The U.S. backed down from a high-profile confrontation with two elite universities over visas for foreign students who take online-only classes, ending a tense standoff that could have sent thousands of students back to their home countries and left colleges scrambling to plan for the fall.

U.S. District Judge Allison Burroughs on Tuesday announced that the U.S. had agreed to rescind a new policy requiring the students to take at least one in-person class, even amid the pandemic.

The hearing followed a separate lawsuit by 17 states and a dozen "friend of the court" briefs filed in support of the Harvard suit from hundreds of universities and some of the country's largest tech companies.

Harvard is conducting almost all its classes online in the fall semester, while the Massachusetts Institute of Technology has a hybrid model. The two said in a lawsuit they filed last week that the government had failed to consider the harm to students from the new directive. They also noted the impact on businesses, pointing to the role foreign students play in American innovation, and on the U.S. gross domestic product, citing "the loss of the tens of billions of dollars that international students contribute to U.S. GDP each year."

They acknowledged that some students could, in theory, take part in online classes from their home countries, but not without serious disruption. They cited time zone differences, unreliable or state-managed Internet and armed conflict in some of the students' homelands.

The new policy has also stirred widespread concern at colleges that reap billions of dollars in revenue from international students each year at a time when some schools are issuing refunds over closures amid the pandemic and as public university systems see decreased state funding.

U.S. Immigration and Customs Enforcement says it weighed the impact on students in revising its policy, choosing not to simply go back to its earlier strictures, for example.

Before the pandemic, international students on F-1 visas were required to take most of their classes in person, allowed only a single online course per semester. After the virus appeared and some universities stopped offering in-person classes, Immigration and Customs Enforcement adjusted its rules "for the remainder of the emergency," allowing fully online coursework.

Last week's new order ratcheted that back, requiring students at colleges that have announced online models, including Harvard and the California State University system, to transfer or go back to their home countries.

ICE also contends that a full slate of virtual coursework compromises national security by giving foreign students free rein within the U.S., and says a freeze would undermine "the deference afforded administrative agencies in complex and interrelated fields like immigration enforcement."

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