The Fifth U.S. Circuit Court of Appeals has affirmed a lower court ruling that blocks Texas from offering in-state tuition rates to illegal aliens at its public colleges and universities, citing federal law.
Assistant Attorney General Brett Shumate publicly announced the appellate victory Thursday on X, sharing the outcome and linking to court documents. Gov. Greg Abbott also posted about the ruling on the same day.
Texas and the Trump DOJ just secured another major victory for the rule of law.
The Fifth Circuit upheld the END of in-state tuition for illegal immigrants in Texas.
— Greg Abbott (@GregAbbott_TX) July 9, 2026
The decision upholds a June 2025 consent judgment in which the State of Texas agreed with the U.S. Department of Justice that the practice violated 8 U.S.C. § 1623(a). That federal statute prohibits states from providing postsecondary education benefits to aliens not lawfully present unless U.S. citizens or nationals are eligible for the same benefit without regard to residency.
The ruling applies only to Texas.
It stems from a challenge to provisions of the Texas Education Code, originally enacted as the Texas Dream Act in 2001.
Background of the Texas Dream Act
Texas became the first state to allow certain students without lawful immigration status to pay in-state tuition rates. Signed by then-Gov. Rick Perry, a Republican, the law required students to graduate from a Texas high school or equivalent, live in the state for at least three years before graduation, reside in Texas for one year before enrolling in college, and sign an affidavit promising to pursue legal residency.
For more than two decades, the policy remained in place despite multiple attempts in the Texas Legislature to repeal it. In 2025, a bill to end the practice advanced out of a Senate committee but did not reach the floor.
The 2025 Federal Lawsuit and Consent Judgment
On June 4, 2025, the Department of Justice sued Texas, arguing the state’s policy conflicted with federal law because out-of-state U.S. citizens must pay higher nonresident rates. Hours later, Texas Attorney General Ken Paxton filed a joint motion agreeing with the DOJ.
U.S. District Judge Reed O’Connor entered a consent judgment declaring the relevant provisions unconstitutional as applied to aliens not lawfully present and permanently enjoining their enforcement.
The change took effect immediately for the 2025-2026 academic year. The Texas Higher Education Coordinating Board directed institutions to adjust tuition classifications accordingly.
Fifth Circuit Decision and Announcement
The Fifth Circuit upheld the district court’s judgment in early 2026. On July 9, 2026, Assistant Attorney General Brett Shumate announced the appellate victory on X, stating the court held that federal law prevents states from providing in-state tuition benefits to illegal aliens.
The decision is final for Texas. The state indicated it would not appeal further, and the consent judgment resolved the matter without a full trial on the merits.
Impact on Current and Prospective Students
Illegal alien students no longer qualify for in-state tuition. They must pay nonresident rates, which are typically several times higher. Deferred Action for Childhood Arrivals (DACA) recipients and other students who are lawfully present in the U.S. generally remain eligible for in-state tuition, according to current Texas state guidance.
Current enrollees who previously received in-state rates face higher costs for future semesters unless they can establish lawful presence.
Schools have been instructed to comply with the court ruling when determining residency status. Exact numbers of affected students vary by source, but earlier estimates placed the number of affidavit signers around 19,000 in recent years, though this figure included some legally present students.
No comprehensive public data tracked the precise number of currently enrolled illegal aliens receiving the benefit before the ruling.
Legal History and Precedent
The case built on the Fifth Circuit’s earlier observations in Young Conservatives of Texas Foundation v. Smatresk (2023), which noted that Texas’ in-state tuition rules for illegal aliens appeared to conflict with 8 U.S.C. § 1623(a) while nonresident citizens paid more.
The appellate panel affirmed that the challenged provisions are expressly preempted by federal law.
