A federal appeals court has rejected an effort to defend the Texas Dream Act, leaving in place a ruling that ended a longstanding state law that allowed some undocumented students to pay in-state tuition at public colleges and universities. The ruling closes the door on a final appellate effort by student advocates and immigration organizations to save the 25-year-old policy.
What changed
The 5th U.S. Circuit Court of Appeals ruled that advocacy groups, Austin Community College and a student could not intervene to defend the Texas Dream Act because federal law bars states from giving undocumented students a tuition benefit based on residency unless the same benefit is available to all U.S. citizens, regardless of where they live. In a 2-1 decision, the 5th U.S. Circuit Court of Appeals ruled students, immigrant advocacy groups and Austin Community College could not intervene to defend the law after Texas declined to do so, with the court saying intervention would have been futile because federal law preempts the Texas statute.
Students for Affordable Tuition (SAT), La Union del Pueblo Entero (LUPE), Austin Community College (ACC) and former University of North Texas student Oscar Silva had made “motions to intervene” in the 2025 lawsuit that declared the Texas Dream Act unconstitutional. Judge Jerry E. Smith, writing for the majority, said federal law prohibits states from offering in-state tuition to undocumented immigrants based on residency unless the same benefit is available to all U.S. citizens regardless of where they live. Judge Irma Carrillo Ramirez dissented.
Why it matters
The Texas Dream Act opened higher education to more than 57,000 students, and the law could cost Texas hundreds of millions of dollars a year through reduced wages, earnings and consumer spending. Students currently enrolled at Texas public universities under the in-state rate now face potential reclassification to out-of-state tuition, which can cost two to three times more annually.
The ruling makes clear that advocates and third parties cannot step into a case when a state chooses not to defend its own law—even when that law affects tens of thousands of beneficiaries. This has immediate practical consequences: undocumented students who qualified for in-state tuition will face sharp tuition increases at public colleges and universities across Texas. Since the lower court blocked the Texas Dream Act last year, students and colleges across the state have faced confusion over who still qualifies for in-state tuition, with the Texas Higher Education Coordinating Board telling colleges to identify and reclassify students who are not lawfully present as nonresidents but not providing clarity on how to do so.
For practitioners, the decision signals that federal courts will not permit procedural workarounds when a state attorney general declines to defend state law—even on behalf of affected stakeholders. The ruling could inspire similar challenges in Louisiana and Mississippi (both within the 5th Circuit’s jurisdiction).
Way forward
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Advise current student clients: Those enrolled under the in-state rate should verify their tuition classification immediately with their institution’s registrar, as colleges may now reclassify DACA recipients and other undocumented students as nonresidents.
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Reassess higher-education planning: For undocumented students and families, in-state tuition is no longer available in Texas. Out-of-state scholarship and financial aid sources, or transfer to other states with active in-state tuition policies, may be necessary.
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Monitor Supreme Court petitions: Advocacy groups may seek review by the U.S. Supreme Court. A petition could take weeks or months to docket, so do not rely on a potential reversal in near-term planning.
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Track legislative developments: Any Texas legislative fix would require GOP support in a hostile political environment, but state and federal legislative avenues remain open in future sessions.
Disclaimer
This article is for informational purposes only and is not legal advice. Fola is a software company, not a law firm. Immigration and education policy are complex and fact-specific; always consult a licensed immigration attorney or higher education advocate to discuss your situation. Policy and court rulings can change without notice. Verify all information against the primary source and court filings linked above.