On July 23, 2004 the Department of Homeland Security published a notice in the Federal Register relating to F-1 student and J-1 student exchange visitor nonimmigrants filing for H-1B specialty worker nonimmigrant status.

The notice represents long-anticipated guidance regarding the H-1B "Cap Gap." The Cap Gap is a byproduct of the fact that the quota of 65,000 for new H-1B visas has already been reached for the current fiscal year and nonimmigrants seeking to change status from F/J status to H-1B cannot request an H-1B status effective date prior to the start of the new fiscal year on October 1, 2004.  However, some F/J student nonimmigrants' status will expire  prior to October 1, 2004. Before publication of this notice, such F/J nonimmigrants were ineligible to apply for a change of status and were required to leave the United States before their status and grace periods expired to ensure maintenance of lawful nonimmigrant status.

A legacy Immigration and Naturalization Service (INS) regulation permits DHS to extend the duration of status of certain F-1 and J-1 nonimmigrants and their dependents who are affected by the unavailability of H-1B visas until the start of the new fiscal year.  The legacy INS had exercised this authority in the past when the cap was last reached in 1999.  However, after the division of legacy INS into two separate bureaus last year, the DHS was apparently reluctant to exercise this authority without a consensus on the issue from both subordinate bureaus responsible for student and exchange visitor issues: the United States Citizenship and Immigration Services (USCIS), and Immigration and Customs Enforcement (ICE), which oversees the Student and Exchange Visitor Information System (SEVIS).

Following termination of an F-1 course of study or an optional practical training period, an F-1 student usually has a grace period of 60 days during which he or she may lawfully remain in the United States.  This grace period is only 30 days for individuals in J-1 exchange visitor or trainee status. The notice effectively extends this grace period until October 1, 2004; this extension of duration of status would also be reflected in the SEVIS system. The notice applies only to students in F of J status, and does not extend to other J-1 exchange visitor categories. Also, the benefit of the notice applies only to H-1B petitions filed and receipted by CIS by July 30, 2004, requesting a start date of no later than October 1, 2004.

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