The Fifth Circuit Court of Appeals ruled 2-1 on Wednesday that a 25-year-old Texas law granting in-state tuition to illegal immigrants at public universities directly conflicts with federal law, effectively ending the program and delivering a significant legal victory to the Trump administration’s Department of Justice.
The ruling upheld a lower court decision striking down the Texas Dream Act, which since 2001 had allowed illegal immigrants who graduated from Texas high schools to pay discounted in-state tuition rates at public colleges. Out-of-state American citizens, meanwhile, were charged far higher rates for the same seats in the same classrooms.
That arrangement, the court found, violates a federal statute barring states from granting higher education benefits to illegal immigrants based on residency unless those same benefits are extended to all U.S. citizens regardless of which state they call home. Texas was not doing that. The appeals court said defending the program was, at this point, futile, federal law clearly overrides it.
The Justice Department sued Texas last summer over the tuition rules, part of a broader legal campaign targeting similar programs in multiple states. Just The News reported that the DOJ had also sued California, Kansas, and New Jersey over comparable in-state tuition arrangements for illegal immigrants.
Texas did not fight the suit to the bitter end. The state settled with the federal government, agreeing to a permanent ban on the discounted tuition rates. A permanent injunction blocking the lower tuition was signed in June 2025.
But the settlement did not close the case. Advocacy groups, a student, and Austin Community College stepped in as intervenors, attempting to keep the program alive even after Texas itself had walked away from it. Their effort to defend the law is what the Fifth Circuit rejected on Wednesday.
The majority found that the intervenors’ position was unsustainable. Federal law preempts the Texas Dream Act because the state was offering a residency-based tuition benefit to illegal immigrants that it did not make available to every American citizen nationwide. The legal math was simple, and the court treated it accordingly.
Texas Governor Greg Abbott wasted no time claiming the win. AP News reported Abbott’s statement framing the decision in broad terms:
“Texas and the Trump DOJ just secured another major victory for the rule of law.”
On the other side, Thomas A. Saenz of the Mexican American Legal Defense and Educational Fund, MALDEF, offered a sharply different assessment. Saenz said the panel majority was “now complicit in one of the greatest juridical travesties in recent history.”
One judge on the three-member panel dissented. That judge argued the court had rushed into its decision and raised a Tenth Amendment objection, contending the federal statute at issue might improperly direct states on how to run their own colleges and universities. The dissent did not carry the day.
The ruling lands in a legal environment where federal courts have been active on immigration-related questions. In a separate case, the Fifth Circuit recently addressed ICE detention limits, illustrating the breadth of immigration disputes now moving through the appellate system.
The Texas Dream Act passed in 2001 with bipartisan support. At the time, the logic was straightforward: students who had grown up in Texas, attended Texas schools, and graduated from Texas high schools should not be penalized with out-of-state tuition rates at the state’s public colleges, regardless of immigration status.
For a quarter-century, that arrangement stood. But the underlying tension was always there. Federal law, the specific statute number was not identified in the ruling’s public discussion, explicitly prohibits states from granting postsecondary benefits to illegal immigrants on the basis of residency unless every U.S. citizen gets the same deal. Texas never extended in-state tuition to all Americans regardless of home state. That gap is what the Fifth Circuit exploited to strike the law down.
The practical result was that an American citizen from Oklahoma or Louisiana attending a Texas public university paid substantially more than an illegal immigrant living in Texas. No specific dollar figures were cited in the ruling, but the disparity was described as significant. For years, that arrangement persisted without a successful federal challenge.
Courts across the country have been issuing consequential rulings on politically charged topics with increasing frequency. From Supreme Court intervention on abortion pill access to state-level judicial orders on medical policy, the judiciary has become the primary arena where many of the country’s sharpest policy fights are resolved.
The Fifth Circuit’s decision does not merely affirm the settlement Texas already reached with the federal government. It goes further by rejecting the intervenors’ legal standing and reasoning, making it far harder for any future party to revive the program through the courts.
The ruling also carries implications beyond Texas. The Justice Department’s parallel lawsuits against California, Kansas, and New Jersey suggest the administration intends to use the same federal preemption argument to dismantle similar programs nationwide. If those cases follow the same trajectory, in-state tuition for illegal immigrants could become a relic in every state that currently offers it.
That prospect is what makes the dissenting judge’s Tenth Amendment argument worth watching. If the question of whether the federal government can dictate state tuition policy reaches the Supreme Court, the constitutional stakes rise considerably. For now, though, the Fifth Circuit’s majority opinion is the controlling law in Texas, Louisiana, and Mississippi.
The decision also arrives at a moment when federal judges have both blocked and upheld various Trump administration immigration policies, creating a patchwork of legal outcomes that will likely take years to fully resolve.
Supporters of the Texas Dream Act argued the law helped students who had no control over how they entered the country. They attended Texas schools, played by the rules available to them, and sought to continue their education. Removing the tuition benefit, they contended, punishes people for decisions their parents made.
That argument has emotional force. But it sidesteps the core legal and policy problem the Fifth Circuit identified: the federal statute exists precisely to prevent states from creating financial incentives that reward unlawful residency over lawful citizenship. When an illegal immigrant in Texas pays less for college than a U.S. citizen from a neighboring state, the incentive structure is upside down.
The law was not ambiguous on this point. Congress wrote the statute to ensure that states could not use tuition policy to effectively privilege illegal immigrants over American citizens from other states. Texas did exactly that for 25 years. The Fifth Circuit said it has to stop.
In an era when courts are being asked to settle everything from medical treatment mandates to immigration enforcement boundaries, this ruling stands out for its relative clarity. The federal law says what it says. Texas was not in compliance. The court acted accordingly.
The intervenors could seek en banc review from the full Fifth Circuit or petition the Supreme Court. Given the dissent’s Tenth Amendment concerns, a further appeal is plausible. But the practical reality is that Texas has already agreed to the ban, and the state’s governor is publicly celebrating the outcome. There is no political constituency in Austin pushing to restore the program.
The larger battle will play out in California, Kansas, and New Jersey, where the DOJ’s parallel lawsuits are still active. Those states may fight harder than Texas did. If they do, the legal question of whether Congress can tell states how to set tuition rates will get a fuller hearing, possibly before the Supreme Court.
For now, the rule is simple: if you are in the country illegally, Texas will no longer charge you less for college than it charges an American citizen from out of state.
It took 25 years and a federal lawsuit to enforce a law that was on the books the entire time. The only real question is why it took so long.
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