This year’s college graduates in the United States are entering one of the toughest job markets in recent times. According to the Federal Reserve Bank of New York, the unemployment rate for recent grads rose to 5.8% in March 2025, up from 4.6% a year earlier. Underemployment—graduates working in jobs that don’t require a college degree—also ticked up to 41.2%.
For Indian students, who make up a large group of international students in the US, the picture is even more complicated. Legal uncertainties, visa crackdowns, and political scrutiny are adding to their woes in a cooling economy.
SEVIS records and visa woes
The US currently hosts over 300,000 Indian students. Nearly 100,000 work through the Optional Practical Training (OPT) program, which allows international graduates—especially those in STEM—to gain work experience for up to three years.
However, Trump-era immigration overhauls have triggered significant disruptions. The American Immigration Lawyers Association found that half of the 327 recent student visa revocation cases involved Indian nationals. The Trump administration had moved to terminate thousands of SEVIS records (Student and Exchange Visitor Information System) citing various reasons, including minor infractions like parking tickets—and sometimes, no reason at all. Although the Department of Homeland Security has since reversed its stance and announced it would reinstate those records, the damage in the form of anxiety and lost opportunities remains. Adding to the uncertainty is a proposed bill in the US Congress that could dismantle the OPT program. The legislation has sent shockwaves through the Indian student community, many of whom rely on OPT as a bridge to H-1B visas or permanent residency.
Policing of student voices
Indian students are also feeling the heat over their political expression. At least a dozen international students have reportedly been detained by US Immigration and Customs Enforcement for protesting Israel’s war in Gaza—protests the Trump administration has equated with supporting terrorism.
The arrest of Badar Khan Suri, a postdoctoral fellow at Georgetown University accused of promoting “Hamas propaganda,” and the visa cancellation of Columbia University student Ranjani Srinivasan after her pro-Palestinian social media posts, have sent chills through Indian student circles. Suri, an Indian national, has been deemed “deportable” under a rarely used immigration law, with US officials citing alleged ties to Hamas.
AI and the shrinking job market
Beyond immigration and politics, Indian graduates in the US face another formidable challenge: artificial intelligence. AI tools are increasingly taking over entry-level responsibilities—research, presentations, reporting—that once provided a foothold for fresh graduates. This digital disruption is shifting the job market landscape in several ways:
- Fewer entry-level positions
- Lower return on investment from college degrees
- Increased financial strain from student loans
Debt and default
The Trump administration has reinstated “involuntary” debt collections for federal student loans. This allows the government to garnish wages, tax refunds, and even Social Security benefits from borrowers in default. These forced collections had been paused during the COVID-19 pandemic.
According to a new TransUnion report, 20.5% of federal student loan borrowers are now over 90 days delinquent—double the rate from five years ago. While job numbers showed a surprising 177,000 new hires in April, wage growth remains stagnant and competition fierce. Experts warn that trade policies and political instability could further dampen the outlook.