The Violation or Drop Out of School for Foreign Students in F-1, and Some Possible Consequences

The current economic recession not only produces high unemployment, but also violation or drop out of school for some foreign students in F-1, including those students in Optional Practical Training after finishing school. 

Some of these OPT F-1 professional may apply for FY 2010 H-1B cap beginning from April 1, 2009. When a nonimmigrant violates the immigration law including unauthorized employment and out of status, they face two adverse consequences. One consequence is that they cannot extend or change of the nonimmigrant status within the United States. However, this consequence does not deprive such nonimmigrants of an opportunity to apply for the extension or change of their nonimmigrant visas through the American Consulate in their home countries, if they have not overstayed in the U.S. longer than 180 days.

Accordingly, once they fall under the second category, they face additional consequences of not even being able to apply for a visa at the American Consulate outside of the U.S. and not being able to return to the U.S. for three or ten years. The first consequence is triggered by any violation of their nonimmigrant status. It is called out of status. Thus one can fall out of status even during the period of a valid I-94. The second consequence is called "unlawful presence or unauthorized presence beyond the permitted stay." 

It is thus not triggered even if there was a violation of "status" by unauthorized employment or falling unemployed etc. unless the permitted stay expires on their I-94. If they overstay six months or longer, and go to an American Consulate to apply for a visa, such application is denied on the ground that they are subject to the bar from returning to the U.S. for three years. 

If they overstayed for one year or longer, they are subject to a 10-year bar and cannot return to the U.S. and the American consulate is unable to issue a visa to them. There are relief of a waiver in a very limited situation, but generally, this is a situation which every nonimmigrant in the U.S. must face when they overstay beyond the expiration date of their I-94. 

http://www.greencardapply.com/news/news09/news09_0209.htm