The U.S. Talent Retention Paradox: A Quantitative Forecast of International Student Outflows Under Shifting Visa Policies

The United States stands at a critical juncture in its relationship with global talent. While it continues to attract and educate the world's brightest minds, the pathways for these individuals to transition from student to professional are becoming increasingly fractured and uncertain. This report presents a quantitative analysis of how three distinct U.S. visa policy scenarios could impact the retention of international students, forecasting the potential redirection of this talent to competitor nations, with a specific focus on Japan.

A central finding of this analysis is that the population of "at-risk" international students—those seeking U.S. employment without a secure visa pathway—is not a static figure. Its size and composition are highly elastic, responding directly to specific policy triggers. The assumption that adverse policies merely intensify the pressure on a fixed group of students is a dangerous oversimplification. Instead, policies such as the curtailment of Optional Practical Training (OPT) or the implementation of a wage-based H-1B selection system will fundamentally alter the calculus for tens of thousands of graduates, changing who is at risk and how they respond.

This potential exodus represents a significant talent arbitrage opportunity for competitor nations. Japan, in particular, has positioned itself as a strategic beneficiary of U.S. policy volatility. Through transparent, merit-based visa programs and massive, targeted investments in future-focused industries, Japan is not merely a "Plan B" but is actively crafting a "smarter Plan A" for global talent *40 *41. The projected talent loss is not an inevitability but a direct consequence of U.S. policy choices that risk undermining the long-term value of an American education and ceding a critical competitive advantage to strategic rivals.

The Crossroads of Opportunity: America's Fractured Talent Pipeline

The United States has long held an unparalleled position as the world's leading destination for higher education. In 2024, a record 1,582,808 active international students on F-1 (academic international students visa)  and M-1 visas  (vocational or other non-academic visa) were enrolled in U.S. academic and vocational institutions*1. This cohort represents a monumental investment in global human capital and a powerful engine for the American economy, contributing over $50 billion in 2023 alone*2. Yet, the very system that attracts this talent is increasingly failing to retain it, creating a deep and damaging contradiction at the heart of U.S. competitiveness.

The critical bridge between an American education and an American career has historically been a two-step process: Optional Practical Training (OPT) followed by the H-1B visa. OPT is a long-standing regulatory program that allows graduates to gain up to 12 months of practical work experience directly related to their field of study, with a 24-month extension for those in Science, Technology, Engineering, and Math (STEM) fields*3*44. In 2024, 381,140 students—a hard count representing 24% of the total international student population—utilized this vital pathway to launch their careers and apply their U.S.-acquired knowledge in the U.S. workforce*36. For those seeking longer-term employment, the next step is the H-1B visa, the primary work visa for specialty occupations*43. This pathway, however, is deeply flawed. For over a decade, demand has far outstripped the congressionally mandated annual cap of 85,000 visas*9. For the 2025 lottery, the first round of H-1B lottery selected a mere 26%, and the second round a 29%*10. This system injects a high degree of randomness and uncertainty into the career prospects of even the most qualified graduates.

The recent appointment of Joseph B. Edlow as the new Director of USCIS has cast further uncertainty on an already precarious situation for international graduates. This situation is compounded by two looming threats that could dismantle the post-graduation employment framework entirely. The first is a reconsideration of OPT*5*6*7. Critics have increasingly framed the program as an unauthorized guest worker scheme that undercuts American jobs, leading to proposals to severely curtail or eliminate it through executive action*5*6*8. The second, and perhaps more structurally damaging, threat is a proposed rule to replace the H-1B lottery with a wage-based selection process*4*42. This system would prioritize petitions based on the offered salary, ranking them from the highest (Level IV) to the lowest (Level I) *32*45*46. Since 92% of recent graduates are offered entry-level (Level I) or qualified (Level II) wages, this shift would systematically disqualify them from H-1B selection, regardless of their talent, their U.S. degree, or the demand for their skills*4*53.

This confluence of factors creates a core contradiction: the United States excels at talent development but is becoming increasingly dysfunctional at talent retention. It invests immense resources to attract and educate the world's best and brightest, only to subject them to a post-graduation system defined by random chance and existential policy threats. This structural instability is the single greatest "push factor" driving top-tier global talent to seek predictable and stable career opportunities in other nations.

Three Futures: Modeling the Impact of U.S. Immigration Policy

The trajectory of international talent retention in the U.S. can be modeled across three distinct and plausible policy futures. Each scenario is driven by a specific policy trigger that alters the risk calculus for graduates seeking to remain in the country. This framework provides a structured basis for forecasting the potential outflow of talent.

• Scenario A (Favorable): A Stable Path for Graduate STEM Talent

  The driving force behind this scenario is the passage of a bipartisan legislative measure promoted by the democrat party, such as the "Keep STEM Talent Act"*11*12. Such a law would create a direct and predictable pathway to permanent residency for international students who earn a Master's degree or PhD in a STEM field from a U.S. institution, thereby exempting this high-value cohort from the H-1B lottery and its associated uncertainties*12*13. This represents the most optimistic and talent-friendly policy outcome.
  

• Scenario B (Adverse): OPT Unchanged, H-1B Becomes Wage-Based

  This scenario posits that the Department of Homeland Security finalizes and implements its proposed rule to replace the random H-1B lottery with a wage-based selection process*4*42. By prioritizing applicants with the highest salaries (Level IV and III), the system would effectively shut out recent graduates, whose entry-level compensation places them in the lowest wage tiers (Level I and II) *4*32. This policy directly targets the career prospects of new graduates, representing the most direct threat to the return on investment of a U.S. degree.
  

• Scenario C (Adverse): OPT Curtailed, H-1B Unchanged

  In this adverse scenario, a future administration uses its executive or regulatory authority to curtail or eliminate the OPT program*6*7*8. This could involve shortening the standard 12-month work period, eliminating the 24-month STEM extension, or ending the program altogether*5*6. Such an action would sever the critical bridge between graduation and employment, forcing students to attempt to enter the H-1B lottery from their home countries and without the benefit of U.S. work experience, a significant competitive disadvantage.

The following table presents the revised forecast, providing a dynamic model that directly links specific U.S. policy choices to quantifiable talent loss.

Figure 1 : At risk international students count per scenario 

Recalibrating Risk: A Granular Analysis of the At-Risk Student Population

• Defining the Baseline At-Risk Pool

  The at-risk pool is defined as the total cohort of international students who actively pursue non-academic careers in the U.S. post-graduation but lack a guaranteed, secure pathway to long-term employment. The calculation for this baseline begins with the total active F-1 and M-1 student population of 1,582,808 in 2024*1. From this, we subtract the 1.2% share of extraordinary-ability visa holders, as they already have multi-year status*18. The most reliable proxy for employment intent is the number of students who participated in practical training (OPT or CPT)*3. In 2024, this was a hard count of 381,140 students, or 24% of the total international student body*36. This methodology yields a baseline at-risk pool of approximately 381,140 students, representing the total addressable market for U.S. employment among the current international student population.

  
  

• Scenario A (Favorable): A Shrinking Pool Due to Security

  The passage of a measure like the Keep STEM Talent Act would provide a secure, direct path to residency for a large and clearly defined group, effectively removing them from the at-risk category*11*12*13,  Of the approximately 502,000 graduate students in the U.S., about 56% are in STEM fields, which translates to roughly 281,120 individuals*19. And amongst the 281,000 graduate STEM students, a survey shows that 70 percent would like to work in the US post graduation*52. This means that 196,784 (281,120×70%) students will be exempt from the H-1B lottery. Refining the at-risk pool to 184,356 students (381,140−196,784=184,356). 
  

• Scenario B (Adverse - H-1B Wage-Based): The Creation of a "Locked-Out" Class

  A shift to a wage-based H-1B system would be the most disruptive policy change, as it would move a vast swath of graduates from being "at-risk" to being "effectively excluded"*4. The proposed system prioritizes Level IV (fully competent) and Level III (experienced) wage earners, categories for which recent graduates, by definition, do not qualify*32*46. Average starting salaries for international graduates, which is $58,510, falls squarely into the Level I wage bands *53. And the percentage of international graduates that make more than the Level III salary is approximately 10%*55. This means that the remaining 90% are being pushed out of the country. This results in 343,026 (381,140  x 90%) students are the at-risk pool. 
  

• Scenario C (Adverse - OPT Curtailed): A Smaller, More Desperate Pool

  The elimination of OPT would have a profound chilling effect, fundamentally altering student behavior*5*7. It would not simply increase the risk for the existing 381,140 students; it would cause a significant portion of them to preemptively abandon their U.S. employment ambitions, thus shrinking the at-risk pool.  OPT is a primary driver of international student enrollment and, for many, the only viable way to gain U.S. work experience and begin to recover the substantial costs of their education*20*21. A survey of U.S. universities found that 84% believe international students would likely choose to study in other countries if OPT were unavailable *22. However those already studying in the US do not have that option, and therefore are added to the “at-risk pool”. Furthermore, the 16% who would still stay in the US regardless, are affected as well. Therefore, the at risk pool is the full 100% of the baseline at risk pool of 381,140 students (no change from baseline).   

Insights for the Talent (International Students) Outflow to Japan

In 2020, Japan accounted for 0.25% of Yale’s graduating class employment outcomes — a small share, but enough to place it among the top ten international destinations for Yale alumni. Today, Japan no longer appears on that list, reflecting a decline in its relative pull for top U.S.-educated graduates. This drop is not unique to Yale; it mirrors a broader challenge Japan has faced in competing with other Asian economies, particularly China and South Korea, which in 2024 attracted 1.47% and 0.47% of Yale graduates, respectively*54. 

Yet global conditions suggest this trend could shift. In the United States, pathways from student to professional employment are becoming increasingly uncertain, with proposals to curtail the Optional Practical Training (OPT) program and replace the H-1B visa lottery with a wage-based selection process that disadvantages recent graduates. This instability is already prompting internationally trained talent to look for predictable and opportunity-rich destinations abroad. Japan is uniquely positioned to seize this moment. Through clear, merit-based immigration routes such as the Highly Skilled Professional and J-Find visas, combined with multi-trillion-yen investments in sectors like semiconductors, artificial intelligence, and renewable energy, Japan can directly appeal to the same Asia-bound graduates who might otherwise choose China or South Korea. By acting now, Japan has the potential to reverse its declining share and re-establish itself as a leading career destination for the world’s top graduates.

Assuming that Yale’s numbers reflect the entire population*56, we can conduct how a change in Japan’s selection rate of 1% will affect the numbers of students directed into Japan per scenario. For the baseline scenario 3,811 students would flow into Japan. For scenario A, 1,844. For scenario B, 3,430. And for Scenario C it would be the same as the baseline so 3,811 students. These numbers compounded over years can seriously replenish the missing supply for the demand Japanese markets have for international graduates. 

(Editor: Jelper Club Editorial Team)

Resources・Notes

1. "A Record-Breaking 1,582,808 Foreign Students in 2024" (Center for Immigration Studies): https://cis.org/Immigration-Studies/RecordBreaking-1582808-Foreign-Students-2024

2. "United States Hosts More Than 1.1 Million International Students at Higher Education Institutions, Reaching All-Time High" (IIE): https://www.iie.org/news/us-hosts-more-than-1-1-million-intl-students-at-higher-education-institutions-all-time-high/

3. "Optional Practical Training (OPT) for Foreign Students in the United States" (Congressional Research Service): https://www.congress.gov/crs-product/IF12631

4. "DHS Submits H-1B Weighted Selection Rule for Federal Review: Implications for Employers and Foreign Workers" (Greenberg Traurig): https://www.gtlaw-insidebusinessimmigration.com/h-1b/dhs-submits-h-1b-weighted-selection-rule-for-federal-review-implications-for-employers-and-foreign-workers/

5. "America may scrap OPT, putting Indian talent at risk. Can the US tech economy survive the blow?" (The Times of India): https://timesofindia.indiatimes.com/education/news/america-may-scrap-opt-putting-indian-talent-at-risk-can-the-us-tech-economy-survive-the-blow/articleshow/122964395.cms

6. "Gosar Reintroduces Legislation to Eliminate Program Favoring Foreign Workers over Americans" (Congressman Paul Gosar D.D.S.): https://gosar.house.gov/news/documentsingle.aspx?DocumentID=8784

7. "OPT available to foreign students in America faces risk of termination" (Financial Express): https://www.financialexpress.com/business/investing-abroad-optional-practical-training-program-available-to-foreign-students-faces-risk-of-termination-3916376

8. "Stakeholders call bluff on anti-OPT bill" (The PIE News): https://thepienews.com/news/stakeholders-call-bluff-on-anti-opt-bill/

9. "H-1B Visa: Why the Cap? A Look into Congressional History" (Berardi Immigration Law): https://berardiimmigrationlaw.com/h-1b-visa-why-the-cap-a-look-into-congressional-history/

10. “H-1B Cap Reached for FY 2025” (BOUNDLESS) : https://www.boundless.com/blog/h-1b-cap-reached-for-fy-2025/

11. "Text - H.R.2627 - 119th Congress (2025-2026): Keep STEM Talent Act of 2025" (Congress.gov): https://www.congress.gov/bill/119th-congress/house-bill/2627/text

12. "Issue Brief: Keep STEM Talent Act of 2025 (S. 1233/H.R. 2627)" (NAFSA): https://www.nafsa.org/policy-and-advocacy/policy-resources/issue-brief-keep-stem-talent-act-2023-s-729hr-1502

13. "King Cosponsors Bipartisan Legislation to Allow International Students Remain in the U.S." (Senator Angus King): https://www.king.senate.gov/newsroom/press-releases/king-cosponsors-bipartisan-legislation-to-allow-international-students-remain-in-the-us

14. "Tough days ahead for international students in US: Will OPT and visa duration be curtailed?" (The Times of India): https://timesofindia.indiatimes.com/world/us/tough-days-ahead-for-international-students-will-opt-and-visa-duration-be-curtailed/articleshow/115016233.cms

15. "International Students and Post-study Work Opportunities In The U.S.: Necessary but Vulnerable" (Presidents' Alliance): https://www.higheredimmigrationportal.org/effective_practice/international-students-and-post-study-work-opportunities-in-the-u-s/

16. "Can foreign students still work in the US? OPT programme faces scrutiny" (Business Standard): https://www.business-standard.com/immigration/can-foreign-students-still-work-in-the-us-opt-programme-faces-scrutiny-125060200142_1.html

17. "No More Opt for F-1 International Students" (U.S. Immigration Law Counselors): https://us-ilc.com/no-more-opt-for-f-1-international-students/

18. "Worldwide NIV Workload by Visa Category, FY 2024." (U.S. Dept. of State): https://travel.state.gov/content/dam/visas/Statistics/Non-Immigrant-Statistics/NIVWorkload/FY%202024NIVWorkloadbyVisaCategory.pdf

19. "International Students in the United States" (Migration Policy Institute): https://www.migrationpolicy.org/article/international-students-united-states

20. "Optional Practical Training (OPT): A Key Driver to Study in the U.S." (Presidents' Alliance): https://www.higheredimmigrationportal.org/policy/optional-practical-training-opt-a-key-driver-to-study-in-the-u-s/

21. "Skilled immigration on the chopping block: Effects of eliminating Optional Practical Training" (Peterson Institute for International Economics): https://www.piie.com/publications/working-papers/skilled-immigration-chopping-block-effects-eliminating-optional

22. "OPT's Critical Importance to Enrollment: the 2019 Open Doors Report" (WENR - WES): https://wenr.wes.org/2019/12/opts-critical-importance-to-enrollment-and-other-takeaways-from-the-2019-open-doors-report

23. "If You Extend It, They Will Come: The Effects of the STEM OPT Extension" (The CGO): https://www.thecgo.org/research/if-you-extend-it-they-will-come-the-effects-of-the-stem-opt-extension/

24. "International Student Salary" (ZipRecruiter): https://www.ziprecruiter.com/Salaries/International-Student-Salary

25. "International Graduate Salary" (ZipRecruiter): https://www.ziprecruiter.com/Salaries/International-Graduate-Salary

26. "How much do international students earn in the USA?" (The Continents States University): https://www.continents.us/how-much-do-international-students-earn-in-the-usa/

27. "Median Starting Salaries (by Institution): International Business" (College Transitions): https://www.collegetransitions.com/dataverse/median-starting-salaries-international-business/

28. “H1B Salaries of Estimator for FY* 2025” (H1B Grader) : https://h1bgrader.com/job-titles/estimator-rd0gwdmw2o/salaries/2025

29. "What is the average income for the average international student?" (Reddit): https://www.reddit.com/r/IntltoUSA/comments/1es97oj/what_is_the_average_income_for_the_average/

30. "Business Analyst H1B Salaries - Average, Min, Max by Company" (H1B Grader): https://h1bgrader.com/job-titles/business-analyst-60eqmzerOz/salaries

31. "Computer Programmer H1B Salaries - Average, Min, Max by Company" (H1B Grader): https://h1bgrader.com/job-titles/computer-programmer-op0lne5lkl/salaries

32. "H-1B wage levels: What will change in the new US immigration rules that will end visa lottery?" (The Times of India): https://timesofindia.indiatimes.com/world/us/h-1b-wage-levels-what-will-change-in-the-new-us-immigration-rules-that-will-end-visa-lottery/articleshow/122867117.cms

33. "Amazon, Google, Microsoft emerge top US employers for international students under OPT program" (Financial Express): https://www.financialexpress.com/business/investing-abroad-stem-opt-program-top-us-employers-for-foreign-students-in-2024-3879623/

34. "H-1B Visas Under Scrutiny as Big Tech Accelerates Layoffs" (Newsweek): https://www.newsweek.com/h1b-visa-immigrants-tech-jobs-impact-college-grads-2106392

35. "The Facts about Optional Practical Training (OPT) for Foreign Students" (Cato Institute): https://www.cato.org/blog/facts-about-optional-practical-training-opt-foreign-students

36. "SEVIS by the Numbers-2024 Annual Report" (U.S. ICE): (Note: The 2024 report is typically published mid-year; link will appear on ice.gov/sevis)

37. "Foreign Workers in Japan Hit New Record of Over 2 Million" (Nippon.com): https://www.nippon.com/en/japan-data/h01777/foreign-workers-in-japan-hit-new-record-of-over-2-million.html

38. "Japan firms say serious labour crunch hurting business - Reuters poll" (Reuters): https://www.reuters.com/world/asia-pacific/japan-firms-say-serious-labour-crunch-hurting-business-rtrs-poll-2023-08-15/

39. "Microsoft to invest $2.9 billion in AI and cloud infrastructure in Japan" (Microsoft News Center Asia): https://news.microsoft.com/asia/2024/04/09/microsoft-to-invest-2-9-billion-in-ai-and-cloud-infrastructure-in-japan/

40. "Highly Skilled Professional & J-Skip Visa Overview" (Ministry of Foreign Affairs of Japan): https://www.mofa.go.jp/ca/fna/page22e_000974.html

41. "Japan unveils $65 billion plan to aid domestic chip industry" (Reuters): https://www.reuters.com/technology/japan-unveils-65-bln-plan-aid-domestic-chip-industry-2023-11-29/

42. "Modernizing H-1B Requirements and Oversight and Providing Flexibility for the F-1 Program" (U.S. Citizenship and Immigration Services): (Note: This refers to proposed rulemaking; see updates on uscis.gov and federalregister.gov)

43. "H-1B Specialty Occupations" (U.S. Citizenship and Immigration Services): https://www.uscis.gov/working-in-the-united-states/h-1b-specialty-occupations

44. "H-1B Prevailing and Actual Wage Requirements" (Tufts University International Center): https://icenter.tufts.edu/departments/h1b-workers/h1b-wage-requirements/

45. "Prevailing Wages" (U.S. Department of Labor): https://flag.dol.gov/programs/prevailingwages

46. "How to Determine your H-1B Employee's Prevailing Wage Level" (Chugh, LLP): https://www.chugh.com/news/how-to-determine-your-h-1b-employee-s-prevailing-wage-level/

47. "H-1B visas and prevailing wage levels" (Economic Policy Institute): https://www.epi.org/publication/h-1b-visas-and-prevailing-wage-levels/

48. "How To Establish A Prevailing Wage For H-1B Visas" (Online Visas): https://onlinevisas.com/h1b-visa/how-to-establish-a-prevailing-wage-for-h-1b-visas/

49. "Business Analyst H1B Sponsors Data" (H1B Grader): https://h1bgrader.com/job-titles/business-analyst-60eqmzerOz

50. "H1B for Business Analyst" (Herman Legal Group): https://www.lawfirm4immigrants.com/h1b-for-business-analyst/

51. "Changed SOC Code to meet prevailing wage" (Reddit): https://www.reddit.com/r/h1b/comments/1fllu3l/changed_soc_code_to_meet_prevailing_wage/

52. Advanced International STEM Students Increasingly Anticipate Shorter-Term Work Stays After Graduation. (HIGHER ED IMMIGRATION PORTAL) : https://www.higheredimmigrationportal.org/research/advanced-international-stem-students-increasingly-anticipate-shorter-term-work-stays-after-graduation/

53. “International Graduate Salary” (ZipRecruiter) : https://www.ziprecruiter.com/Salaries/International-Graduate-Salary

54. ”Office of career strategy” (Yale College) : https://ocs.yale.edu/outcomes/#!eWVhcj0yMDI0

55. “THE IMPACT ON INTERNATIONAL STUDENTS OF ENDING THE H-1B LOTTERY” (NATIONAL FOUNDATION FOR AMERICAN POLICY) : https://nfap.com/wp-content/uploads/2021/05/The-Impact-on-International-Students-of-Ending-the-H-1B-Lottery.NFAP-Policy-Brief.May-2021.pdf?utm_source=chatgpt.com; Note that this is data from 2021.

56.  For illustrative purposes only