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US Colleges Say Hiring US Students a Bad Deal

theodp writes "Many US colleges and universities have notices posted on their websites informing US companies that they're tax chumps if they hire students who are US citizens. '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,' advises the taxpayer-supported University of Pittsburgh (pdf) as it makes the case against hiring its own US students. You'll find identical pitches made by the University of Delaware, the University of Cincinnati, Kansas State University, the University of Southern California, the University of Wisconsin, Iowa State University, and other public colleges and universities. The same message is also echoed by private schools, such as John Hopkins University, Brown University, Rollins College and Loyola University Chicago."

31 of 490 comments (clear)

  1. Tax Exempt? by truthsearch · · Score: 4, Informative

    the majority of them are exempt from Social Security

    The last time I worked with people on an H1B visas, Social Security was paid.

    1. Re:Tax Exempt? by Anonymous Coward · · Score: 5, Informative

      If you are a foreign student and graduate from the US normally you start on your F-1 (practical training for one year) and then switch to an H1B. J-1 visas are mostly for people in universities since it's for visiting scholars.

      Do not take things out of context! What the document says is companies might save some money if they hire foreigners on F-1 or J-1 visas. It is just so foreigners _who_study_in_the_United_States_ can find a job since employers seem to be under the impression that hiring a foreigner is a hassle. This would not apply to foreigners that get any other kind of visas. Also, the F-1 or J-1 visas do not last forever. Once you graduate you can extend it at most one year. Once you are on an H-1 visa you have to pay social security, medicare and everything everyone pays.

      Still, to actually get the H-1 visa _is_ a hassle unless the employer is a university.

    2. Re:Tax Exempt? by Moryath · · Score: 4, Insightful

      Who said the government ever makes sense?

      Seriously. Look at Microsoft - they've been pushing outsourced (e.g. "revolving temp agency hiring") and overseas-sourced (how many times did Bill Gates lie his ass off claiming he "couldn't find" people trained to do things here while pushing for H1-B increases?) for years now. I have a friend who just spent three years "working for Microsoft", but he was actually hired by a temp agency (along with 80% of the people in his building) and forced to work "Shifts" with 90-day breaks in between "hirings" to avoid MS or the temp agency having to pay out certain benefits.

      Of course we should be making it better on taxes to hire American workers than foreign workers, and that doesn't just go for visa holders; we should be taxing companies that use outsourced labor overseas, too. If they don't want to pay the tax, they can move their factories and resources back to the States.

      Michael Dell is too cheap to pay for labor in the country that made him rich. I think the government owes him a reality check on behalf of US.

    3. Re:Tax Exempt? by LKM · · Score: 5, Insightful

      With the way the recession is currently in the US, it makes no sense for the US govt. to not only allow, but, in some cases expedite bringing foreigners in (or letting them in willy nilly across the border illegally) to fill jobs that our own citizens are in desperate need of...

      That makes little sense, but I approve. In fact, as somebody who lives in Europe, I encourage every smart, qualified worker who doesn't feel welcome in the US to come over here. We'll get out of these economic problems by having smart people do innovative things. It doesn't really matter where they were born, but it does matter where they work.

      I don't see that a state funded school should be allowed by the taxpayers of that state to promote the hiring of foreign people over US citizens either...that's not what my tax dollars should be going for...

      So you're saying that universities should promote political opinions instead of the truth?

    4. Re:Tax Exempt? by c6gunner · · Score: 5, Insightful

      Of course we should be making it better on taxes to hire American workers than foreign workers, and that doesn't just go for visa holders; we should be taxing companies that use outsourced labor overseas, too. If they don't want to pay the tax, they can move their factories and resources back to the States.

      Or you could ... I dunno .... maybe SIMPLIFY THE TAX CODE and get rid of these dumb laws which create these idiotic problems in the first place? How much longer do you expect to be able to keep adding bandaids on top of one another?

    5. Re:Tax Exempt? by SteeldrivingJon · · Score: 4, Informative

      "What the document says is companies might save some money if they hire foreigners on F-1 or J-1 visas. "

      Actually the document I saw didn't even put it that way. It simply stated what was required for whom. There was no aspect of trying to use "savings" as a sales pitch.

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    6. Re:Tax Exempt? by Ironica · · Score: 4, Insightful

      "Do not take things out of context! What the document says is companies might save some money if they hire foreigners on F-1 or J-1 visas. It is just so foreigners _who_study_in_the_United_States_ can find a job since employers seem to be under the impression that hiring a foreigner is a hassle."

      With the way the recession is currently in the US, it makes no sense for the US govt. to not only allow, but, in some cases expedite bringing foreigners in (or letting them in willy nilly across the border illegally) to fill jobs that our own citizens are in desperate need of...

      These particular foreigners have come to study at universities here. The universities bring foreign students over for a number of reasons:
      * It makes it easier for our students to study in foreign countries when they want to.
      * Different academic emphases in different cultures lead to students who bring a fresh perspective and a different set of background knowledge to research and inquiry.
      * Foreign students are usually required to pay not just non-resident tuition, but an even higher additional fee to public universities.
      * Positive experiences studying in the US send foreign students home with a new take on American culture and values. It's a fairly cheap and easy method of exporting democracy to certain parts of the world.

      Our own university system would suffer if we ended international student recruitment. Unfortunately, because studying at US institutions is so expensive, many foreign students need to be able to find jobs to work while they're in school. Therefore, those programs are threatened by bigoted or ignorant employers who have something against hiring foreign students. (They're also threatened by DHS procedures that get students placed on the wrong list and have their visas held up for weeks, while their research languishes and in some cases completely expires, losing them a year or more of work.)

      --
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    7. Re:Tax Exempt? by cayenne8 · · Score: 5, Insightful
      "And what exactly do you propose the government cuts? It's easy to hide behind generalities saying "we need to cut spending" without taking the loss of quality of life into consideration. Yes we could cut millions of dollars from the highway system, but our roads would deteriorate into an even more unacceptable state, yes we could cut education even more, but that would overwork an already overburdened, under appreciated set of teachers and put American children out of competition with those educated elsewhere. tl;dr it's a lot more complicated than lopping off a percentage off of everything"

      Well, if they would start a very honest effort, I'm sure they could find TONS of stuff they could do without. Let's start with some really outdated things they fund? I mean, the just recently got rid of the federal excise tax that used to be on your phone bill that was used to pay for the Spanish-American war. That tax lasted from 1898 till 2006 I believe. Well, there are federal spending dollars going to things like that too. We could start there and drop all spending for programs that are outdated.

      No we don't need to cut education dollars first..BUT, why not dismantle the bureaucracy layers above the teachers and schools? I mean, we pay a LOT per student, but, by the time that $$ actually reaches the student, there is very little left for him and the teacher and the school itself. If you could cut out the upteen layers of middle men, I'll be you'd find we could cut spending, and STILL have the student/teacher level realizing more dollars than they do today.

      While I do support a safety net for the elderly and the truly infirmed, I don't see a need to subsidize any abled bodied person that can work. If you screwed around and didn't get an education, well the world needs fruit picked and ditches dug. If we put off all the able bodied workers on welfare and entitlement programs, we wouldn't have a need for so many ILLEGAL (there is a difference) alien workers. Taking care of that situation, would also ease the burden that feds and state have to pay for schools and social services that non-citizens use, as well as a large chunk of medical expenditures that we all pay treating illegals here in the US at the emergency rooms that they use for emergency and less than emergency tx.

      Have you seen the highway system lately? It isn't looking good. Let's stop subsidizing everyone, the corn farmers, the corporations, all the special interests. We should NOT be giving money out to anyone from the tax coffers. It should only be used for basic government needs and functions. Hell, why do we give money to other countries? I mean, sure, in a time of need emergencies, I don't have a problem with it..like when the tsunami hit, sure you help out. But this constant stream of $$ out of the US is just bribe money for trying to get someone to vote or act our way. Screw that.

      There is a fuck-ton load of waste in the bureaucracy of the United States govt.

      Unfortunately, I think the only way to get the Fed. to stop spending like a drunken sailor on leave, is for the states to grow some balls, and STOP SENDING MONEY to the federal govt. I think we have to dry up the funds before they will cut the spending.

      --
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    8. Re:Tax Exempt? by The+Spoonman · · Score: 4, Interesting

      If you screwed around and didn't get an education, well the world needs fruit picked and ditches dug.

      Interesting how in the paragraph prior you decry the quality of the educational system in the US, and then proceed to blame those who failed to get a quality education. You should run for office! You've got the "talking out of both sides of your asshole" down perfectly.

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    9. Re:Tax Exempt? by cayenne8 · · Score: 4, Insightful
      "the second biggest item in the US budget (16.9%) is the Department of Defense,"

      Hey, at least it is ONE govt. program that DOES stimulate the economy and put money back in the hands of the citizens. There is a lot of money to be made in working these military govt. contracts. At least they aren't wasted dollars as bad as some govt. projects are. Good high tech jobs for these dollars, better than subsidies to corn farmers and high fructose corn syrup interests.

      --
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    10. Re:Tax Exempt? by Manchot · · Score: 4, Insightful

      Broken window fallacy. It's only "stimulating" the economy by taking money from the citizens and giving it to the defense contractors. If we cut our defense budget by 15%, we could pay for health care.

  2. Don't blame the universities by spikenerd · · Score: 5, Insightful

    Who is the problem here? The universities who tell it like it is? Or the morons in congress who make it the way it is?

  3. Lou Dobbs Dot by Deag · · Score: 4, Insightful

    I seem to have wandered into LouDobbsDot by accident.

    These students I am sure are paying well to be attending those universities and part of that fee is towards support services for their interests.

    It doesn't seem unreasonable to me for those services to highlight whatever advantages these students have, because they probably have a lot of disadvantages in language and local knowledge.

  4. Huh? by Guse · · Score: 5, Interesting

    Oooookaaaay. It's not like the colleges are saying US students are bad. Instead, they're saying that these international students aren't as hard to hire as one might think and that there are benefits to it.

    Just because I tell you that you should eat oranges because they're high in Vitamin C doesn't mean that I don't think eating apples is a good idea.

    I'm impressed, though, because I've not seen a summary this reactionary and poorly constructed in a long time.

    1. Re:Huh? by UnknowingFool · · Score: 5, Informative

      Agreed. The link is more of a FAQ to tell employers that international students can legally gain employment under certain conditions. They also advise employers of the tax situation and that employment must stop once the education stops. Nowhere does it advocate hiring international over U.S. students or what benefits are to using international students. While international students are exempt Social Security and Medicare it specifically says: "Unless exempted by a tax treaty, F-1 and J-1 students earning income under practical training are subject to applicable, federal, state, and local income taxes."

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  5. Misleading Title by OwMyBrain · · Score: 4, Informative

    If you look at these links these are list pertaining to why companies SHOULD hire international students not reasons as to why companies should avoid domestic students.

    They are simply trying to "sell" certain types of students (international) to companies by stating the benefits of hiring those types of students, thereby catering to those student's interests.

    Nothing to see here.

  6. Mod Summary Troll. by bmo · · Score: 5, Insightful

    Since Brown is literally up the road from me, I decided to click on Brown's PDF first, and then the others. I thought maybe there was a breaking story I could submit to the Providence Journal so they could get the whole state of Rhode Island up in arms.

    The summary doesn't match the language of the PDFs in the least.

    I don't have enough middle fingers for this summary. It's massive troll.

    Unless exempted by a tax treaty, F-1 and J-1 students earning income under practical training are subject to
    applicable federal, state, and local income taxes. Information on tax treaties may be found in Internal Revenue
    Services Publication 519, U.S. Tax Guide for Aliens, and 901, U.S. Tax Treaties. Generally, F-1 and J-1
    students are exempted from Social Security and Medicare tax requirements. However, if F-1 and J-1 students
    are considered resident aliens for income tax purposes, Social Security and Medicare taxes should be
    withheld. Chapter 1 of Internal Revenue Services Publication 519, U.S. Tax Guide for Aliens explains how to
    determine the residency status of international students. More information on Social Security and Medicare
    taxes can be found in Chapter 8 of Internal Revenue Services Publication 519, U.S. Tax Guide for Aliens and in
    Section 940 of Social Security Administration Publication No. 65-008, Social Security Handbook.

    Does that sound like employers can avoid taxes by hiring foreign students? I don't think so, Bob.

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  7. Kneejerk reaction. by ikarous · · Score: 5, Insightful

    Read the PDF that is linked in the article. At no point does it advocate hiring international students over United States citizens. The document does mention that a company can conceivably save money since the majority of these students are exempt from Medicare and FICA tax requirements. Furthermore, the document is published by the university's international services department. It is their purpose to try to get the best deal for international students.

    This article is trolling. Move on.

  8. Re:All the proof I needed by UnknowingFool · · Score: 5, Insightful

    If you RTFA instead of the summary you'd see it was a very poor and biased summary. The actual article did not advocate any such position.

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  9. Re:All the proof I needed by dov_0 · · Score: 5, Insightful

    The real reason could be this: International students pay well for their studies. If they hav work, they stay on studying to the end of their courses and can pay their fees. More importantly, they also encourage other students to come and study in the USA.

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  10. Re:Solution? by Useful+Wheat · · Score: 5, Informative

    Did nobody actually read the linked documents? All of them are promoting hiring students from the university. They simply list what laws apply when a busness hires international students. All of them exist to clear up misconceptions people might have about hiring foreign students, so that they are not unfairly ignored in the hiring process.

    For example, one question is "Does the student need a work permit to be hired" and the answer is no. The student cannot get a work permit until they have a written job offer, so any employer waiting for proof of a work permit before giving an interview is asking for the impossible.

    I think Cmdrtaco should read TFA.

  11. Can we mod this story off the main page? by DigitalReverend · · Score: 5, Interesting

    Seriously, I looked ad the PDF, and the languages used in the summary, is no where to be found in the provided links. I vote to mod this story off the front page. In fact, I think the "editors" should be able to be moderated.

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  12. Re:All the proof I needed by theaceoffire · · Score: 5, Funny

    If you expect me to read or understand the topic before I form an opinion, then I str...
    HEY LOOK! A PENNY!

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  13. Troll Story by burnin1965 · · Score: 5, Informative

    This story should be tagged as a troll story.

    First, the documents to which the article links were not written with the intention of convincing U.S. employers to hire students who are non-residents of the United States in place of students who are citizens. Non-resident students are likely no different than any other student in college and need supplemental income to pay for their education. The documents purpose is to enlighten employers about the facts about hiring non-resident students who are in the country on a student visa. Perhaps the author would like to take it one step further and see if they can incite hatred in legal aliens who are here working under a green card as these pamphlets surely must be convincing U.S. employers to hire foreign students studying under a visa in place of legal immigrant workers. Or perhaps not.

    Second, if the author bothered to read IRS Publication 519, as the pamphlets suggest, they would have realized that any foreign student studying under a visa in the united states will fall under Social Security and FICA taxes if they are determined to have a substantial presence in the United States.

    You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for calendar year 2008. To meet this test, you must be physically present in the United States on at least:

          1.

                31 days during 2008, and
          2.

                183 days during the 3-year period that includes 2008, 2007, and 2006, counting:
                      1.

                            All the days you were present in 2008, and
                      2.

                            of the days you were present in 2007, and
                      3.

                            of the days you were present in 2006.

    If a foreign student spends any more time in the U.S. than is necessary to attend school then it is likely they will fall under the substantial presence test and an employer will be required to pay Social Security and FICA taxes for the student they hired. A foreign student who is only available to work a fraction of each year is not a threat to the resident work force or the social services systems paid for by that work force.

    As a member of the unemployed I understand the difficulties many people are going through but we can maintain a semblance of intelligence and become informed before making poorly researched rants.

  14. Re:brain drain by bcattwoo · · Score: 4, Informative

    You need to read the links. This story is a troll. They aren't promoting international students over domestic students. They are merely giving the facts of what is involved with hiring an international students.

  15. Re:Solution? by Publikwerks · · Score: 5, Funny

    40-50% is when people start blaming an ethnic group, put a dictator in charge, and eye Poland longingly

  16. Re:Solution? by thrillseeker · · Score: 4, Insightful

    Or you could move to a sales tax instead

    a sales tax does not make the congressman a middleman with sufficient power

  17. Re:brain drain by 0100010001010011 · · Score: 4, Informative

    No the US needs to accept the fact that not everyone can be a scientist and engineer and start directing candidates to trade schools.

    The word needs ditch diggers, the difference is America convinces the ditch diggers they need 4 years and a bachelors degree (And a ton of debt)

  18. makes no difference for tax purposes by ProfBooty · · Score: 5, Informative

    both F-1 and J-1 are exempt.

    http://www.irs.gov/businesses/small/international/article/0,,id=131635,00.html

    F-visas, J-visas, M-visas, Q-visas. Nonresident alien students, scholars, professors, teachers, trainees, researchers, and other aliens temporarily present in the United States in F-1,J-1,M-1, or Q-1/Q-2 nonimmigrant status are exempt from Social Security / Medicare Taxes on wages paid to them for services performed within the United States as long as such services are allowed by the United States Citizenship and Immigration Services (USCIS) for these nonimmigrant statuses, and such services are performed to carry out the purposes for which they were admitted into the United States.

            * Exempt Employment includes:
                        o On-campus student employment up to 20 hours a week (40 hrs during summer vacations)
                        o Off-campus student employment allowed by USCIS
                        o Practical Training student employment on or off campus
                        o On-campus employment as professor, teacher or researcher
            * Limitations on exemption:
                        o The exemption does not apply to spouses and children in F-2, J-2, M-2, or Q-3 nonimmigrant status.
                        o The exemption does not apply to employment not allowed by USCIS or to employment not closely connected to the purpose for which they were admitted into the United States.
                        o The exemption does not apply to nonimmigrants in F-1,J-1,M-1,or Q-1/Q-2 status who change nonimmigrant status to a status which is not exempt or to a special protected status.
                        o The exemption does not apply to nonimmigrants in F-1,J-1,M-1, or Q-1/Q-2 status who become resident aliens for tax purposes.

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  19. Tax cuts are not a cure all by sjbe · · Score: 4, Informative

    ...drop FICA and Medicare taxes, seeing that College age students will never benefit from the programs because they will be long broke by the time the students reach retirement.

    Nice sound bite but it is only true if the funding for those programs remains like it is today. I think the odds of that happening is a pretty good approximation of zero. Social Security and Medicare are the largest and most popular government programs out there. It is unlikely Congress will act quickly absent a fiscal emergency but sooner or later they'll have to address the funding of those programs.

    Combined that with dropping the aggregate (State + Federal) Corporate tax rate to less than 10% and you will see Companies rushing into the US, bye bye 10% unemployment.

    With the additional effect of causing millions of senior citizens who lose their primary income and health care. Which would have a devastating effect on their economic well being. There is no free lunch. Those programs serve a very real and very important purpose in spite of their problems.

    We are already why to the right on the Laffer Curve and going further to the right is just going to push up unemployment more.

    Sounds to me like you don't actually understand the Laffer Curve. The Laffer Curve hypotheses that there is an optimum tax rate - it might be necessary to raise OR cut taxes to reach that optimum. It does NOT tell you where you are on the Laffer curve, nor does it tell you what that optimum actually is. The Laffer curve does not prescribe or predict - it merely is a theory that an optimum exists. This makes it of limited value. The only way to find out for certain is to change the tax rate and see what happens but it is entirely possible we have a tax rate that is too low. That's the dirty little secret of those who constantly push for lowering taxes claiming that it will increase revenue based on the Laffer curve. You cannot possibly know where you are on that curve so you cannot use the Laffer curve as evidence that cutting taxes (or raising them) will be good policy.

  20. Re:Welfare bums now SS disability bums. by LordKazan · · Score: 4, Insightful

    so why the hell are you bitching and not reporting them and their "doctors" for fraud like a responsible citizen.

    fuck dude, take some responsibility.

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