Fifth Circuit Upholds Federal Ban on In-State Tuition for Illegal Aliens in Texas

The U.S. Court of Appeals for the Fifth Circuit on Thursday affirmed a lower court ruling that prohibits states from offering in-state tuition rates to illegal aliens at public colleges and universities. The 2-1 decision enforces federal law and ends Texas's long-standing policy under the 2001 Texas Dream Act that had allowed certain illegal immigrants residing in the state to pay discounted in-state rates.

The ruling stems from a consent judgment between Texas and the Department of Justice. In 2025, the DOJ sued Texas and other states including California, Kansas, and New Jersey over laws providing in-state tuition benefits to illegal aliens. Texas agreed to a permanent injunction blocking the discounted rates, which a federal district judge approved in June 2025. Advocacy groups, Austin Community College, and an affected student sought to intervene and overturn the judgment on appeal, but the Fifth Circuit rejected those efforts.

Writing for the majority, Judge Jerry Smith, joined by Judge Don Willett, held that the district court properly denied intervention. The panel concluded the intervenors could not plausibly defend against the preemption claim under federal law, which bars states from granting illegal aliens tuition benefits based on residency unless identical benefits are extended to all U.S. citizens regardless of their state of residence. The court dismissed the remaining claims for lack of appellate jurisdiction.

The decision aligns with federal statutes that preempt state policies conflicting with immigration enforcement. Texas Governor Greg Abbott hailed the outcome as a significant victory. “Texas and the Trump DOJ just secured another major victory for the rule of law,” Abbott posted on social media. “The Fifth Circuit upheld the END of in-state tuition for illegal immigrants in Texas.”

The policy shift requires public institutions in Texas to charge illegal aliens the higher out-of-state tuition rates, which can exceed in-state costs by a substantial margin. For example, annual in-state tuition at institutions like the University of Texas at Austin is significantly lower than out-of-state rates. The ruling prevents states from using residency as a basis to subsidize education for individuals present in the country illegally.

This outcome reinforces federal authority over immigration-related benefits and limits states' ability to create incentives that could encourage unlawful presence. The Fifth Circuit's decision applies directly to Texas but carries implications for similar policies challenged elsewhere. Dissenting Judge Irma Carrillo Ramirez disagreed with the majority's handling of the intervention issue.

The ruling comes amid broader efforts by the Trump administration to enforce immigration laws uniformly and prevent states from extending benefits that undermine federal policy. States must now ensure compliance with federal preemption to avoid further legal challenges or loss of federal funding tied to education programs.