The move comes just over a week after Immigration and Customs Enforcement announced that students at schools offering online courses only because of the coronavirus pandemic should leave the United States or transfer schools.
A person familiar with the matter told CNN that the White House had felt the flip side of the proposal and that some inside the west wing thought it was poorly designed and executed.
Another source said the White House is now focusing on applying the rule only to new students, rather than students already in the United States. The White House declined to comment on an ongoing political process.
For now, however, the decision to drop politics is a reprieve for more than a million international students in the United States. Over the past week, students have expressed frustration and concern about their next steps, while universities and colleges have announced the decision to move all courses online.
Among these universities was Harvard, who sued the Massachusetts Institute of Technology. Since then, several colleges and states have also filed complaints.
Rice University President David Leebron, speaking on CNN at the announcement, said he was "pleased" with the decision to change course.
"We thought the original rules that were suggested were cruel and misguided and did not serve our universities, did not serve our students and, frankly, did not serve our country," said Leebron.
Visa requirements for students have always been strict and it is illegal to come to the United States to take online courses only. The ICE maintained this ban in its July 6 guidelines, while providing flexibility for hybrid models, which means a mix of online and in-person classes.
The agency suggested that students currently enrolled in the United States consider other options, such as transferring to schools with in-person instruction.
"If a school is not going to open or if they are going to be 100% online, then we wouldn't expect people to be there for that," CNN's Brianna Keilar, Ken Cuccinelli, said last week Acting Assistant Secretary of Homeland Security.
This story is breaking and will be updated.Sonia Moghe, Pamela Brown and Kevin Liptak of CNN contributed to this report.