# Adjusting Program Fees for the Student and Exchange Visitor Program > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2019-10884 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** May 23, 2019 - **Citation:** 84 FR 23930 ## Text DEPARTMENT OF HOMELAND SECURITY 8 CFR Parts 103 and 214 [DHS No. ICEB-2017-0003] RIN 1653-AA74 Adjusting Program Fees for the Student and Exchange Visitor Program AGENCY: U.S. Immigration and Customs Enforcement (ICE), Department of Homeland Security. ACTION: Final rule. SUMMARY: This rule adjusts the Student and Exchange Visitor Program (SEVP) school certification petition fees and the application fees for nonimmigrants seeking to become academic (F visa) or vocational (M visa) students, or exchange visitors (J visa). The rule sets the following fees: $3,000 for a school certification petition; $655 for each school site visit; $1,250 to submit a school recertification petition; and $675 to submit an appeal or motion following a denial or withdrawal of a school petition. The rule also sets new fees for filing the Form I-901 at $350 for each F or M nonimmigrant student applicant and a $220 for most J exchange visitor applicants; however, the existing $35 fee for each J nonimmigrant exchange visitor seeking admission as an au pair, camp counselor, or summer work/travel program participant will remain the same. All fee payments addressed in this final rule must be made in the amounts established by this rule beginning June 24, 2019. DATES: This final rule is effective June 24, 2019. FOR FURTHER INFORMATION CONTACT: Sharon Snyder, Unit Chief, Student and Exchange Visitor Program; U.S. Immigration and Customs Enforcement, Department of Homeland Security; 500 12th Street SW, Washington, DC 20536; 703-603-3400, sevp@ice.dhs.gov. This is not a toll-free number. Program information can be found at http://www.ice.gov/sevis/. SUPPLEMENTARY INFORMATION: Table of Contents I. Executive Summary A. Purpose of Regulatory Action B. Summary of Major Provisions of Final Rule C. Costs and Benefits II. Background A. The 2018 NPRM and Purpose of the Rule B. Authority To Collect Fees III. Adjustment of SEVP Fees A. Basis for Fee Schedule B. SEVP Baseline Costs and Fees C. Methodology 1. ABC Approach 2. Full Cost 3. Cost Basis for SEVP Fees Based on Current Services D. Summary of the Full Cost Information 1. Fee Allocation 2. SEVP FY 2019 and FY 2020 Cost Model Result 3. Fee Calculations 4. Fee Levels IV. Technical Corrections to the Proposed Rule V. Public Comments on the Proposed Rule A. General Comments B. Comments on Timing of Fee Increase C. Comments on Enhancements 1. SEVIS Modernization 2. Increased SEVP Adjudication Personnel D. Comments on Specific Fees 1. Fee for F, M and J Nonimmigrants 2. Impacts on Specific Applicant Groups 3. Continued Fee of $35 for Au Pairs, Camp Counselors and Summer Work Travel 4. Recertification Fee 5. Site Visit Fee VI. Statutory and Regulatory Requirements A. Executive Orders 12866, 13563, and 13771: Regulatory Review 1. Background and Purpose of the Rule 2. Impacts of Regulatory Change 3. Alternatives to Regulatory Change B. Regulatory Flexibility Act 1. Final Regulatory Flexibility Analysis 2. A Statement of the Need for, and Objective of the Rule 3. A Statement of Significant Issues Raised by the Public Comments 4. The Response of the Agency to Any Comments Filed by the Chief Counsel for Advocacy of SBA 5. A Description and an Estimate of the Number of Small Entities 6. A Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Final Rule 7. A Description the Agency Has Taken To Minimize the Significant Economic Impacts C. Unfunded Mandates Reform Act D. Congressional Review Act E. Executive Order 13132: Federalism F. Executive Order 12988: Civil Justice Reform G. Energy Effects H. Environment I. Paperwork Reduction Act Table of Abbreviations and Acronyms ABC Activity Based Cost/Costing CFO Chief Financial Officer CTCEU Counterterrorism and Criminal Exploitation Unit DHS Department of Homeland Security DOS Department of State DSO Designated School Official EBSVERA Enhanced Border Security and Visa Entry Reform Act of 2002, Pub. L. 107-173; May 14, 2002 FASAB Federal Accounting Standards Advisory Board FISMA Federal Information Security Management Act Form I-17 Petition for Approval of School for Attendance by Nonimmigrant Student Form I-901 Fee Remittance for Certain F, J and M Nonimmigrants Form I-290B Notice of Appeal or Motion HSPD-2 Homeland Security Presidential Directive-2 ICE U.S. Immigration and Customs Enforcement IEFA Immigration Examinations Fee Account IIRIRA Illegal Immigration Reform and Immigrant Responsibility Act of 1996, as amended INA Immigration and Nationality Act of 1952, as amended MD Management Directive NEPA National Environmental Policy Act of 1969 NPRM Notice of Proposed Rulemaking OMB Office of Management and Budget PDSO Principal Designated School Official RFA Regulatory Flexibility Act SEVIS Student and Exchange Visitor Information System SEVP Student and Exchange Visitor Program SFFAS FASAB Statement of Federal Financial Accounting Standard UMRA Unfunded Mandates Reform Act of 1995 USCIS U.S. Citizenship and Immigration Services I. Executive Summary A. Purpose of Regulatory Action The Department of Homeland Security (DHS) is adjusting its fee schedule for nonimmigrant students and exchange visitors as well as for petitioning and certified schools. These fees are associated with SEVP and the Student and Exchange Visitor Information System (SEVIS). They were last adjusted in 2008. See 73 FR 55683 (Sept. 26, 2008). SEVP, an ICE component, is funded entirely by fees charged to individual applicants and organizational petitioners. Fees collected from individuals and organizations are deposited into the Immigration Examinations Fee Account (IEFA) and used to fund the operational costs associated with SEVP and its management of SEVIS. See Immigration and Nationality Act (INA) section 286(m), as amended, 8 U.S.C. 1356(m), and Illegal Immigration Reform and Immigrant Responsibility Act of 1996, as amended, (IIRIRA) section 641(e), (g), 8 U.S.C. 1372(e), (g). In accordance with the requirements and principles of the Chief Financial Officers Act of 1990, 31 U.S.C. 901-903 (CFO Act), and the Office of Management and Budget (OMB) Circular A-25, SEVP reviews its associated fees that are deposited into the IEFA biennially and, if necessary, proposes adjustments to ensure recovery of costs necessary to meet national security, customer service, and adjudicative processing goals. SEVP completed a biennial fee review for fiscal year (FY) 2016 and FY 2017 in 2017. The projected results indicated that fee levels were insufficient to recover the full cost of current and planned program activities. Section 286(m) of the INA, 8 U.S.C. 1356(m), provides that DHS may set fees for adjudication and naturalization services at a level that would ensure recovery of the full costs of providing such services, including the costs of providing similar services without charge to asylum applicants and certain other immigrants. Additionally, section 641 of IIRIRA, 8 U.S.C. 1372, authorizes DHS to periodically revise fees that cover the cost of carrying out SEVP and maintenance of SEVIS. Pursuant to these laws, DHS is implementing the adjustments contained in this rule. SEVP has calculated the totality of its operating costs to set fees that fully recover such costs. Following its biennial fee review, SEVP anticipated that if it continued to operate at previous fee levels, it would experience a revenue shortfall. At previous fee levels, SEVP's expenditures exceeded revenues, without any service upgrades. The deficit had been covered by surplus revenue that was previously accumulated from 2009 to 2015. As a consequence of multiple factors, including inflation, costs associated with SEVIS enhancement, complying with a two-year recertification cycle of schools, increased demand for program and investigatory services, and increased litigation related to administrative enforcement and regulatory actions, the surplus is expected to be exhausted in FY 2019 even without any further service upgrades. The projected shortfall poses a risk of degrading operations and services funded by fee revenue. The fee increases in this final rule will allow SEVP to cover the current deficit between revenue and expenditures plus make necessary service upgrades. The fee levels thus eliminate the risk of degrading operations, while also ensuring full cost recovery by providing fees for each specific benefit that will more adequately recover the cost associated with administering the benefit. B. Summary of Major Provisions of the Final Rule This rule adjusts, institutes, and clarifies the application of fees pertaining to services SEVP provides to reflect existing and projected operating costs, program requirements, and continued planned program improvements, in the following manner: • Increases the two types of individual nonimmigrant student and exchange visitor application fees, specifically the F and M fee for Form I-901, “Fee Remittance for Certain F, J and M Nonimmigrants,” to $350 and the Form I-901 Full J fee to $220; • Increases the SEVP school certification petition fee for initial certification to $3,000; • Imposes a fee of $1,250 when a school files a petition for recertification of its existing SEVP certification; • Imposes a $675 fee to accompany the filing of a Form I-290B, Notice of Appeal or Motion, when a school appeals or files a motion to reconsider or reopen a denial or withdrawal of its SEVP certification; and • Maintains the $655 fee for a site visit at its current level, but clarifies that, with the effective date of the rule, SEVP is exercising its current regulatory authority to charge the site visit fee when a certified school changes its physical location or adds a new physical location or campus on its Form I-17, Petition for Approval of School for Attendance by Nonimmigrant Student. In making these changes, the rule allows SEVP to fully fund activities included in this cost model and institute critical near-term program and system enhancements in a more equitable manner through a fairer balance of the recovery of SEVP operational costs between beneficiary classes. A summary of the current and future fee structures is provided in Table 1 below. C. Costs and Benefits With this final rule, SEVP will adjust fees to the amounts listed in Table 1: ER23MY19.006 SEVP expects to have a total annual increase in fees of $75.2 million in FY 2019 transferred from individuals and entities for the services they receive. Table 2 shows the summary of the total annual number of payments, incremental fee amounts, and total fees projected for FY 2019. This increase in fees will allow SEVP to not only maintain its current level of service but also enhance SEVP's capability to support national security and counter immigration fraud through the continued development and implementation of critical system and programmatic enhancements. Enhancements to SEVIS, including the establishment of a student portal, will assist designated school officials (DSOs) in their regulatory obligation to provide accurate and timely information and will also rebalance this reporting requirement by providing students an automated means to update their information. Increased numbers of adjudication personnel will assist in reducing the processing times for initial petitions, updates, and recertifications, while enhanced vetting protocols will ensure that only those nonimmigrant students who are eligible to enter and remain in the country do so. ER23MY19.007 II. Background A. The 2018 NPRM and Purpose of the Rule On July 17, 2018, DHS published a Notice of Proposed Rulemaking (NPRM) to amend the fees charged by SEVP. 83 FR 33762. This final rule implements those proposed changes by amending DHS regulations governing the fees charged by SEVP to F and/or M nonimmigrant students, schools that enroll such students, and fees charged to J nonimmigrant exchange visitors. SEVP helps ensure the integrity of the U.S. immigration system by collecting, maintaining, and analyzing information so only legitimate nonimmigrant students and exchange visitors gain admission into the United States under these programs, and by ensuring that the institutions accepting them are certified and follow the rules that govern them. The information collected by SEVP and compliance investigations conducted on students and educational institutions support other law enforcement activities within ICE. The rule adjusts the SEVP school certification fee and implements a recertification fee, increases student and exchange visitor application fees (Form I-901 fees), and imposes a fee for a Form I-290B filed with SEVP, to reflect existing program operating costs, program requirements, and planned program enhancements. DHS maintains the fee for an initial school site visit at the current level, but clarifies that, with the effective date of the rule, DHS will exercise its current regulatory authority to charge the site visit fee not only when a certified school changes its physical location, but also when it adds a new physical location or campus. The rule sets the fee for an initial school certification petition at $3,000 and the fee for each site visit at $655. It sets a $1,250 fee for a school recertification petition and a $675 fee to submit an appeal or motion following a denial or withdrawal of a school certification. Further, it sets the fee for each F or M student at $350. The rule sets the fee for certain J exchange visitors at $220 and maintains the fee for exchange visitors seeking admission as au pairs, camp counselors, and summer work/travel program participants at $35. All fee payments addressed in this final rule must be made in the amounts established by this rule beginning June 24, 2019. These fee adjustments are driven by two factors: The need to comply with statutory and regulatory requirements that SEVP review its fee structure biennially to ensure that the cost of the services that are provided by SEVP are captured by fees assessed on those receiving the services, and the need to enhance SEVP's capability to achieve current programmatic goals to support national security and counter immigration fraud through the development and implementation of critical system and programmatic enhancements. Enhancements to SEVIS, including the establishment and further expansion of a student portal, will assist designated school officials (DSOs) in their regulatory obligation to provide accurate and timely information and will also rebalance this reporting requirement by providing students an automated means to update their information. ICE continues to examine programmatic goals and refine its cost projection model. Future fee reviews may capture additional includable costs, such as additional enforcement costs generated by SEVP information or compliance investigations. The rule ensures the full recovery of SEVP operational costs in a manner that fairly allocates costs between beneficiary classes and facilitates the development of activities designed to achieve defined program goals. These include new initiatives critical to improving homeland security through enhanced vetting of SEVIS users, increased adjudication personnel, and SEVIS modernization. B. Authority To Collect Fees The Secretary is specifically authorized to collect fees for SEVP from prospective F and M nonimmigrant students and J nonimmigrant exchange visitors, subject to certain limits for certain J-1 nonimmigrants. 8 U.S.C. 1372(e)(1). The Secretary is authorized to periodically revise those fees, with certain exceptions, to take into account changes in the overall cost of carrying out the program. IIRIRA section 641(e)(4)(A), (g)(2), 8 U.S.C. 1372(e)(4)(A), (g)(2). Similarly, section 286(m) of the INA authorizes the Secretary to collect fees for adjudication and naturalization services at a level that would ensure recovery of the full costs of providing such services, including the costs of providing similar services without charge to asylum applicants and certain other immigrants. Additionally, pursuant to INA section 286(m), the level that is set may include recovery of any additional costs associated with the administration of the fees themselves. Under this authority, user fees are employed not only for the benefit of the payer of the fee and any collateral benefit resulting to the public, but also to provide a benefit to certain others. 1 1 DHS has interpreted section 286(m), including its authorization for DHS to collect “full costs” for providing “adjudication . . . services,” as granting DHS broad discretion to charge fees at a level that will ensure recovery of all direct and indirect costs associated with providing pertinent immigration adjudication services. This interpretation is also consistent with the SEVP-specific fee authority referenced above, which authorizes DHS to set fees at a level that funds the full cost of conducting the program. See IIRIRA section 641(e), 8 U.S.C. 1372(e). The longstanding interpretation of DHS is that the “including” clause in section 286(m) does not constrain DHS's fee authority under the statute. The “including'” clause offers only a non-exhaustive list of some of the costs that DHS may consider part of the full costs of providing adjudication and naturalization services. See 8 U.S.C. 1356(m); 81 FR 26903, 26906 n.10 (May 4, 2016). All fees collected under these authorities are deposited as offsetting receipts into the IEFA and remain available to the Secretary until expended for authorized purposes. See IIRIRA section 641(e)(4)(B), 8 U.S.C. 1372(e)(4)(B); INA section 286(m), 8 U.S.C. 1356(m). DHS is implementing the fee schedule contained in this rule in accordance with the above-referenced authorities. As a general matter, in developing fees and fee rules, DHS looks to a range of governmental accounting provisions, including OMB Circular A-25, User Charges (revised). See 58 FR 38142 (July 15, 1993). Section 6 of OMB Circular A-25 defines “full cost” to include all direct and indirect cost to any part of the federal government for providing a good, resource, or service. For the purposes of this rulemaking, DHS considers “full cost” to mean the cost of all activities related to individual and organizational compliance issues within the jurisdiction of SEVP that DHS included in the cost model. These activities include the cost of investigating the compliance of schools participating in SEVP and exchange visitor programs, as well as investigations in which F, M, or J nonimmigrants are identified as potential threats to national security or where it is suspected that an immigration violation or fraud may be occurring. DHS also considers OMB Circular A-11, Preparation, Submission and Execution of the Budget, section 51.13 (June 29, 2018), which states that budget requests should reflect the results of the biennial review of existing user charges and of the potential for establishing user charges, under OMB Circular A-25. This final rule adjusts fees in order to recover the cost of services provided by SEVP. In addition, DHS considers the Federal Accounting Standards Advisory Board (FASAB) Statement of Federal Financial Accounting Standards (SFFAS) No 4: Managerial Cost Accounting Concepts and Standards for the Federal Government, July 31, 1995, updated June 2018, which provides federal government standards regarding managerial cost accounting and full cost recovery. SFFAS No. 4 defines “full cost” to include “direct and indirect costs that contribute to the output, regardless of funding sources.” 2 FASAB identifies various classifications of costs to be included and recommends various methods of cost assignment to identify full cost. Activity-based costing (ABC) is highlighted as a costing methodology useful to determine full cost within an agency. The Chief Financial Officers Act of 1990, 31 U.S.C. 901-903, requires each agency's Chief Financial Officer (CFO) to “review, on a biennial basis, the fees, royalties, rents and other charges imposed by the agency for services and things of value it provides, and make recommendations on revising those charges to reflect cost incurred by it in providing those services and things of value.” 31 U.S.C. 902(a)(8). This final rule reflects consideration of these federal sector financial and accounting standards. 2 See FASAB, Statement of Federal Financial Accounting Standards 4: Managerial Cost Accounting Standards and Concepts 26 (June 2018), http://files.fasab.gov/pdffiles/handbook_sffas_4.pdf (last visited Oct. 26, 2018). III. Adjustment of SEVP Fees A. Basis for Fee Schedule As discussed in the NPRM, the new fees are based on estimates of funding needed to maintain and enhance SEVP's capability to achieve programmatic goals associated with its statutory mandate, including supporting national security and countering immigration fraud through the continued development and implementation of critical system and programmatic enhancements. This rule establishes the following fee structure detailed in Table 3. ER23MY19.008 The current fee structure includes the Form I-901 fee, I-17 school certification fee, and the site visit fee. By introducing fees for other services, this final rule allows SEVP to fully fund activities included in the cost model and institute critical near-term program and system enhancements in a more equitable manner. The new fee structure also includes the addition of a recertification fee and a fee for filing an appeal or motion. With this rule, SEVP imposes a fee for filing an appeal using Form I-290B that is similar to the current fee for appeals filed with U.S. Citizenship and Immigration Services (USCIS) using Form I-290B. See 8 CFR 103.7(b)(1)(i)(S) (listing the fee for appealing a decision over which the Board of Immigration Appeals does not have appellate jurisdiction). DHS also eliminates regulations that currently state there is no fee required for an appeal by a school, to maintain consistency and to more fairly balance allocation of the recovery of SEVP operational costs between beneficiary classes. Under this final rule, SEVP charges the fee for all appeals and motions. This rule ensures the recovery of SEVP operational costs in a manner that fairly allocates costs between beneficiary classes and facilitates the development of activities designed to achieve defined program goals. For example, the rule continues funding for critical SEVIS modernization efforts and incorporates the added cost of increased analytical support for investigative operations into the Form I-901 fee. The fee schedule will provide the necessary revenue for SEVP to fund approximately 20 additional SEVP adjudication personnel, including approximately 15 new frontline adjudicators. The additional adjudicators are intended to cover site visits which are authorized under a 2016 final rule, 3 augment out -of -cycle review teams, and reduce times for recertifications, updates, and initial applications. 3 See 81 FR 13039 (Mar. 11, 2016). B. SEVP Baseline Costs and Fees SEVP fees are paid by individuals and organizations. DHS certifies schools that enroll F and M students; recertifies schools with active certifications; conducts site visits; administers, maintains, and develops SEVIS; collects fees from prospective F and M nonimmigrant students and J nonimmigrant exchange visitors, as well as from schools; adjudicates motions and appeals in regard to certification petitions; undertakes investigatory initiatives; and provides overall guidance to schools about program enrollment and compliance, as well as the use of SEVIS. These activities are funded solely through the collection of fees. The Form I-901 fee, collected from students and exchange visitors, currently underwrites the operation of SEVP; the cost of administering, maintaining, and developing SEVIS; the cost of school recertification; and all activities related to individual and organizational compliance issues within the jurisdiction of SEVP. These activities include the cost of investigating the compliance of schools participating in SEVP and exchange visitor programs, as well as investigations in which F, M, or J nonimmigrants are identified as potential threats to national security or where it is suspected that an immigration violation or fraud may be occurring. The certification fee is paid by schools that petition for the authority to issue Certificates of Eligibility (COE), commonly referred to as Forms I-20, to prospective nonimmigrant students for the purpose of their applying for F or M visas and admission to the United States in those statuses. These monies fund the base internal cost for SEVP to process and adjudicate the initial school certification petition (Form I-17). The recertification fee paid by schools to remain certified partially funds the cost of adjudicating the recertification petition. If SEVP finds that a petitioning or certified school does not meet regulatory standards, it will deny the affected school's Form I-17 or withdraw its SEVP certification. 8 CFR 214.4. When SEVP sends a school a notice of denial or withdrawal, the notice also includes reasons for the unfavorable decision(s), an explanation of the school's rights, and the applicable appeal and motion filing information and deadlines. In many cases, a school may file an appeal or motion to reopen and/or reconsider unfavorable decisions issued by SEVP by filing the Form I-290B pursuant to the process set forth in 8 CFR 103.3(a) or 103.5(a). 4 A school may initiate a motion to reopen or reconsider to request that the original deciding body review the unfavorable decision, including an appeals decision, pursuant to requirements in 8 CFR 103.5(a). A school may also initiate an appeal in order to request review of the unfavorable Notice of Denial, Automatic Withdrawal, or Withdrawal on Notice by an authority independent of the original deciding body. Currently, DHS uses Form I-901 funds to offset the costs of SEVP appeals and motions. As noted in the proposed rule, DHS believes that the introduction of an appeal fee will result in a more equitable distribution of costs. Although DHS declined to introduce such a fee in 2008, DHS believes that given the costs of the appeal process and the increase in the I-901 fee, it is appropriate to establish an appeal fee at this time. With this rule, DHS removes the SEVP-related exceptions to the payment of the Form I-290B fee and adds regulatory text at 8 CFR 103.7(b)(1)(ii)(O) providing for the fee of $675 when the Form I-290B is filed with SEVP. This fee applies when schools or institutions file an appeal or motion with regard to a denied petition for initial certification or recertification or a withdrawal of certification. 4 Form I-290B is managed by USCIS and not ICE. USCIS has agreed to the use of the form by ICE for SEVP appeals and the use has been approved by OMB under control number 1615-0095. With these regulatory changes for the Form I-290B filing fee, DHS more fairly balances allocation of the recovery of SEVP operational costs among beneficiary classes. To date, the cost of adjudicating appeals and motions has never been placed directly upon the beneficiaries of those adjudications—the schools seeking to obtain or maintain SEVP certification. The fee for filing the Form I-290B with SEVP is set at a level that requires those who file the Form I-290B to pay for at least a portion of the operating expenses for DHS to adjudicate the Form I-290B, while preventing the fee from becoming cost-prohibitive. The site visit fee is currently paid by schools that petition for certification to issue Forms I-20 or by a certified school when it physically moves to a new location. DHS established this fee in the 2008 Fee Rule and with that rule codified SEVP's authority to charge the fee when a school changes its physical location or adds a new physical location or campus. See 8 CFR 103.7(b)(3)(ii)(B), 8 CFR 214.3(h)(3)(i), (ii). Specifically, the 2008 Fee Rule imposed a site visit fee of $655 for each location listed on the Form I-17, and required the Form I-17 to include “any physical location in which a nonimmigrant can attend classes through the school ( i.e., campus, extension campuses, satellite campuses, etc.).” See 73 FR 55683, 55698-55699 (amending 8 CFR 103.7(b)(3)(ii)(B) and 214.3(a)(1), respectively). The 2008 Fee Rule also imposed a continuing duty on schools to update school locations as changes arise, i.e., even after initial certification, a school must update SEVIS within 21 days of a change to a range of information types, including school location and campus location. See 73 FR 55683, 55700 (amending 8 CFR 214.3(g)(2), (h)(3)). Consistent with the aforementioned regulatory amendments, the preamble to the 2008 Fee Rule made clear that these provisions require the imposition of a site visit fee for each location listed on the initial SEVP certification, as well as each location added as part of an initial event, such as a SEVIS update requesting approval of a changed or new location or campus. 73 FR 55683, 55691. SEVP will begin collecting the fee when a certified school adds a new physical location or campus following the effective date of this final rule. The site visit fee applies when a certified school updates its Form I-17 in SEVIS to indicate, pursuant to 8 CFR 214.3(h)(3)(ii), it is changing its physical location or adding a new physical location or campus. This revenue assists in recovering the costs DHS incurs for site visits of these locations, including collecting evidence on school eligibility for certification, reviewing the facilities, and interviewing personnel nominated on the petition to become DSOs, including the person nominated to be the Principal Designated School Official (PDSO). C. Methodology SEVP captured and allocated cost using an ABC approach to define full cost with regards to current SEVP activities and planned enhancements, outline the sources of SEVP cost, and define the fees. The ABC approach also provides detailed information on the cost and activities allocated to each fee. 1. ABC Approach SEVP used CostPerform ABC modeling software, Version 9.3 (0147), to determine the full cost associated with updating and maintaining SEVIS to collect and maintain information on F, M, and J nonimmigrants; certifying schools; overseeing school compliance; recertifying schools; adjudicating appeals; investigating suspected violations of immigration law and other potential threats to national security by F, M, or J nonimmigrants; providing outreach and education to users; and performing regulatory and policy analysis. SEVP also used the model to identify management and overhead costs associated with the program. ABC is a business management methodology that links inputs (cost) and outputs (products and services) by quantifying how work is performed in an organization (activities). The ABC methodology allows fee-funded organizations to trace service costs and to calculate an appropriate fee for the service, based on the cost of activities associated with the services for which the fee is levied. Using the ABC methodology, SEVP identified and defined the activities needed to support SEVP functions to include current and future initiatives. SEVP captured the full cost of operations for current activities and planned enhancements and apportioned that full cost to the appropriate program activities. The full cost of each activity is then assigned to the appropriate fee category based on the nature of the activity, as described further below. By tracking costs to the various fee categories, SEVP was able to use forecasted payments to determine the appropriate fee amount for each fee type. SEVP examined historical data and performed statistical payment analysis to forecast payments in future years. SEVP used an independent contractor and commercially available ABC software to compute the fees. The structure of the software was tailored to SEVP needs for continual and real-time fee review and cost management. 2. Full Cost In building the ABC model, it was critical for SEVP to identify the sources and cost for all elements of the program, including all activities related to individual and organizational compliance issues within the jurisdiction of SEVP. These activities include the cost of investigating the compliance of schools participating in SEVP and exchange visitor programs, as well as investigations in which F, M, or J nonimmigrants are identified as potential threats to national security or where it is suspected that an immigration violation or fraud may be occurring. Consistent with instructive legislative and regulatory guidance, SEVP fees recoup the full cost of providing SEVP's overall resources and services. 5 The amended fees are calculated to recoup the cost of current SEVP operations, including planned enhancements detailed in the NPRM. 5 These include but are not limited to: Direct and indirect personnel cost, including salaries and fringe benefits, such as medical insurance and retirement; retirement cost, including all (funded or unfunded) accrued cost not covered by employee contributions, as specified in OMB Circular A-11; overhead, consulting, and other indirect cost, including material and supply cost, utilities, insurance, travel, as well as rents or imputed rents on land, buildings, and equipment; management and supervisory cost; and cost of enforcement, collection, research, establishment of standards, and regulation. To the extent applicable, SEVP used the cost accounting concepts and standards recommended in the FASAB Handbook, Version 15, “Statement of Financial Accounting Standards Number 4, Managerial Cost Accounting Concepts and Standards for the Federal Government” (2016). FASAB Standard Number 4 sets the following five standards as fundamental elements of managerial cost accounting: (1) Accumulate and report cost of activities on a regular basis for management information purposes, (2) establish responsibility segments and match the cost of each segment with its outputs, (3) determine the full cost of government goods and services, 6 (4) recognize the costs of goods and services provided among federal entities, and (5) use appropriate costing methodologies to accumulate and assign costs to outputs. 6 Full cost includes the costs associated with resources that directly or indirectly contribute to the output and supporting services within the entity and from other entities. SEVP calculates projected fees using the full cost of SEVP current activities and planned enhancements, as defined by a regularly updated spend plan. The projected spend plans for FY 2019 and FY 2020 were used in calculation of SEVP's new fee structure. Tables 4 through 7 detail the full cost of SEVP operations, consistent with the spend plan, from various perspectives: By program category, by cost initiative, by fee type, and by activity. As with the previous fee adjustment in 2008, the goal of ICE compliance efforts is to achieve full compliance with F, M, and J nonimmigrant regulations by institutions participating in these programs and to prevent any abuse of SEVP for criminal purposes. Through consistent and expanded enforcement of SEVP requirements, the integrity of the F, M, and J nonimmigrant student and exchange visitor programs within the United States is better maintained. ICE continues to examine programmatic goals and refine its cost projection models. Future fee reviews may capture additional includable costs, such as additional enforcement costs for activities resulting from SEVP information or related compliance investigations. 3. Cost Basis for SEVP Fees Based on Current Services The FY 2019 and FY 2020 budgets provide the cost basis for the fees. These budgets reflect the required revenue to sustain current initiatives. The revenue is also assessed to ensure a sufficient level of continued funding for program enhancements as discussed above, such as enhanced vetting and investigative analysis to support enforcement operations, SEVIS modernization, and increased numbers of adjudication personnel. Finally, the past budgets provide the cost basis for adjusting annualized cost-of-living increases. Determining the projected cost for continuation of current efforts involved routine budget projection processes. The budget establishes the current services of the program and projects the mandatory and cost-of-living adjustments necessary to maintain current services. The budget adjusts the services provided by SEVP to include enhancements that reflect program policy decisions. Table 4 reflects the FY 2017 final budget, the FY 2018 approved budget, and the FY 2019 and FY 2020 planned budget requests. BILLING CODE 9111-28-P ER23MY19.009 D. Summary of the Full Cost Information The total cost projection for FY 2019 is $186,610,000 and for FY 2020 is $188,405,000. Table 4 sets out the projected current services for SEVP and supporting Counterterrorism and Criminal Exploitation Unit (CTCEU) and HSI Domestic Operations personnel in FY 2019 ($74.45 million) and FY 2020 ($74.45 million). These costs are direct extensions of the FY 2018 costs that are supported by the current fees. Table 5 summarizes the enhancements and other costs, which include investigative analysis, SEVIS Modernization, increased numbers of adjudication personnel, and annualized inflation. ER23MY19.010 1. Fee Allocation The purpose of the ABC methodology is to trace costs to organizational elements, as well as identify all cost components associated with the services offered. For fee-based organizations such as SEVP, this allows the assignment of cost to one or more fees. SEVP defined five fee categories: The Form I-901 fee, certification fee, recertification fee, fee for filing an appeal or motion, and site visit fee. Recently SEVP has only collected fees from students and exchange visitors—the Form I-901 fee—and from schools applying for certification, to include a separate site visit fee. In this analysis, SEVP considered the creation of additional fee categories for all the distinct services it provides in deciding how to apportion fees. For example, SEVP considered charging a separate Form I-901 fee to F, M, and J dependents. SEVP also examined various tiered fee structures and considered assigning some specific costs to separate fees. The ABC fee model allowed SEVP to evaluate these scenarios for services provided directly by SEVP. DHS opted for an updated fee structure that segments program cost to the appropriate fee—F and M nonimmigrant students, J nonimmigrant exchange visitors, or schools. The adjusted Form I-901 fee recovers the systems cost for SEVIS, including the remainder of certification, recertification, site visits, as well as appeals and motions costs that are not covered by the respective new fees. The Form I-901 fee is apportioned between three categories—full fee of $350 for F and M students, reduced fee of $220 for most J participants, and the further reduced fee of $35 for certain J program participants. Federal Government-sponsored J program participants are fee-exempt by law, so their costs will be funded by other fee payers. 8 U.S.C. 1372(e)(3). The adjusted school certification fee recovers a portion of the costs necessary to process initial school certifications. The new recertification fee recovers a portion of the cost to process school recertifications and a portion of SEVP administrative costs. The adjusted site visit fee recovers the full cost of performing the site visit upon initial school certification and when a school changes its physical location or adds a new physical location or campus. The new fee for filing an appeal or motion recovers a portion of the cost to process an appeal or motion. The remainder of these costs are covered by the adjusted Form I-901 fee as detailed in the preceding paragraph. 2. SEVP FY 2019 and FY 2020 Cost Model Results Table 6 shows the summary of SEVP FY 2019 and FY 2020 cost by source of cost. ER23MY19.011 Table 7 shows a more detailed cost breakdown. The numbers are shown in thousands, rather than millions, of dollars due to the level of detail. There are two levels for the costs: Process and activity. Costs are allocated from payroll, contracts, and other expenses to activities through activity surveys and volume based cost allocations. The full cost of operations from the spend plans is distributed to the activities that best describe the work being performed. Table 7 details these costs from an activity perspective. To simplify the presentation, the numbers are rounded to the nearest thousand. These numbers are not rounded in the cost model. 7 SEVP Automated Management System ER23MY19.012 ER23MY19.013 3. Fee Calculations The cost model provides detailed cost information by activity and a summary cost for each, giving the aggregate fee cost by category. Next, SEVP projected the total number of fee payments of each type for FY 2019 and FY 2020 and determined the fee-recoverable budget. SEVP selected a forecasting approach to determine the total number of expected fee payments for each fee. a. Form I-901 Fee To calculate fee amounts for the Form I-901 fee, SEVP estimated the number of fee payments expected in FY 2019 and FY 2020 for each of the three fee payment types: The reduced fee for J participants (excluding the additional cost for initial certification and recertification of SEVP-certified schools); the full fee for J participants (excluding the additional cost for initial certification and recertification of SEVP-certified schools); and the full fee for F and M nonimmigrant students (including additional costs for certification, recertification, and appeals). The total fee category budget is taken directly from the FY 2019 and FY 2020 SEVP ABC model, reflected in Table 8 and Table 9. ER23MY19.014 ER23MY19.015 Form I-901 fees are calculated by dividing the fee-recoverable budget by the anticipated number of payments. This results in a fee-recoverable amount of $290 for all F and M payments and $130 for both the J Full and J Partial fees. Model results indicate a required fee of $290 before addition of additional costs of other fee types, discussed throughout the remainder of the document. Additional costs of subsidization of other SEVP fees results in a F/M fee of $350. For reasons discussed below related to the $35 J-Partial fee, DHS must increase the J-Full fee by a proportional amount to cover the cost of operating the J program. This results in a J-Full fee of $220.Calculations for each of the three fee payment types vary because each fee type is treated differently in federal statutes and regulations. Section 641 of IIRIRA exempts Federal Government-sponsored J-1 nonimmigrant exchange visitors from the fee payment. Prior to this final rule, all F and M nonimmigrant students were required to pay $200, and nonexempt J nonimmigrant exchange visitors were required to pay $180. 8 CFR 103.7(b)(1)(ii)(H), 214.13(a). Congress modified the statute in December of 2000 to establish a reduced fee of $35 for au pairs, camp counselors, or participants in a summer work travel program, demonstrating strong congressional intent that the fee remain at that level. Act of Dec. 21, 2000, Public Law 106-553, app. B, sec. 110, 114 Stat. 2762, 2762A-51, 2762A-68. IIRIRA also provided for revising the fee once the program to collect information was expanded to include information collection on all F, M, and J nonimmigrants. As a result, the Form I-901 fee was revised in 2008 under the provisions of IIRIRA to take into account the actual cost of carrying out the program. See 73 FR 55683. The Form I-901 fee is now being revised a second time, through this rule, due to an increase in the actual cost of carrying out the program. SEVP determined the number of expected Form I-901 fee payments in FY 2019 and FY 2020. SEVP calculated the Form I-901 fee over a 2-year period to account for potential fluctuation in the forecast. SEVP used the change in the numbers of payments received to provide the trend data used to forecast Form I-901 fee payments for each Form I-901 payment type separately. Table 10 reflects aggregate historical payment data for all three Form I-901 payment types. ER23MY19.016 As indicated in Table 10, the level of payments received varied greatly over the past 10 years. This high degree of variation in the historical data, combined with the variables affecting demand for visas, called for a forecasting methodology that would capture and account for deviations. SEVP selected a statistical forecasting method that uses trends in historical data to forecast future payments. SEVP selected ARIMA, an autoregressive integrated moving average model to forecast payments. An ARIMA model is a statistical model that uses historical time series data to predict future trends and movements. A non-seasonal model incorporates two major components: Trend and moving average. The autoregressive portion of the model, or trend, states that past values have an effect on current or future values and that values are estimated based on the weighted sum of past values. The second component is moving average which helps to smooth out the time series to filter out extreme fluctuations or outliers. In some cases, a third component is needed: Seasonality. Visa data from 2004 to the present shows extreme seasonality in the number of F, M, and J visas issued. Seasonality is factored into the model to account for the U.S. academic calendar. SEVP evaluated alternative forecasting methods; however, SEVP rejected these methods due to inaccuracy, poor fit, and limited data. SEVP's chosen model provided a conservative forecast that will allow SEVP to operate with stability. The fee payment forecast, reflected in Table 11, places a balanced mix of emphasis on recent and historical data and still contains sufficient data points to smooth out some variability in the underlying data. ER23MY19.017 b. Certification Cost SEVP uses historical data from FY 2012 to FY 2016 (Table 12) to find a three year moving average to forecast annual new initial certifications. SEVP predicts demand of approximately 426 initial certifications each year, which assumes the higher fee will not deter schools from applying for certification at a lower rate than the historical average. Historically, SEVP has used a forecasted increase in payments of approximately one percent annually due to the financial benefits schools derive from foreign student enrollment, but recent data on payments has led SEVP to apply a conservative zero percent growth. ER23MY19.018 The total fee category budget is taken directly from the FY 2019 and FY 2020 SEVP ABC model, reflected in Table 13. ER23MY19.019 School certification fees are calculated by dividing the fee-recoverable budget by the anticipated number of payments. This results in a fee-recoverable amount from schools of $4,580 each. To arrive at the new fee, rounding was applied to the result of the fee algorithm. This results in a certification fee of $4,600 per school. Setting the certification fee at the $4,600 figure, however, leads to an increase of the current school certification fee by $2,900, resulting in a certification fee over twice the current fee amount. School certification is integral to SEVP—F and M nonimmigrant students can only attend SEVP-certified schools. While DHS is increasing the fee to ensure a more equitable distribution of costs, such a fee level could discourage potential new schools from seeking certification. At the same time, DHS considers that initial certification bestows upon the school a valuable asset, the ability to enroll F and M nonimmigrant students, and an increased fee amount is reasonable as the initial certification process becomes more extensive through the SEVIS modernization and other technological developments. Weighing these concerns, DHS decided to subsidize the Form I-17 school certification fee by increasing the payment by only $1,300 to $3,000. The remainder of the costs for Form I-17 school certification is subsidized by the Form I-901 F and M fee, which is addressed below. c. Recertification Cost To identify a fee level that would recover the full cost of recertification operations, SEVP determined the full cost of recertification (including level of effort and contract cost) and the approximate number of schools willing to recertify (Table 14). Because schools are required to recertify every two years, SEVP anticipates that approximately one-half of its certified schools—roughly 4,373 schools per year, given the current certified school population of 8,746—would recertify. ER23MY19.020 To calculate an anticipated school recertification fee, DHS divides the fee-recoverable budget by the anticipated number of payments. This results in a fee-recoverable amount from schools of $5,925.74 each. To arrive at the new fee, rounding was applied to the result of the fee algorithm. This resulted in a recertification fee of $6,000 per school. DHS desires to institute a recertification fee to more accurately assign the costs of recertification adjudication to those stakeholders who are directly requesting the adjudication—the SEVP-certified schools—particularly since the costs of recertification continue to increase as the recertification process becomes more robust. These increased costs are due to increased review of school records and other information submitted by schools as part of recertification to ensure that schools are remaining in compliance with all requirements. Ensuring compliance is a statutory requirement under EBSVERA that has been reaffirmed through the results of GAO audits and other Executive Branch reviews of SEVP operations. For example, as part of recertification, SEVP adjudicators independently verify state licenses, accreditation information, and other related information. SEVP is continuously trying to find ways to perform these checks more efficiently to reduce the burden. These reviews should become less burdensome as the modernization of SEVIS continues and more information becomes automated. DHS considers that the recertification amount should be less than the initial certification amount so that schools are encouraged to seek recertification instead of allowing their SEVP certification to be withdrawn and applying for initial certification anew at some later date. Withdrawal of SEVP-certification not only leads to the school losing a valuable asset, but also leads to complications for F and M nonimmigrant students enrolled in the withdrawn school, who are then forced to transfer schools, leave the United States, or risk facing immigration law penalties for violating the terms of their nonimmigrant status. In such circumstances, the school may bear administrative costs to help students transfer to a certified school. Affected students bear costs as well. Weighing all these factors, DHS sets the Form I-17 recertification fee at $1,250. With this rule, DHS eliminates regulations that state that no fee is required for the school recertification process in order to recover part of this cost, as part of an effort to establish a more equitable distribution of costs and more sustainable level of cost recovery relative to services provided. The costs for Form I-17 school recertification not recovered by the new fee are subsidized by the Form I-901 F and M fee. The explanation for shifting responsibility of the fee adjustment to the Form I-901 fee is included below. d. Site Visit Cost Site visits consist of initial certification site visits, change of location visits, and new campus or location site visits (Table 15). The anticipated workload for these site visits is 600 per year, or 1,200 visits over a 2-year period. ER23MY19.021 The current fee amount is $655 as established in the 2008 Fee Rule that codified SEVP's authority to charge the fee when a school changes its physical location or adds new physical location or campus. Following this rule's effective date, SEVP will collect the fee when a certified school adds a new physical location or campus. Thus, in addition to the site fee(s) required upon initial certification, the site visit fee will now apply when a certified school updates its Form I-17 in SEVIS to indicate, pursuant to 8 CFR 214.3(h)(1)(ii), an added physical location or campus. The site visit fee is based on level of effort for both SEVP staff and contracts that cover the cost of operations. e. Appeals and Motions Cost Determining the full cost of processing an appeal is essential to improving the fee structure. The fee for filing an appeal or motion is calculated by determining the workload of appeals and motions over the FY 2019 and FY 2020 periods. Over the past two years, SEVP has processed 54 appeals and motions annually. To maintain conservative estimates, SEVP anticipates that number will remain constant over the FY 2019 and FY 2020 periods (Table 16). ER23MY19.022 BILLING CODE 9111-28-C Fees for motions or appeals are calculated by dividing the fee-recoverable budget by the anticipated number of payments over the FY 2019 and FY 2020 periods. This results in a fee-recoverable amount of $38,474 for each appeal. The relative costs of seasoned federal employees involved in rendering a decision and the few petitioners result in costs that SEVP felt should be subsidized. To arrive at the final cost, rounding was applied to the result of the fee algorithm. This results in a cost for a motion or appeal of $38,500. SEVP believes that this fee, while justified, is too high to impose on the affected schools as the first fee to be established and collected for the subject appeals and motions, and that some accommodation should be made to keep the fee at a more reasonable amount. 8 Instead, DHS is adding $4.76 to the Form I-901 F and M fees to counterbalance the unfunded costs of adjudicating appeals and motions. This will better ensure that cost is not a significant obstacle in pursuing an administrative appeal or motion. The Form I-290B fee when filed with SEVP is set at $675, which is currently the same amount charged when the form is filed with USCIS. See 8 CFR 103.7(b)(1)(i)(S). 9 The Form I-290B filed with USCIS is the same form used for appeals or motions related to any denial of school certification or recertification or a withdrawal of such certification. Although the appeal fee is not set at the amount necessary to recover the full costs of appeals and motions, by setting a fee of $675, schools that benefit from the appeal process bear some of its costs, and DHS more fairly balances allocation of the recovery of SEVP operational costs between beneficiary classes. DHS will charge the fee for all such appeals and motions. 8 If a school is denied certification or withdrawn from certification, it can file an appeal with an independent Administrative Appeals Team (AAT). The AAT has sustained approximately 92 percent of decisions. 9 Because the underlying rationale for the amount of the I-290B fee differs between SEVP and USCIS, DHS may change the I-290B fee for USCIS but not for SEVP, meaning the Form I-290B may have two different fees in the future. 4. Fee Levels Viewing the SEVP fee structure and affected parties comprehensively, DHS is adjusting each fee in its fee structure based not only on cost of services, but also on the desire to spread the impact of fee increases reasonably among the various beneficiaries of SEVP services. Despite the ABC calculations' determination of the actual cost of each service, which is represented by each fee, DHS has determined that using the Form I-901 revenue to subsidize the costs of the SEVP's other fees is an appropriate course of action for two reasons. First, the number of F and M students paying the Form I-901 fee is substantially larger than the number of entities paying each of the school certification-related fees, allowing for SEVP to lessen the impact of fee increases in the aggregate. Second, the subsidization is reasonable because individuals paying the Form I-901 fee necessarily benefit from the continued certification of schools for their enrollment and prompt and accurate adjudication of appeals. DHS is increasing the Form I-901 fee for F and M students from $200 to $350 and the full Form I-901 fee which applies to most J exchange visitors from $180 to $220. These fees have been unchanged since 2008. 73 FR 55683 (Sept. 26, 2008). In 2008, the first time these fees had been updated since SEVP's inception in 2004, the Form I-901 fee for F and M students increased from $100 to $200, and the Form I-901 J full fee increased from $100 to $180. See id. The Form I-901 fee for special J-visa categories (au pair, camp counselor, and summer work travel) remains at the current $35 level, consistent with the levels set by Congress in 8 U.S.C. 1372(e)(4)(A). IIRIRA also exempts from the Form I-901 fee J-1 exchange visitors who participate in Federal Government-sponsored J-1 exchange programs. 8 U.S.C. 1372(e)(3). DHS is increasing the initial certification fee from $1,700 to $3,000. This fee was originally set at $230, effective in 2002, prior to the reorganization of the Immigration and Naturalization Service (INS) to become part of DHS. See 66 FR 65811 (Dec. 21, 2001). The fee was increased in 2008 to $1,700. See 73 FR 55683. This is the base fee for certification and does not include the site visit fee. DHS is establishing a recertification fee at $1,250, maintaining the site visit fee of $655, and sets the Form I-290B fee at $675. The cost for SEVP recertification, site visits, and motions and appeals adjudication is determined by employing ABC principles, described in the proposed rule, balanced with SEVP's desire to prevent recertifications, site visits, appeals, and motions filings from becoming cost-prohibitive. See 83 FR 33762, 33771. DHS is setting a recertification fee and setting a Form I-290B fee for the first time, and SEVP believes that charging recertification and appeals fees sufficient to recover, on their own, the fee-recoverable amount for such services, may result in inordinately high fees from the perspective of entities who have regularly received the benefits of these SEVP services at no additional charge. As noted below, public comments received in response to the NPRM supported this assessment. Accordingly, DHS is setting these fees at amounts below the fee-recoverable cost. For the Form I-290B fee in particular, DHS is setting the amount at $675. DHS believes this amount best addresses concerns raised in public comments about entities paying a Form I-290B fee for the first time because it is less than both the fee for initial certification and the fee for recertification. Further, the amount $675 is already associated with the Form I-290B when filing it with USCIS. DHS believes $675 is a logical starting point, because this is the fee currently being charged by USCIS for motions and appeals. While the difference between the fee-recoverable amount (approximately $38,500) and the fee of $675 is substantial, subsidizing this fee by driving the additional costs to the Form I-901 fee results in an increase of only $4.76 to F/M students paying that fee. The program fee schedule for SEVP beginning in FY 2019 is shown in Table 17. BILLING CODE 9111-28-P ER23MY19.023 These fee amounts, the cost model outputs, and cost reallocation amounts are shown in Table 18. The cost reallocation amounts are negative for the fees that are subsidized. The cost reallocation amounts that are positive are the amounts per fee that subsidize the other fee categories. ER23MY19.024 Table 19 reflects the break-even analysis based on the fee schedule and the proportional fee volumes (rounded) required to generate sufficient revenue to offset projected program costs. ER23MY19.025 BILLING CODE 9111-28-C IV. Technical Corrections to the Proposed Rule DHS identified six sets of required technical corrections to the proposed rule, as follows. First, DHS identified that in the NPRM's Table 7: Form I-901 Fee Payment Forecast FY 2019-FY 2020, contained a minor mathematical error due to rounding. On line three, column three, FY 2020 full payment, J-Full, stated as 153,611 is corrected to 153,612 in what is Table 11 of this final rule. Second, DHS changed a corresponding number in the NPRM's Table 22: Form I-901 Full J Fee Payments FYs 2010-2017 (Table 24 in this final rule), line 16, column 2 from 153,611 to the corrected 153,612. DHS also made two additional conforming corrections in the preamble text where the incorrect figure 153,611 was changed to 153,612 and in accordance corrected a sum of total increase in transfer payments from I-901 J-Full applicants from $12,446,440 to $12,446,480. These changes are minor and do not change the substance of the rule. Third, DHS discovered that the NPRM's Table 17: Projected Revenue—FY 2019 and FY 2020, contained the following four errors: • On line two, column four, a mathematical error indicating the forecasted I-901 F/M Full revenue as $289,214,144. The entry of $289,214,144 is corrected to $289,214,100. • On line three, column four, a correlating mathematical error indicating the forecasted I-901 J-Full fee revenue as $68,455,584. The entry of $68,455,584 is corrected to $68,455,640. • On line three, column two, a typographical error stating “210” for the Form I-901 fee the “J-Full” category. The correct amount, as included and discussed elsewhere in the proposed rule, is “220.” • On line eleven, column four, a correlating mathematical error indicating the total forecasted revenue as $383,143,278. The entry of $383,143,278 is corrected to $383,125,290. The proposed rule included and discussed the correct “220” figure at several points in the document, and no commenter expressed confusion over these proposed dollar amounts. Fourth, DHS identified a section of the NPRM's proposed regulatory text at 8 CFR 103.7(b)(1)(ii)(B) that could be confusing to some readers. Though no commenters expressed confusion about the provision, DHS determined that the text, as published in the NPRM, made it appear as though a school going through recertification would be required to pay the $3,000 initial certification fee in addition to the $1,250 recertification fee, plus $655 per additional site. As previously noted throughout the preamble to the NPRM, the $1,250 recertification fee is charged in lieu of the full $3,000 fee for an initial certification, and an additional fee of $655 is charged when a certified school reports a new physical location where it provides education to international students and which was not previously reported on its Form I-17. See, e.g., 83 FR 33762, 33771 (discussing the basis and purpose of DHS's intention to collect a site visit fee when a school changes or adds a new physical location or campus), 33773 (noting different costs for initial certification and recertification processes), 33776 (describing the fee-recoverable amount of recertification separately from initial certification), 33781-82 & 33788-89 (explaining the impact of the recertification fee). DHS amends the regulatory text at 8 CFR 103.7(b)(1)(ii)(B) to clarify this provision. Fifth, DHS identified a section of the NPRM's proposed regulatory text at 8 CFR 103.7(b)(1)(ii)(H) that unnecessarily referred to fee remittance for “certain” F, J, and M nonimmigrants when all potential scenarios for fee remittance in these categories are in fact addressed. DHS amends the regulatory text at 8 CFR 103.7(b)(1)(ii)(H) to delete the word “certain.” Sixth, the NPRM's proposed regulatory text at 8 CFR 214.13(a)(2) inadvertently provided that the fee for certain J-1 status applicants is $210. The correct amount, as referenced elsewhere both in the regulatory text proposed in the NPRM and in its preamble, is $220. DHS amends the regulatory text at 8 CFR 214.13(a)(2) to correct this error. The revised regulatory text of this fee level does not change the intent of the proposed rule. Last, the authority sections for the text of the CFR are amended to include additional references to relevant statutory authorities. Specifically, DHS is adding citations to 8 U.S.C. 1356 and 8 U.SC. 1372, which also serve as sources of authority relevant to 8 CFR parts 103 and 214. V. Public Comments on the Proposed Rule DHS provided a 60-day comment period for this rulemaking following publication of the NPRM. The comment period concluded on September 17, 2018. DHS received approximately 300 comments. DHS has carefully reviewed all comments received during the comment period and summarizes and responds to all significant comments received in the following sections of this final rule preamble, with some additional responses to small entities-related comments in the Final Regulatory Flexibility Analysis section below. 10 This final rule does not make any substantive revisions to the proposed rule based on the comments received. 10 Overall, the final rule does not address comments seeking changes in statutes, regulations, policy or processes unrelated to or not addressed by the proposed rule. It also does not respond to requests for changes in procedures of other DHS components or other agencies, or the resolution of any other issues not within the scope of the rulemaking. A. General Comments DHS received comments from a broad spectrum of individuals and organizations, including representatives of schools and universities, advocacy organizations, public policy groups and other interested persons. Most commenters expressed general opposition to the fee increases; others expressed concerns related to specific fees. While most commenters opined the proposed fees were generally too high, many also expressed their understanding of the necessity of some fee increases. Some comments favored increasing fees, acknowledging the need to account for the costs of current SEVP services and planned enhancements without financially impacting the U.S. taxpayer. A few commenters expressed their appreciation for the fees having remained the same since 2008. Additionally, one commenter opined that the increase in fees may decrease the likelihood of visa overstays by curtailing visa applications. Another commenter expressed appreciation for the U.S. government policy related to assessing fees for the cost of government programs and opined that all costs associated with nonimmigrant students' presence in the United States should be paid by students rather than by U.S. taxpayers. Some commenters supported the fee increases but stated that the proposed fees were too low and that DHS should consider raising the fees further. Some commenters suggested alternative methods to reduce costs and inefficiencies. DHS also received some comments on subjects that are not directly related to the proposed fee amounts and are outside the scope of the NPRM. For example, some commenters suggested that DHS should allocate funds from other areas of the department to address SEVP funding deficits rather than raise the fees. 11 11 In addition to noting that it would be outside the scope of this rulemaking to artificially reduce the fee amounts in the hopes of receiving another lawful source of funding, DHS notes that such an approach would be irresponsible. As explained earlier in this preamble, by statute, SEVP is completely funded by the fees it collects. Congress specifically authorized SEVP to recover the full cost of agency operations, and has not indicated an intention to increase DHS appropriations to fund costs that SEVP could have recouped through fees. DHS cannot place SEVP operations at risk in the hopes of securing additional funding. Overall, comments submitted to the docket for this rulemaking were dominated by concerns about the potential impact the increased Form I-901 fee would have on nonimmigrant student enrollments and concerns about the potential impact of the new recertification fee on a school's ability to continue being certified by SEVP. Commenters, particularly those representing institutions with few nonimmigrant students, specifically stated that the new recertification fee is excessive and would adversely affect their ability to remain an SEVP-certified school. Finally, several commenters observed that the fee changes will send a signal to nonimmigrant students that the United States intends to restrict access to its educational opportunities. In response to these comments, SEVP notes that it supports international education. Nonimmigrant students typically have positive experiences while in the United States, and the goodwill engendered by all that the United States has to offer encourages mutually beneficial international relations. SEVP, by ensuring that individuals admitted to the United States as F, J, and M nonimmigrants are bona fide students and exchange visitors, reduces fraud, abuse, and potential terrorist threats, contributing to a safe environment for students and exchange visitors when they attend programs in the United States. In order for SEVP to continue to facilitate the benefits of U.S. educational and exchange experiences to F, J, and M nonimmigrants, SEVP must maintain its current systems and operational staff and make refinements now possible through progressive adaptions, both of which require appropriate funding. B. Comments on Timing of Fee Increase Several commenters expressed their understanding of the necessity to increase the fees; however, they suggested that instead of a one-time increase, a more consumer-friendly approach would be to raise fees incrementally over time to allow schools and students more time to budget and plan for the increase. DHS recognizes that the fees impose a burden on prospective students and schools. However, in order to ensure that fee levels are sufficient to recover the full cost of activities of the program immediately upon the effective date of the final rule, DHS calculations indicate that the fee amounts must remain, at a minimum, as proposed. If DHS does not adjust the current fees to recover the costs of processing the enrollment of F and M students, certification and recertification of schools, processing relating to J exchange visitors, appeals, and site visits, it will be forced to make reductions in oversight, security, and service as compared to current projections. Additional factors as to why DHS cannot implement such a tiered payment system at this time include the additional administrative burden and development costs such an incremental payment system would place on the program as well as time delays in development. C. Comments on Enhancements 1. SEVIS Modernization One commenter observed that since the NPRM was published, DHS has already implemented the SEVIS Student Portal, which the NPRM described as a part of the SEVIS modernization for which it required additional funding. In addition, a university expressed dissatisfaction with the current portal functionality and requested specific technical improvements. DHS acknowledges that the initial phase of the SEVIS Student Portal has now been launched. However, DHS clarifies that the proposed funding is intended to allow DHS to improve the portal and to expand the use of the portal to areas other than those currently online. DHS plans on building on the successes of and lessons learned from the initial Student Portal launch phase. Such expansion requires the additional revenue enabled by the fee increase. One commenter also questioned the need for a DSO background check that is connected to SEVIS modernization and opined that such checks are duplicative as human resources offices in educational institutions already conduct their own background checks. DHS supports any school's initiative to conduct employee background checks when those employees will be accessing SEVIS but disagrees that the current DSO verification is a duplication of those efforts. FISMA, the Federal Information Security Management Act of 2002, as amended, requires that SEVP protect government information by applying appropriate suitability checks to non-government users. See generally, e.g., 44 U.S.C. 3554(a). These checks are potentially substantively different than, and not replaceable by, those background checks used by private entities. 2. Increased SEVP Adjudication Personnel Many commenters opined that current recertification processing times are too lengthy and observed that while the NPRM indicated that hiring additional SEVP adjudication personnel was a partial reason for the fee increases, there was no description of the impact such hiring would have on reducing adjudication times. Several SEVP-certified schools expressed support for the fee increase specifically on the condition that adjudications would become more expedited after new adjudicators were hired. Other comments noted that the quality and efficiency of SEVP adjudications needed to be assessed and asked that funds be directed to improve and expedite the adjudication process. As an alternative to increasing the number of adjudication personnel, an organizational commenter, supported by other commenters, opined that “SEVP has opted to fully adjudicate nearly every change to Form I-17” and questioned whether all such adjudications are necessary. The commenter further noted that by doing so, SEVP has created unnecessary work that has created a work backlog and delays. SEVP agrees that its policy is to adjudicate most changes to the fields contained within the Form I-17. However, the lack of sound alternative methods to mitigate risks has necessitated such adjudications. SEVP notes that it continuously investigates and assesses opportunities for more streamlined, risk-based methods available, including opportunities that may arise due to new ways of analyzing school and student data. For purposes of this rulemaking, however, the underlying fee review, as described in the NPRM preamble, uses historical staffing and workload information for current SEVP functions and planned future initiatives to establish future revenue needs. SEVP lacks a methodology to reliably estimate downward adjustments in revenue needs based on workload adjustments that have yet to be made. To the extent that ICE makes such adjustments in the future, any efficiencies would be reflected in a subsequent fee rulemaking. This change will allow SEVP to fund additional personnel needed to improve case processing, reduce backlogs, and move toward more expedited processing times. That being said, superseding priorities may arise, which could not have been known at the time fee cycle calculations were made, that may impact SEVP's ability to meet petitioner expectations at all times. It is possible that at times, SEVP will need to shift adjudicator workloads and priorities away from recertification to address emergent issues, which may impact case processing efficiency and backlogs. D. Comments on Specific Fees 1. Fee for F, M and J Nonimmigrants Almost all of the submitted comments voiced concern that the increase in the Form I-901 fee would adversely affect U.S. competitiveness in the international market for nonimmigrant student enrollment and exchange visitor participation. Some cited decreasing nonimmigrant student enrollments in the United States and corresponding increasing enrollments in other English-speaking countries, notably in Canada and Australia. Many commenters emphasized the importance of nonimmigrant student enrollment and exchange visitor participation to U.S. productivity and innovation and specifically identified the negative impact the decrease in enrollment would have on school programs, the U.S. economy and local jobs. While DHS acknowledges the potential for increased fees to theoretically lead to decreased enrollment and subsequent negative effects on the U.S. economy, these commenters provided no supporting facts or data to demonstrate that such broad effects are a likely outcome of this particular fee increase. Therefore, DHS determines that such concerns do not outweigh the Department's need to increase the Form I-901 fee. Some commenters suggested that SEVP could decrease the burden on students by having the student fee increase gradually over a longer period of time, amortized annually based on the length of the student program, to minimize the potential impact on student enrollment. One commenter criticized the decision to use the Form I-901 fee to effectively reallocate some of the costs of services for which SEVP has assessed a fee, such as recertification. The commenter stated that the cost reallocation undermined the consistency of the ABC approach, and that as a result of the cost reallocation, students would bear the burden of costs that are more fairly attributed to educational institutions. As noted above, SEVP appreciates the importance of nonimmigrant student and exchange visitor enrollment to the U.S. culture and economy and is firmly committed to lawful admission of nonimmigrants for this purpose. SEVP also observes that while many of the comments provided historical data to show a recent decrease in nonimmigrant student enrollment, they neither cited nor provided a published study or other credible data supporting the suggestion that an increase in government fees charged to nonimmigrant students of the scale proposed in the NPRM would adversely affect their decision to choose the United States for academic or vocational study, or exchange visits. SEVP, likewise, has been unable to locate such a study. DHS thus has no objective basis for concluding that nonimmigrant students significantly base their decisions for attending educational institutions in the United States on government fees which, generally, are a small portion of the overall costs of attending these programs. For instance, the increased Form I-901 fee represents approximately one percent of the average cost of yearly expenses for students in a four-year program. 12 DHS believes that amortizing these costs over the course of a student's stay in the United States would be administratively cumbersome and inappropriate, given the need to fund SEVP operations. For example, because many of the operational costs of nonimmigrant student enrollment associated with establishing an F or M student record in SEVIS occur prior to or at the beginning of the program of study (such as maintaining the SEVIS database and educating DSOs), amortization would result in ICE incurring costs years before it recovers such costs through fees. 12 See National Center for Education Statistics, Fast Facts: Tuition costs of colleges and universities, https://nces.ed.gov/fastfacts/display.asp?id=76 (last visited Oct. 26, 2018) (showing the 2015-16 average total tuition, fees, room and board rates charged for full-time undergraduate students in degree-granting institutions). In addition, there are a variety of types of educational institutions in the United States, such as community colleges and focused vocational educational programs of study that are relatively unique in the world. These United States institutions offer fields of study; academic, social, and geographic environments; and support services that cannot be found anywhere else. Noted American research facilities provide opportunities for advanced research and collaboration among an increasingly international community of scholars. Given the many variables that go into a nonimmigrant student's decision to study abroad, and the lack of validated data on this issue, there is no reliable basis to conclude that U.S. government fees represent a significant factor in persuading a student or exchange visitor to attend a school in the United States, or not. SEVP, consequently, cannot conclude at this time that the increase in the Form I-901 fee as a result of this rule would be directly or even indirectly related to a decrease in U.S. competitiveness for foreign students and exchange visitors. Further, as discussed in the NPRM, after the fees were last increased in 2008 there was a brief decrease in the combined F, M, and J I-901 payments. However, the I-901 payment rate quickly recovered and ultimately reached record levels while the fees remained at the increased levels. See 83 FR 33762, 33775. Accordingly, an increase in fees does not necessarily precipitate a drop in enrollment. DHS acknowledges, however, that its analysis of the dropoff and subsequent increase in participants may not capture some applicants who forewent participation in SEVP due to the increased cost of application. With respect to the comment about the use of cost reallocation, i.e., the use of Form I-901 fee revenues to subsidize program integrity measures (such as mandatory biennial reviews) that would otherwise be funded through other fees (such as fees paid by schools), DHS notes that the benefits of program integrity measures accrue to F and M students and J exchange visitors, not just to institutions. DHS accordingly believes it reasonable for each F, M, and J nonimmigrant to share the cost by paying a small fee for this benefit rather than requiring SEVP-certified or Department of State (DOS)-designated institutions to bear the entire cost themselves. DHS also believes that such sharing of the costs, by lowering the respective costs of certification or designation, may be a contributing factor to the diversification of the type of schools that have sought SEVP certification and/or DOS designation thus benefiting F, M, and J nonimmigrants with a greater choice of schools. In addition, as discussed above, 8 U.S.C. 1372 and 8 U.S.C. 1356(m) authorize a full range of SEVP activities and collection of fees related thereto, and not merely data collection. Also, inclusion of these costs is not inconsistent with the full cost concept as outlined in federal cost accounting guidance, generally applicable federal policy for user charges, and legal precedent. Finally, DHS notes that even if a rise in the cost to F and M nonimmigrant students and J nonimmigrant exchange visitors were to cause a reduction in the demand by foreign students or exchange visitors for U.S. educational or exchange opportunities, that result would not alter this rulemaking. DHS and DOS must recoup the costs of administering the programs that manage F, M, and J nonimmigrants. The program cannot operate at a projected deficit based on a desire to attract a greater number of foreign students. If the rise in the cost causes a substantial reduction in the demand by foreign students or exchange visitors for U.S. educational or exchange opportunities, the lower revenue may not sustain the programs that manage the F, M, and J nonimmigrants. As stated previously, SEVP reviews its associated fees that are deposited into the IEFA biennially and, if necessary, will propose adjustments to ensure recovery of costs necessary to meet national security, customer service, and adjudicative processing goals at that time. 2. Impacts on Specific Applicant Groups Several commenters voiced concern about the negative impact of the increased fee on all F, M, and J nonimmigrants, but particularly on students in short-term programs such as intensive English programs that are already reporting declines in enrollment. Several commenters expressed concern that specific groups of nonimmigrant students or specific programs could be disproportionately affected by the fee increases. For example, many commenters expressed concern that short-term programs of study, specifically English language training programs, would be negatively impacted by the increase in Form I-901 fees. These commenters noted that such programs are shorter than full degree programs and often cost less, making the fee increase relatively more burdensome than for students enrolled in multi-year programs of study. For instance, some of these commenters suggested that the fee should be proportionate to the type of program of study a student is engaged in. Some of these comments suggested that students in short-term programs should be charged a lower fee than students in multi-year degree programs. One commenter suggested that for such short-term programs, the Form I-901 fee could account for 25 to 30 percent of the cost of a short-term program and stated that such a high percentage would be cost-prohibitive to many students to enroll in such programs. However, the commenter did not provide a clear basis for that 25 to 30 percent estimate, propose a specific amount for a short-term program fee, or explain how DHS would distinguish between “short-term” students and longer-term students. Some commenters requested that DHS establish a lower or a graduated fee for the student, exchange visitor and school fees to minimize negative impact specifically of potential declining enrollments. DHS declines to establish a lower or graduated fee for specific subgroups of nonimmigrants, such as those who require shorter-term nonimmigrant status, for multiple reasons. First, SEVP has reviewed its program costs for processing students in short-term nonimmigrant status versus those in long-term nonimmigrant status and can find no convincing basis for charging a lower fee for students on short-term status. As discussed above and in the proposed rule, DHS must establish a fee schedule that allows for recovery of the full costs of current SEVP services and planned enhancements. The proposed fee schedule was based on a fee model that captured the full cost of operations for current activities and planned enhancements and apportioned that full cost to the appropriate program activities. The model assigned costs to the appropriate fee category based on the nature of the activity. The model does not contain separate activity types for students in short-term programs as compared to long-term programs. DHS nonetheless conducted a qualitative review of the activities and their associated costs, and found that students in short-term programs do not necessarily impose lower costs on SEVP than students in long term programs. For instance, as indicated in Table 7, significant portion of the costs assigned to the I-901 fee are for student and exchange visitor investigations and school and sponsor investigations. Such investigations are not significantly less likely for students in short-term programs, and in some cases, poor oversight of students by short-term program DSOs has resulted in a particular need for investigations of those students and programs. Similarly, SEVP system maintenance costs are not significantly lower for short-term students. 13 13 For instance, the creation of a SEVIS record, regardless of program affiliation or program length, has certain fixed costs shared by all nonimmigrant students. In addition, with respect to the increased fees on the schools themselves, SEVP notes that the costs of certification, recertification, maintaining SEVIS, and training DSOs do not necessarily vary based on program type. Second, DHS would incur additional administrative costs associated with separate processing of these fees, increasing the costs for all participants. Finally, as F-1 nonimmigrant students may easily transfer from one type of a program of study to another without paying another I-901 fee, charging a lower fee for certain types of programs creates an opportunity for abuse of the transfer function in order to avoid paying a full fee. Accordingly, DHS will charge a single set fee regardless of the student's anticipated program length or other considerations. 3. Continued Fee of $35 for Au Pairs, Camp Counselors and Summer Work Travel One commenter asked why the $35 fee for au pairs, camp counselors, and summer work/travel programs was not included in the funding increase and why such a fee could not be increased to subsidize F and M nonimmigrant student fee. For the J-visa for exchange visitors, Congress provided the Department of Homeland Security with the authority to set fees consistent with the Department's estimation of the cost per individual of providing services. In addition to that general authority, Congress also specifically indicated that the fee for au pairs, camp counselors, and participants in summer work travel programs should be $35. 8 U.S.C. 1372(e)(4)(A). Based on the clear Congressional intent that the fee for au pairs, camp counselors and summer work/travel programs remain set at $35, the Department has decided to keep the fee set at that level. 4. Recertification Fee Many commenters objected to the introduction of a recertification fee, stating that it will disproportionately burden smaller institutions, because those schools obtain less revenue from F and M nonimmigrant students. Some representatives of small institutions commented that the proposed recertification fee increase would likely be cost-prohibitive to them and they would likely not seek to renew their SEVP certification. Other commenters voiced concerns over the timing of the increase in the middle of an academic budget cycle. DHS declines to establish a lower fee for smaller institutions, because following a qualitative review of the fee model (which does not distinguish between institutions based on size), DHS could not identify a convincing basis for doing so. Many of the administrative costs associated with recertification are fundamentally similar regardless of school size or type. Universities, secondary schools, public or private schools, and F and M schools receive the same SEVP certification. The workload and cost of certification adjudications does not change for different types of schools. In addition, institutions with large nonimmigrant student populations typically require fewer resources in some respects, since they are more knowledgeable, have a stable professional pool of employees, and have better internal reporting systems to assist in their compliance efforts. By contrast, schools with smaller enrollments may require more frequent training of DSOs, or significant oversight if they are identified as higher risk. With respect to the timing of the proposed fee increase, DHS appreciates this concern, but notes that DHS announced the likely publication of the proposed rule well in advance of the current academic year. 14 In addition, although the fee schedule will occur in the middle of a budget cycle, not all schools will be impacted during the current budget cycle. 14 See, e.g., Spring 2018 Unified Agenda of Federal Regulatory and Deregulatory Actions, RIN 1653-AA74, available at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201804&RIN=1653-AA74 (last visited Jan. 7, 2019) (indicating likely publication of a proposed rule in September of 2018). Multiple commenters also opined that the interval of SEVP school recertification is too frequent at two years. One commenter suggested that the frequency of recertification should be decreased from two years to four or five years. DHS notes that EBSVERA, section 502, 8 U.S.C. 1762, and Homeland Security Presidential Directive-2 (HSPD-2) provided for DHS to periodically review all schools approved for attendance by F or M nonimmigrant students. Further, EBSVERA requires that DHS recertify all such schools within two years of enactment and conduct an additional recertification of these schools every two years thereafter. See 8 U.S.C. 1762(a). As the two-year recertification cycle is a statutory requirement, the frequency cannot be modified through rulemaking. Therefore, comments suggesting alternative recertification intervals are beyond the scope of this rulemaking. 5. Fee for Filing an Appeal or Motion A few individuals and organizations commented on SEVP charging a fee to submit an appeal or motion following a denial or withdrawal of a school petition, the majority voicing their opposition to charging such a fee. Some questioned the meaningfulness of the fee when it covers only a fraction of the actual appeal cost and encouraged DHS to explore ways to increase efficiencies to decrease the cost of appeals and motions. DHS recognizes the potentially adverse impact of a high appeal fee, and therefore reallocated some of the costs of handling appeals to other SEVP fees. DHS notes that it is exploring ways to increase efficiencies to reduce the cost of adjudications. At this time, however, DHS feels that the benefits of charging a fee to recover some portion of the costs of reviewing appeals and motions remain compelling. One commenter stated that the fee was excessive as the appeal process is the only recourse or way for the applicant to engage with adjudicators for discussion. DHS notes that this notice comes at a point in the overall process during which the applicant or petitioner has had significant opportunities for dialogue ( see, e.g., 8 CFR 214.4(b)(3) (referencing a school's right to request a telephonic interview after receiving a notice of intent to withdrawal SEVP certification)), and so concerns about the impact of the appeal fee amount for this reason are overstated. 6. Site Visit Fee Some commenters asked SEVP to reconsider charging a site visit fee when an SEVP-certified school adds a new physical location or a campus where it plans to enroll F and M students. In particular, an organizational commenter objected to DHS's statement in the proposed rule that under the 2008 Fee Rule, DHS must impose a site visit fee for each location listed on the initial SEVP certification, as well as each location added as part of an initial event, such as a SEVIS update requesting approval of a changed or new location or campus. See 83 FR at 33771. The commenter wrote that current regulations require site visits only in the context of initial school certification under 8 CFR 214.3(h)(1), and not in the context of recertification (8 CFR 214.3(h)(2)) and out-of-cycle reviews (8 CFR 214.3(h)(3)). According to the commenter, those provisions refer to “on-site reviews,” not to site visits. The commenter also suggested that the on-site review, when necessary, is a less costly endeavor than an initial school certification site visit and thus a school should not be charged for an on-site review but only for an initial site visit. As an initial matter, DHS disagrees with the commenter's assessment of the scope of the site visit fee under existing regulations. When DHS established the site visit fee, DHS made clear that for initial SEVP certification petitions, a petition fee ($1,700) is required for each institution and a site visit fee ($655) is required for each campus. DHS also made clear that SEVP-certified institutions seeking approval for change of location must pay a site visit fee, and that SEVP-certified institutions seeking approval for a new campus must pay a site visit fee. 73 FR 55683, 55695. These requirements are reflected in existing regulations, which provide as follows: • The site visit fee applies to each location required to be listed on the form, and is not limited to the initial certification context. 8 CFR 103.7(b)(1)(ii)(B). • As part of initial certification, SEVP will conduct a site visit for each petitioning school and its additional schools or campuses. 8 CFR 214.3(h)(1)(ii). As noted above, a fee is charged for each additional school or campus at the initial certification stage. • The Form I-17 must include “any physical location in which a nonimmigrant can attend classes through the school ( i.e., campus, extension campuses, satellite campuses, etc.).” 8 CFR 214.3(a)(1)). • Schools are subject to a continuing duty to update SEVIS school locations as changes arise, i.e., even after initial certification, within 21 days of a change to a range of information types on the Form I-17, including school location and campus location. See 8 CFR 214.3(g)(2), (h)(3). This makes amply clear that the intent of the 2008 Fee Rule was to apply the site visit fee whenever a school fulfills its duty to add a school or campus location in SEVIS. DHS reaffirms that interpretation in this final rule. The site visit fee applies at the initial certification stage, and when a certified school updates its Form I-17 in SEVIS to indicate, pursuant to 8 CFR 214.3(g)(2)(i) and (h)(3), that it is changing its physical location or adding a new physical location or campus. DHS emphasizes that the imposition of this fee is necessary to support the relevant operations. The revenue generated by the imposition of this fee assists in recovering the costs that DHS incurs for these site visits, which are necessary for program integrity purposes. Site visits are no less burdensome in the post-certification context, and warrant an equivalent fee, because SEVP must assess that the schools continue to possess the necessary facilities, personnel, and finances to conduct instruction regardless of the point in time at which the schools choose to use a location for the instruction of nonimmigrant students. VI. Statutory and Regulatory Requirements A. Executive Orders 12866, 13563, and 13771: Regulatory Review Executive Orders 12866 (“Regulatory Planning and Review”) and 13563 (“Improving Regulation and Regulatory Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules and promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”) directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.” The Office of Management and Budget has designated this rule a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by OMB. This final rule imposes transfer payments between the public and the government with no new cost burdens. Thus, this rule is not subject to the requirements of Executive Order 13771. No comments were received concerning the regulatory impact analysis contained in the proposed rule. With the exception of a minor technical amendment to Table 24, as described earlier in this preamble, there are no changes from the proposed to the final regulatory impact analysis. A final regulatory impact analysis follows. 1. Background and Purpose of the Rule SEVP is a fee-funded program within ICE that provides oversight of certified schools and nonimmigrant students in the F and M visa category. SEVP uses SEVIS to monitor and track certified schools and F and M nonimmigrant students. DOS also uses SEVIS in the management of the Exchange Visitor Program for nonimmigrant exchange visitors in the J visa category. SEVIS is a web-based system administered by SEVP that retains data on nonimmigrant students and exchange visitors in the country. SEVP uses SEVIS to ensure accurate reporting and recordkeeping by schools and exchange visitor programs. SEVP also uses SEVIS to identify enforcement actions for students and exchange visitors who are out of status. The purpose of this final rule is to generate the necessary revenue to recover the full cost of the FY 2019 and FY 2020 budgets. SEVP is authorized to recover the full cost of all resources and services provided. The costs of SEVP activities have increased, and the fees collected no longer cover the costs. The fee increase is needed to meet long-term cash flow needs and achieve solvency. SEVP projects an annual budget of $186.6 million in FY 2019 and $188.4 million in FY 2020. SEVP forecasts $121.6 million in revenue for FY 2019 and FY 2020 without a fee change. The implementation of this rule would provide SEVP with additional fee revenue of $75.2 million in FY 2019 and $73.5 million in FY 2020. If DHS does not adjust the current fees to recover the costs of processing the enrollment of F and M students, certification and recertification of schools, processing relating to J exchange visitors, appeals, and site visits, it will be forced to make reductions in oversight, security, and service as compared to current projections. To determine the full cost associated with SEVP and the management of SEVIS, SEVP used ABC methodology. ABC first identifies activities in an organization and then assigns the cost of each activity according to the resources they consume. SEVP identified the following as its primary activities: Collecting and retaining information on F, M, and J nonimmigrants; certifying schools; overseeing school compliance; recertifying schools; adjudicating appeals; investigating suspected violations of immigration law and other potential threats to national security by F, M, or J nonimmigrants; providing outreach and education to users; and performing regulatory and policy analysis. SEVP also recognizes management and overhead costs associated with the program. With this rule, SEVP will collect five fees paid by two source categories: Individuals will pay the Form I-901 fee, and institutions will pay the Form I-17 certification fee, Form I-17 recertification fee, the fee for a motion or appeal, and the site visit fee. By tracing expenditures of the activities previously listed to the various fee categories, SEVP forecasted fee payments to determine the appropriate fee amount for each fee type in this rule. Table 20 presents an accounting statement summarizing the annualized transfer amounts and qualitative benefits of the final rule. With this rule, schools will pay a higher fee for initial SEVP certification and will incur a fee for recertification, a site visit when adding a new physical location or campus, and the filing of a motion or appeal. In addition, F and M nonimmigrant students and J nonimmigrant exchange visitors will pay higher fees. BILLING CODE 9111-28-P ER23MY19.026 2. Impacts of Regulatory Change This rule amends the current fee levels for the individual student and exchange visitor application fee (Form I-901 fee) and school certification petition for initial certification. It maintains the current fee for site visits and makes clear that SEVP will impose it for any change of location or additional physical location or campus reported as an update by a certified school. It also institutes a fee for school recertification petitions and the filing of appeals and motions by schools. The amended fee structure reflects existing and projected operating costs, program requirements, and planned program improvements. The current Form I-901 fee levels are based on a fee analysis performed when SEVP last increased the fees in 2008. See 73 FR 55683. Those cost calculations were established on the basis of projected workload. Since 2008, SEVP's program mission tasks have expanded significantly. The expansions of certification, recertification, and appeals costs and the subsidization of excess costs not recovered by fees have led to the need for the fee increase. Additionally, SEVP now provides investigative analysis to support enforcement operations, has increased numbers of adjudication personnel, and is undergoing SEVIS Modernization. Concurrently, costs associated with these program tasks have been affected by increased costs due to inflation. This rule's fees will result in recovery of the full cost of SEVP analysis and support operations with fee-generated revenue; alignment of the fees with current and projected costs and processes that have been adjusted as the program has gained experience and sophistication; and the agency's adoption of more detailed and accurate data sources and improved management tools to align resources and workload. a. Form I-901 F and M Fee F nonimmigrants, as defined in INA section 101(a)(15)(F), 8 U.S.C. 1101(a)(15)(F), are foreign students who come to the United States to pursue a full course of academic study in SEVP-approved schools and their dependents. M nonimmigrants, as defined in INA section 101(a)(15)(M), 8 U.S.C.1101(a)(15)(M), are foreign nationals pursuing a full course of study at an SEVP-certified vocational or other recognized nonacademic program (other than language training programs) in the United States and their dependents. International F and M nonimmigrant students seeking temporary admission into the United States to attend a U.S. educational institution must pay the Form I-901 F and M fee. In this final rule, SEVP increases the Form I-901 F and M fee from $200 to $350. From 2007 through 2017, SEVP received an average of 450,581 FormI-901 F and M fee payments per year. Table 21 shows the volume of FormI-901 F and M fee payments received and the annual average number of fee payments from 2007 to 2017. As previously discussed, SEVP has forecasted 418,393 Form I-901 F and M fee payments in FY 2019 and 407,933 FY 2020, respectively. ER23MY19.027 Table 22 illustrates the incremental increase DHS is finalizing with this rule for the Form I-901 F and M fee. Individuals who submit a Form I-901 will pay an additional $150 under this final rule, which is a 75 percent increase. ER23MY19.028 SEVP estimates that the fee increase will result in an annual increase of transfer payment from students who submit a Form I-901 to the government of approximately $62 million per year ($150 increase × 418,393 FY 2019 number of applicants = $62,758,950; $150 increase × 407,933 FY 2020 number of applicants = $61,189,950). b. Form I-901 J—Full Fee DOS generally oversees the exchange visitor program, which includes nonimmigrants who are charged the full Form I-901 J fee. J exchange visitors are nonimmigrant individuals approved to participate in an exchange visitor program in the United States and the spouse and dependents of the exchange visitors. This fee is associated with J-1 nonimmigrants participating in a designated exchange visitor program. Certain other J-1 categories are subject to a reduced fee or are exempt from a fee in accordance with 8 U.S.C. 1372(e). SEVP and DOS have a memorandum of reimbursable agreement. DOS sends SEVP its actual expenditures, and SEVP reimburses them quarterly. Each year, SEVP and DOS review and update the memorandum. Table 23 displays the affected Exchange Visitor Program categories subject to the full Form I-901 J fee and the purpose of the visit. 15 15 See Department of State, Exchange Visitor Program Category Requirements (June 2016), https://j1visa.state.gov/wp-content/uploads/2017/06/Exchange-Visitor-Program-Category-Requirements.pdf (last visited Feb. 26, 2018). ER23MY19.029 SEVP receives an average of 151,958 Form I-901 Full J payments per year (FYs 2007-2017). Table 24 displays the volume of Form I-901 Full J fee payments received and the annual average number of fee payments. SEVP has forecasted 157,550 Form I-901 Full J payments in FY 2019 and 153,612 in FY 2020. ER23MY19.030 The difference between the final and current fees for the Form I-901 Full J applicants is $40, an increase of approximately 22 percent, as shown in Table 25. ER23MY19.031 The annual increase in transfer payments from Form I-901 Full J applicants to the government is expected to be $6,302,000 in FY 2019 and $6,144,480 in FY 2020 ($40 increase in fee × 157,550 FY 2019 and 153,612 FY 2020 forecasted number of applicants). The increase in J fees is meant to recover the full cost of J program operations for SEVP, which includes the reimbursement to DOS, SEVIS costs, and other adjudication services for J exchange visitors. For the purposes of calculating fees, SEVP isolates the costs specifically incurred by operating the J visa program. As it stands, the J visa program operates at a greater cost than the revenue that Form I-901 J fees bring to the program; therefore, SEVP increases the Form I-901 Full J fee to cover the $39.4 million full cost of operating the J visa program on an annual basis. c. Form I-17 School Certification and Recertification Fee For a U.S. school to enroll F and M nonimmigrant students, it is required to be certified by SEVP. A school petitions for SEVP certification to enroll these students by completing and submitting Form I-17, “Petition for Approval of School for Attendance by Nonimmigrant Student,” online through SEVIS. All SEVP-certified schools are required to go through the recertification process every two years to ensure they remain qualified for certification and adhere to all requirements according to the regulations. From FY 2012 to 2016, there has been an annual average of 423 schools applying for SEVP certification. As previously discussed, DHS calculated the three year moving average to minimize the variation in forecasting the population data. The Form I-17 initial certifications from FYs 2012 through 2016 are shown in Table 26. ER23MY19.032 SEVP uses the three year moving average to predict that there will be 426 initial certifications in both FY 2019 and FY 2020, respectively. As of May 2017, there were 8,746 SEVP-certified schools. DHS assumes that approximately half, or approximately 4,373 schools, will recertify each year, including the 1,728 schools with no active F or M nonimmigrant students. DHS assumes that a school would prefer to recertify for a $1,250 fee instead of allowing certification to lapse and thereafter having to again pay the initial certification fee of $3,000. The initial certification fee is a 76 percent increase from the current fee. The current fee to apply for initial certification is $1,700, which has not changed since 2008. SEVP does not currently charge a recertification fee; the new fee amount is $1,250. The Form I-17 initial certification and Form I-17 recertification incremental fees are shown in Table 27. ER23MY19.033 The annual increase in transfer payments from schools to the government from Form I-17 initial certifications is expected to be $553,800 ($1,300 increase in fee × 426 (FY 19 and FY 20 forecasted number of Form I-17 initial certifications)). The annual increase in transfer payments from schools to the government for Form I-17 recertification is expected to be $5,466,250 ($1,250 increase in fee × 4,373 (FY 2019 and FY 2020 forecasted number of recertifications)). d. Fee for Motion or Appeal When a school is denied certification or recertification, the school receives a denial letter through certified mail. The denial letter explains the reason for the denial and the steps to appeal. The school can appeal by filing the Form I-290B. This rule finalizes that SEVP impose a filing fee of $675, which is also the fee currently charged by USCIS upon submission of the Form I-290B. 16 SEVP does not currently collect a fee from a school that files a motion or appeal. DHS finalizes its regulations to institute this fee for a school filing an appeal or motion in order to establish a more equitable distribution of costs, improve services by decreasing an appeals or motions throughput time and a more sustainable level of cost recovery relative to the services provided. 16 USCIS Form I-290B, Notice of Appeal or Motion, Filing Fee of $675, https://www.uscis.gov/i-290b. SEVP processed an average of 54 motions and appeals from schools annually from 2013 to 2016. DHS assumes that there will be the same number of appeals or motions filed in FY 2019 and FY 2020. The total annual increase in transfer payments from schools to the government for filing an appeal or motion is expected to be $36,450 ($675 fee × 54 (FY 2019 and FY 2020 forecasted number of fee payments)). e. Site Visit Fee As noted above, current regulations provide authority for SEVP to charge a site visit fee to schools that apply for initial certification or report a change of physical location, or addition of a physical location or campus. The site visit allows SEVP an opportunity to gather evidence on the school's eligibility, review school facilities, and interview personnel listed on the Form I-17 as a PDSO or DSO. SEVP currently collects the $655 fee when a school files a petition for certification to issue Forms I-20 or by a certified school when it physically moves to a new location. This final rule notifies the public that following completion of this rulemaking, SEVP plans to also collect the fee from any certified school that adds a physical location or campus, by updating its Form I-17 in SEVIS, consistent with the above authorities and the agency's longstanding interpretation. SEVP performs 600 site visits annually. Of these 600 visits, 426 will be at schools that apply for initial certification and currently pay the $655 site visit fee. The remaining 174 site visits may include visits when a school adds a new physical location or campus. The site visit fee amount, $655, remains the same. The annual increase in transfer payments from schools to the government due to site visits is expected to be $113,970 ($655 fee × 174 (FY 2019 and FY 2020 forecasted number of site visits)). f. Conclusion SEVP expects to have a total increase in fees of $68.7 million per year, discounted at seven percent, transferred from individuals and entities for the services they receive, to the government. Table 28 shows the summary of the total annual number of payments, incremental fee amounts, and total fees transferred. ER23MY19.034 3. Alternatives to Regulatory Change SEVP examined several alternatives to the final fee structure, including no increase to any fee, only increasing the Form I-901 fee and Form I-17 SEVP school certification fee, and the unsubsidized results of the ABC model. Without an increase in fees, SEVP will be unable to maintain the level of service for students and schools that it currently provides as well as the compliance and national security activities discussed above. SEVP considered the alternative of maintaining fees at the current level but with reduced services and increased processing times, but has decided that this would not be in the best interest of applicants and schools. SEVP seeks to minimize the impact on all parties, but in particular small entities. If SEVP followed this alternative scenario, there would be a shortfall of revenue of over $65.4 million in FY 2019 to cover expenses. SEVP rejected this alternative. SEVP must pay for the expenses of maintaining and improving SEVIS and adjudicating schools applying to be certified by SEVP in a timely manner. SEVP also considered raising only the Form I-901 and Form I-17 certification fees instead of including a new fee for recertification and for filing an appeal or motion. If SEVP followed this scenario, the Form I-901 F and M fee would have increased to $350 to cover the shortfall in revenue, but the Form I-17 initial certification fee would have also increased to $4,200. This would have tripled the existing certification fee while allowing schools with zero foreign students to remain active SEVP schools that require SEVP effort for recertification. SEVP rejected this fee structure as it would have continued to add workload to SEVP's recertification branch. Without any disincentive to recertify, the list of schools recertifying would likely continue to grow. The new fees, however, establish a more equitable distribution of costs and a more sustainable level of cost recovery relative to the services provided. SEVP also considered the unsubsidized results of the ABC model as an alternative, which allocated the Form I-901 F and M fee, school certification fees, and the fee to file an appeal or motion as shown in Table 29. ER23MY19.035 BILLING CODE 9111-28-P SEVP rejected this alternative for several reasons. As a starting point, the current fee to file Form I-290B with USCIS is $675. The same form is required to file an appeal or motion with SEVP and using the existing USCIS fee is a consistent and reasonable means of implementing this new fee without discouraging schools from seeking an appeal. Setting the appeal fee at the amount that SEVP's standard methodology would dictate ($38,475) would result in a fee that is prohibitively expensive for many SEVP-certified schools, a significant portion of which have fewer than ten nonimmigrant students. Similarly, SEVP rejected the alternative to set the recertification fee at the ABC model output amount of $6,000. A recertification fee higher than the initial certification fee would also discourage schools from seeking recertification. SEVP instead sets the recertification fee at a level that is less than the initial certification fee. When schools can maintain their certification, F and M nonimmigrant students enrolled in the withdrawn school avoid complications such as being forced to transfer schools, leave the United States, or risk facing immigration law penalties for violating the terms of their nonimmigrant status. SEVP also rejected the initial certification fee of $4,600, an increase of almost three times the current fee of $1,700. In the fee development, DHS balanced the challenge of minimizing the costs to schools and students while recovering funding to support SEVP services. The population of Form I-901 F and M nonimmigrant students relative to the population of Form I-17 schools allows for a minimal fee adjustment to be spread over the student population to reduce the cost burden on individual institutions seeking recertification. B. Regulatory Flexibility Act 1. Final Regulatory Flexibility Analysis The Regulatory Flexibility Act (RFA) at 5 U.S.C. 604 generally requires Federal agencies to consider the economic impact of their rules on small entities. In accordance with the RFA, DHS has prepared a Final Regulatory Flexibility Analysis (FRFA) that examines the impacts of the rule on small entities. The term “small entities” encompasses small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of fewer than 50,000. 2. A Statement of the Need for, and Objective of, the Rule This rule will adjust current fees and collect new fees to ensure that SEVP is able to recover the costs of the management and support of its program activities. DHS's objectives and legal authority for this final rule are further discussed throughout this final rule preamble. The objective of the final rule is to prevent an anticipated funding deficit in operating the SEVP. More specifically, this rule increases the SEVP funding stream by adjusting the Form I-901 F and M fee, Form I-901 J-Full fee, and Form I-17 certification fee, and by instituting the Form I-17 recertification fee and a fee for filing an appeal or motion. This final rule also announces the collection of a site visit fee when an SEVP-certified school adds a new physical location or campus at which it provides educational services to nonimmigrant students. The funding supports existing SEVP activities and planned enhancements critical to current SEVP oversight of schools and the monitoring of nonimmigrant students in the F, M, and J visa classifications for national security purposes. ICE continues to examine programmatic goals, which may include enforcement costs generated by SEVP information or compliance investigations. As such projections have not yet been completed, any related costs are beyond the scope of this rulemaking effort. The legal basis for this final rule increasing the SEVP funding stream is grounded in the Homeland Securi [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2019-10884. Public record. Not legal advice.