $100,000 incentive for employers to prioritize domestic workers or those in the U.S. who do not require a new H-1B filing, and the weighted H-1B lottery discourages the hiring of entry-level talent.29 This policy shift forces companies to reassess whether the skill set of an entry-level foreign graduate is worth the six-figure compliance cost and the significantly reduced lottery odds.30

Q: Who has the authority to restrict decisions on H-1B petitions under the new rules?

A: The Department of Homeland Security and other relevant agencies have the authority to restrict decisions on H-1B petitions, as outlined in recent proclamations and policy directives.

Conclusion: The Long-Term Outlook for F-1 to H-1B Transitions

The FY 2026 H-1B season marks an unprecedented convergence of high-cost barriers, status-stability threats, and lottery bias for the F-1 student population. The $100,000 H-1B fee acts as a prohibitive tariff on international talent seeking long-term nonimmigrant status, while the proposed weighted H-1B lottery system and the potential Duration of Status (D/S) F-1 rule change erode both the chance and the foundation of the U.S. career launch. Many American technology companies have allegedly laid off their skilled workers while hiring large numbers of H-1B workers, further complicating the job market for international students. In addition, new proclamations and executive orders have significantly altered the H-1B process for F-1 students, as recent proclamations introduce new rules and restrictions that impact visa eligibility and application procedures.

For the F-1 students OPT CPT generation, success in this restrictive climate depends not just on academic excellence, but on aggressive, informed, and compliant immigration strategy. Maximizing the STEM OPT extension and proactively steering employers toward the F-1 Change of Status (COS) petition are no longer optional steps—they are critical requirements for survival in the U.S. workforce pipeline. While the underlying regulatory mechanisms that support the transition, such as the H-1B Cap-Gap extension, remain technically in place, the economic and political pressure on employers makes the path forward a gauntlet that requires resilience, foresight, and expert guidance.

Author Profile

Richard T. Herman, Esq. is a nationally renowned immigration lawyer and a passionate advocate for global talent. With over 30 years of experience, he has guided thousands of international students, professionals, and entrepreneurs through complex U.S. immigration laws. Richard is the founder of the Herman Legal Group (click to visit Herman Legal Group website page) and is the author of the critically acclaimed book,Immigrant, Inc.: Why Immigrant Entrepreneurs Are Transforming Our Economy.His expertise in employment-based immigration, including the H-1B, OPT, and STEM OPT extension categories, provides a knowledgeable perspective on the challenges facing highly skilled foreign workers. You can learn more about Richard and his work on his bio page (click to visit Richard’s bio page on that website) and connect with him on professional platforms.

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