Tipsheet

The Fifth Circuit Court Just Delivered a Major Ruling On In-State Tuition For Illegal Aliens in Texas

Dmitri Bolt
Dmitri Bolt  |  July 10, 2026 9:00 AM

The Fifth Circuit Court of Appeals has handed down a major ruling blocking Texas from offering in-state college tuition to illegal aliens under its state-level Dream Act. The court held that federal law overrides the policy under the Supremacy Clause.

The decision is expected to force Texas public universities to reclassify illegal alien students as out-of-state and significantly increase tuition costs for those who had qualified under the policy. It establishes a broader ripple effect, inviting similar challenges to in-state tuition programs in other states and reinforcing federal authority over immigration-related benefits. 

In 2001, Texas passed the Dream Act, which allowed certain illegal alien students to qualify for in-state tuition if they met criteria like Texas high school attendance and graduation. The Fifth Circuit Court found that the law amounts to a residence-based benefit that is not equally available to out-of-state U.S. citizens, placing it in conflict with federal law.

In June of 2025, the U.S. Department of Justice (DOJ) filed a federal lawsuit against the State of Texas seeking to overturn the in-state tuition provision. State Attorney General Ken Paxton’s office filed a joint motion with DOJ asking the court to declare the state law unconstitutional.

On Thursday, the court ruled the Dream Act unconstitutional in a 2-1 ruling.

“In-state tuition is about one-tenth the amount of out-of-state tuition and represents a monetary form of assistance, not merely a hollow status,” Judge Jerry Smith, a Reagan-appointee, wrote in the majority opinion.

"Texas and the Trump DOJ just secured another major victory for the rule of law," Governor Greg Abbott of Texas wrote in a statement on X. "The Fifth Circuit upheld the END of in-state tuition for illegal immigrants in Texas."