USCIS’s New Adjustment of Status Memo: Discretion, “Administrative Grace,” and the Limits of Agency Power

By C. Matthew Schulz

USCIS has issued a new policy memorandum that affects one of the most important benefits in U.S. immigration law: adjustment of status, the process that allows eligible applicants already in the United States to become lawful permanent residents without leaving the country for immigrant visa processing at a U.S. consulate. The memo does not rewrite the statute or regulation, but it frames adjustment in a limiting way by emphasizing that adjustment is discretionary, “extraordinary,” and an act of “administrative grace.”

The USCIS memorandum is PM-602-0199, dated May 21, 2026, titled “Adjustment of Status is a Matter of Discretion and Administrative Grace, and an Extraordinary Relief that Permits Applicants to Dispense with the Ordinary Consular Visa Process.” and there is the agency's press release.

The New York Times, and The Times of India, quickly wrote about this policy change, and I said other major media are likely to discuss this important development soon.  

I was right. See The Wall Street Journal, Associated Press, NPR, Time, Cato Institute, and Washington Post.

Important Update

CBS New reported May 30, 2026:

But over the weekend, the Department of Homeland issued a statement that portrayed the green card guidance in far less sweeping ways, arguing the memo issued last week restated "longstanding law and policy." DHS said the "policy will not prevent any alien from obtaining a green card who legitimately and properly qualify." The department said the guidance "will result in some aliens who do not merit the discretionary benefit ultimately applying with the Department of State overseas rather than USCIS in the United States."  "This policy will have no noticeable impact on highly qualified applicants and skilled professionals who have followed the law," DHS said in its statement to CBS News on Saturday. "These aliens benefit the national interest and provide economic benefits to the United States and will continue to merit the favorable exercise of discretion."

See CBS News and MS Now for their coverage of this latest development.

Executive Summary

PM-602-0199 is best understood as a change in policy emphasis, not a change in U.S. immigration law. 

US law has long stated that adjustment of status under INA § 245(a), 8 U.S.C. § 1255(a), is discretionary. The regulations and USCIS Policy Manual also have long recognized that technical eligibility does not automatically require approval.

The emphasis on adjustment as an exercise of "grace" may increase the likelihood of discretionary denials in cases involving negative facts, such as overstays, unauthorized employment, inconsistent representations about temporary intent, fraud, false testimony, criminal history, or failure to comply with nonimmigrant status or parole conditions.

What is new is the tone and emphasis. 

USCIS now highlights older case language describing adjustment as “administrative grace” and “extraordinary relief” because it permits applicants to avoid the ordinary consular visa process. 

But discretion is not unlimited. 

USCIS may not deny adjustment through generalized assumptions, broad nationality-based concerns, or policy disagreement with Congress’s decision to create adjustment of status as a statutory benefit. A lawful discretionary denial must be individualized, reasoned, supported by the record, and based on the applicant’s specific positive and negative factors.

What the USCIS Memo Says

The memo states that adjustment of status under INA § 245 is discretionary and is not designed to replace ordinary immigrant visa processing through U.S. consulates abroad. It says USCIS is “reaffirming” a longstanding approach: a person may be statutorily eligible for adjustment but still must show that USCIS should exercise discretion favorably.

The memo relies heavily on Matter of Blas, 15 I&N Dec. 626 (BIA 1974; A.G. 1976), aff’d, 556 F.2d 586 (9th Cir. 1977), and related cases. 

The memo’s main themes are that: 

• adjustment is not an entitlement; 
• consular processing is the ordinary immigrant visa route; and 
• USCIS officers should consider whether the applicant’s conduct makes adjustment inappropriate. 

In particular, the memo points officers toward considering as adverse factors supporting a denial of discretionary adjust, such as immigration violations, false testimony, improper admission or parole, unauthorized employment, conduct inconsistent with the purpose of the applicant’s nonimmigrant status or parole, and conduct inconsistent with representations made to consular or DHS officers.

Adverse factors include immigration violations, false testimony, improper admission or parole, unauthorized employment, conduct inconsistent with the purpose of the applicant’s nonimmigrant status or parole, and conduct inconsistent with representations made to consular or DHS officers.

The memo also recognizes an important limitation: applying for adjustment is not inherently inconsistent with maintaining a dual-intent nonimmigrant status such as H-1B or L-1. That matters because the law has long treated H-1B and L-1 differently from many other temporary categories. See, for example, INA § 214(h), 8 U.S.C. § 1184(h).

The Statute, Regulation, and Policy Manual Already Recognized Discretion

INA § 245(a), 8 USC 1255(a) provides that the status of an eligible person “may be adjusted” by the Secretary of Homeland Security, “in his discretion,” if the applicant was inspected and admitted or paroled, applies for adjustment, is eligible to receive an immigrant visa and admissible, and has an immigrant visa immediately available. 

The regulation at 8 CFR Part 245 implements adjustment of status. It confirms the filing and adjudication framework and provides that applicants must be notified of the decision and reasons for denial. 

The USCIS Policy Manual already contained adjustment-specific discretion guidance before PM-602-0199. Volume 7, Part A, Chapter 10 is titled “Legal Analysis and Use of Discretion.” 

USCIS also has general discretion guidance in the USCIS Policy Manual, Volume 1, Part E, Chapter 8, titled “Discretionary Analysis.” That chapter states that discretionary analysis must be individualized and that negative factors must not be analyzed in a generalized way. 

The “Administrative Grace” Language Comes from Cases, Not the Statute

Congress wrote the statute with the words “in his discretion.” The statute does not say “administrative grace.” The regulation likewise does not use “grace” as the operative standard. That "administrative grace" phrase comes from older BIA decisions and later judicial decisions repeating that concept.

In Matter of Blas, the BIA quoted Matter of Ortiz-Prieto for the proposition that adjustment is “a matter of discretion and of administrative grace, not mere eligibility.” 

That language should be read carefully. It means that eligibility does not compel approval. 

Matter of Blas does not give USCIS officers free-floating authority to deny adjustment for any reason, for no reason, or based on generalized suspicion. Administrative discretion is still governed by statutes, regulations, constitutional constraints, agency policy, and basic administrative law principles.

The Supreme Court’s decision in Kucana v. Holder, 558 U.S. 233 (2010), is useful for this limiting principle. Kucana was not an adjustment merits case; it involved judicial review of motions to reopen. But the Court emphasized the presumption favoring judicial review of administrative action and declined to read the INA as allowing the Executive to insulate discretionary decisions from review unless Congress clearly did so. 

Discretion Has Legal Limits

A central problem with the phrase “administrative grace” is that it makes discretion sound unlimited. That is not U.S. law.

USCIS’s own Policy Manual, Volume 1, Part E, Chapter 8 requires individualized analysis. The general discretion chapter states that officers must evaluate the relevant facts and circumstances of the individual case. It also states that negative factors must not be analyzed in a generalized way and must be addressed on an individualized basis. 

That matters. 

For example, it would be an abuse of discretion for a USCIS adjudicator to deny adjustment to a citizen of a particular country simply because many nationals of that country have high overstay rates or a history of unauthorized employment. Those facts might justify careful review, targeted questioning, or a request for evidence in a particular case. But they cannot substitute for applicant-specific adverse facts. A discretionary denial must be grounded in the record of the person applying.

Matter of Blas itself contains a powerful cautionary note on this point. The dissent criticized reliance on broad assumptions about Filipino applicants and emphasized that cases should stand on their own facts. Although the dissent was not the holding, it highlights the very concern that remains important today: discretion cannot become group-based suspicion. 

How Case Law and the Policy Manual Describe the Factors to Be Considered

The most useful older framework comes from Matter of Arai, 13 I&N Dec. 494 (BIA 1970). In Arai, the BIA explained that adjustment problems must be resolved individually. Where adverse factors are present, an applicant may need to offset them with unusual or outstanding equities. Favorable factors may include family ties, hardship, length of residence, and similar equities. In the absence of adverse factors, adjustment will ordinarily be granted, still as a matter of discretion.  "In the asence of adverse factors, adjustment will ordinarily be granted, still as a matter of discretion", the BIA said, citing Matter of Oritz-Prieto, 11 I.&N. Dec. 317(BIA 1965)

Matter of Patel, 17 I&N Dec. 597 (BIA 1980), later applied this framework. The BIA held that even though Patel had established eligibility for investor classification, adjustment was properly denied as a matter of discretion because he knowingly worked without authorization while in student status and made false statements about that employment in immigration applications. 

The Policy Manual uses the same basic structure. Officers must weigh positive and negative facts under the totality of the circumstances. The applicant’s eligibility matters, but so do immigration history, compliance with status, family and community ties, employment history, hardship, criminal history, fraud or misrepresentation, public safety concerns, and other case-specific facts. In the asence of adverse factors, adjustment should ordinarily still be granted, as a matter of discretion.

Bad Facts Make Bad Law

The adage “bad facts make bad law” fits this area well. 

Many of the cases USCIS cites involved facts that made discretionary denial understandable: misrepresentation, unauthorized employment, preconceived intent, or conduct that appeared designed to avoid the consular process.

The danger is that a decision justified by bad facts can later be cited too broadly. A case involving an applicant who lied to immigration officials should not become a rule that all adjustment applicants are suspect. A case involving a visitor who entered with a concealed plan to immigrate should not become a rule that bona fide dual-intent workers, immediate relatives, or applicants with clean records should be denied adjustment merely because consular processing exists.

The Bad Facts in Matter of Blas

In Matter of Blas, the applicant entered as a visitor from the Philippines, overstayed, obtained a divorce in the United States, married a lawful permanent resident who later became a U.S. citizen, and sought adjustment through that marriage. The agency viewed the case as involving incomplete or misleading visa representations and a preconceived plan to enter temporarily but remain permanently. The BIA treated the U.S. marriage as a significant equity, but not enough to overcome the adverse facts as the agency viewed them. 

Blas is therefore not a general anti-adjustment case. It is a case about a particular factual record involving overstay, alleged misrepresentation, and equities that the agency believed were created through the very conduct it found problematic.

The Facts in Matter of Arai

Matter of Arai is different. The applicant was admitted as a visitor, applied for temporary worker or trainee status, was denied, overstayed voluntary departure, and then sought adjustment based on labor certification as a specialty cook in Japanese cuisine. The immigration judge denied adjustment as a matter of discretion, apparently treating the applicant’s interim employment as adverse. The BIA reversed and granted adjustment, finding no adverse factors affecting the application and explaining that the applicant did not need to show outstanding equities in the absence of adverse factors. 

Arai is important because it cuts against an overbroad reading of PM-602-0199. It does not say adjustment should be denied whenever the person could consular process. It says discretion must be individualized, and that in the absence of adverse factors, adjustment will ordinarily be granted.

The Bad Facts in Matter of Patel

Matter of Patel involved stronger adverse facts. Patel had been admitted as a student, later sought adjustment as an investor, and established technical eligibility under the applicable investor rule. But the BIA denied adjustment as a matter of discretion because he had worked without authorization during his student period and deliberately made false statements about that employment in multiple immigration filings. 

Patel is a strong government case where the adverse facts were specific, documented, and directly tied to immigration compliance. It supports discretionary denial where the applicant’s own conduct includes unauthorized employment and false statements. It does not support categorical denial for applicants with clean records.

How the New Policy May Increase Discretionary Denials

PM-602-0199 is likely to matter most in cases with bad facts. Applicants who overstayed, worked without authorization, violated student status, entered as visitors while intending to immigrate, made inconsistent statements to a consular officer or CBP officer, violated parole conditions, or gave false testimony may now face a more aggressive discretionary analysis.

This does not mean every such case must be denied. Some violations are forgiven by statute for certain categories, and some applicants have strong countervailing equities. But the memo signals that USCIS officers may be more likely to treat these facts as meaningful adverse factors, rather than merely as technical issues that are excused or overlooked once statutory eligibility is established.

Practically, adjustment filings may need stronger discretionary records. Applicants with any negative facts should consider submitting evidence of rehabilitation, candor, family unity, hardship, long residence, tax compliance, employment history, community ties, lack of criminal history, compliance since the violation, and reasons why adjustment in the United States is warranted.

Dual-Intent Nonimmigrants: H-1B and L-1

H-1B and L-1 applicants are in a different position from many visitors, students, and exchange visitors because the law recognizes dual intent. For H-1B workers, INA § 214(h), 8 U.S.C. § 1184(h),  states that certain permanent residence steps should not be a basis to deny H-1B admission, extension, or change of status. 

The L-1 regulation, 8 CFR § 214.2(l)(16),  is similarly protective. It provides that filing or approval of a labor certification, immigrant petition, or adjustment application for an L-1 nonimmigrant is not a basis to deny an L-1 petition, extension, admission, or change of status. 

This limits the use of “inconsistent intent” as a negative factor for H-1B and L-1 applicants. USCIS may still consider actual violations: unauthorized employment outside the petition, fraud, criminal conduct, status violations, or false statements. But the mere fact that an H-1B or L-1 worker pursued permanent residence while maintaining temporary status should not be treated as misconduct. Congress and DHS have expressly allowed that path.

Immediate Relatives and Exemptions from Certain Adjustment Bars

Immediate relatives of U.S. citizens also occupy a special position. Congress exempted immediate relatives from several normal adjustment bars, including important bars related to unauthorized employment and failure to maintain lawful status. See INA § 245(c), 8 U.S.C. § 1255(c).

That statutory protection matters. If Congress chose to forgive certain status violations for immediate relatives, USCIS should be cautious about using the same forgiven facts to deny adjustment as a matter of discretion without more. Otherwise, discretion could swallow the statutory exemption.

At the same time, immediate-relative status does not eliminate discretion entirely. It does not excuse fraud, willful material misrepresentation, certain criminal grounds, lack of inspection and admission or parole, or other inadmissibility problems unless a waiver or exception applies. Nor does it mean every immediate-relative applicant automatically merits approval. The stronger argument is that common statutory exemptions should carry real weight in the discretionary analysis, especially where the only negative facts are the very violations Congress chose to forgive.

Consular Processing as the Alternative

The memo repeatedly contrasts adjustment of status with consular processing. 

Consular processing is the ordinary route by which a person outside the United States obtains an immigrant visa through the Department of State and then enters the United States as a lawful permanent resident. 

Adjustment, by contrast, lets a person already inside the United States become a permanent resident without leaving.

The memo treats consular processing as the baseline and adjustment as the exception. But that framing does not address all relevant policy considerations. 

Congress created adjustment of status as an integral part of the immigration system, not as an accidental loophole. The availability of adjustment can reduce family separation, promote workforce stability, and allow USCIS to adjudicate cases domestically using U.S.-based records, interviews, biometrics, and fraud-detection tools.

Pros and Cons of Consular Processing for the Government

For the U.S. government, consular processing may offer some advantages. It preserves the traditional immigrant visa process, requires the applicant to appear abroad before a consular officer, and may reduce incentives for some people to remain in the United States after a temporary admission. It may also allow the Department of State to apply its own visa-screening procedures before the applicant becomes a permanent resident.

But consular processing can also impose higher operational burdens on the U.S. government. It requires overseas staffing, post security, visa appointment scheduling, document intake, medical exam coordination abroad, interagency checks, passport handling, visa printing, and reentry processing. 

Consular processing shifts workload from USCIS to the Department of State rather than reduces total government burden. The memo does not appear to analyze whether increased reliance on consular processing would cost the government more or create new backlogs at already burdened consular posts.

Adjustment of status also brings large filing fees to USCIS and allows domestic adjudication in a system already built around Form I-485, biometrics, interviews, RFEs, NOIDs, and local field office review. 

Pros and Cons for Individual Applicants, Families, and Employers

For applicants and families, adjustment of status often has major advantages.

It allows the applicant to remain in the United States with a U.S. citizen or lawful permanent resident spouse, children, employer, and community while the green card case is pending. It avoids lengthy separation, reduces international travel risk, and may allow the applicant to maintain employment authorization or lawful nonimmigrant employment while the case proceeds.

Consular processing can be faster in some cases, especially where adjustment backlogs are severe or local USCIS interviews are delayed. It may also be cleaner for applicants outside the United States or for those who cannot adjust because they lack admission or parole, are subject to an adjustment bar, or must process through a consulate for other legal reasons.

But consular processing carries real risks. Applicants may face long interview queues, administrative processing, document delays, medical exam issues, local security concerns, and the possibility of being stuck abroad if a problem arises. For families, this can mean prolonged separation. For employers, it can mean losing a key employee for weeks or months, or longer if the case is refused under INA § 221(g), placed in administrative processing, or complicated by a new inadmissibility issue.

The risk is especially significant for applicants from countries with unstable security conditions, weak civil-document systems, limited U.S. consular capacity, or long visa appointment delays. For some applicants, travel abroad is not a mere inconvenience; it can mean exposure to personal danger, loss of employment, family separation, or inability to return promptly.

Conclusion

PM-602-0199 does not change the text of INA § 245 or 8 CFR Part 245. Adjustment of status has always been discretionary for most applicants. The memo’s significance is that it places new emphasis on older “administrative grace” and “extraordinary relief” language and encourages officers to look more closely at whether applicants deserve adjustment rather than consular processing.

That emphasis may lead to more discretionary denials in cases with bad facts. But it should not be read as a license for categorical denials or generalized suspicion. Adjustment of status is not merely a favor. It is a statutory immigration benefit created by Congress. USCIS may deny adjustment in the exercise of discretion, but that discretion must be exercised lawfully: individually, rationally, consistently, and based on the facts of the applicant’s own record.

See also the Immigrant Legal Resource Center's FAQ: USCIS Memo on Adjustment of Status.