The announcement by the U.S. State Department countered a statement by a hospital in Duluth, Minn., treating Muhammad Shahzaib Bajwa, the (Minneapolis) Star Tribune reported Friday.
"We are working closely with the family as they determine next steps, and have ensured that the student remains in status while they work through these difficult decisions," State Department spokesman Mark Thornburg said in a statement.
St. Mary's Medical Center had earlier said the department "is not renewing Mr. Bajwa's visa."
Bajwa, an exchange student at the University of Wisconsin-Superior, was injured in November in a car collision with a deer.
Family members fear Pakistani hospitals will not be able to adequately care for Bajwa if he is forced to return home in his present medical condition.
Shahraiz Bajwa, 22, the student's older brother, was relieved to hear the government's statement. He said earlier in the week he did not think his brother could survive a 24-hour flight to Pakistan.
Thornburg said the State Department was "making every effort to offer as much flexibility as possible" to the family.
Maureen Talarico, a spokeswoman for the organization that runs St. Mary's, said the State Department announcement was "the first we've heard."
"Our focus at St. Mary's Medical Center is on the health and care of this patient while he is at our facility," she said. "This includes protecting his privacy."
In a statement emailed to United Press International, the Minnesota chapter of the Council on American-Islamic Relations said it "welcomed the State Department's decision to not deport Muhammad Shahzaib Bajwa. The family has received verbal assurances that Bajwa will not be deported but is still awaiting details on the State Department's decision."
2014: The Year in Fashion [PHOTOS]
White House intruder had a knife