Texas Ends In-State Tuition for Undocumented Students After DOJ Lawsuit

Texas agreed on Wednesday with the federal government to stop letting undocumented students in the state to access in-state tuition, in other words: ending the Texas Dream Act, action that came after the U.S. Department of Justice announced it was suing Texas over its policy of letting undocumented students qualify for lower tuition rates at public universities. Texas promptly urged the court to rule in agreement with the federal government, arguing that the law was unconstitutional and should be halted, a position that U.S. District Judge Reed O’Connor upheld.

Texas Attorney General Ken Paxton claimed credit for the outcome, saying in a statement Wednesday evening that “ending this discriminatory and un-American provision is a major victory for Texas,” echoing the argument made by Trump administration officials, as reported by The Texas Tribune.

U.S. Attorney General Pam Bondi said in a statement Wednesday, “Under federal law, schools cannot provide benefits to illegal aliens that they do not provide to U.S. citizens.” She added, “The Justice Department will relentlessly fight to vindicate federal law and ensure that U.S. citizens are not treated like second-class citizens anywhere in the country.”

Texas was the first state to adopt in-state tuition for undocumented students in 2001, requiring them to have lived in the state for three years, graduated from a Texas high school, and signed an affidavit promising to seek legal residency. Approximately 19,000 students have signed that affidavit, according to Texas Higher Education Commissioner Wynn Rosser.

Senate Bill 1798, authored by Republican Sen. Mayes Middleton of Galveston, advanced out of committee for the first time in ten years but failed to reach the Senate floor. The bill aimed to end in-state tuition benefits for undocumented students and included additional provisions, such as requiring students to repay tuition differences if misclassified, allowing universities to withhold diplomas for nonpayment, and banning the use of institutional funds for financial aid to undocumented students. Middleton, who is running for attorney general in 2026 as Ken Paxton seeks a U.S. Senate seat, welcomed the lawsuit and encouraged the state to resolve the issue by eliminating the tuition benefit.

Wednesday’s ruling puts Texas among a growing number of states reconsidering tuition equity policies. Before the decision, Texas was one of 24 states (including Washington, D.C.) offering in-state rates to undocumented students. 

Don Graham, co-founder of TheDream.US, the largest scholarship program for undocumented students, warned that removing this pathway could deter bright, motivated students from pursuing college. “It’ll hurt the workforce, it’ll hurt the economy,” he said, pointing to nursing and education as fields already facing shortages where many Dream.US scholars have gone on to work.

A 2021 report from Every Texan, a progressive nonprofit, found that students using this policy paid over $81 million in tuition and fees at Texas universities that year. Meanwhile, an analysis from the American Immigration Council estimated that eliminating in-state tuition could cost the state over $460 million annually in lost wages and consumer spending.

Legal battles over this issue have played out before. In 2022, a federal district court found that federal law barred the University of North Texas from offering benefits to undocumented students that weren’t extended to all U.S. citizens. Although the Fifth Circuit later dismissed the case on procedural grounds, it left open the possibility of further legal challenges, something the Justice Department capitalized on in its recent filing, citing that prior ruling.

As legal and political momentum builds against tuition equity for undocumented students, education advocates say the implications could be felt far beyond the courtroom.