The Fifth Circuit has ended a 25-year Texas program that let people in the country illegally pay in-state tuition, ruling the state law conflicts with federal statute and tossing a long-standing disparity in how Texans and out-of-state American citizens were treated.

The appeals court issued a 2-1 decision on July 9, striking down the Texas law that had given in-state tuition to illegal immigrants for a quarter century. The ruling is a clear win for the Justice Department and for enforcing federal immigration law as written. It settles a question that had quietly persisted for 25 years.

At the center of the dispute is a simple fairness question: should an American family from Oklahoma or Louisiana pay more to attend a Texas public university than someone living in the country illegally? The Fifth Circuit said no, finding the state program directly conflicts with federal law. That ruling forces states to follow one uniform rule on residency-based tuition benefits.

Congress long ago barred states from offering higher education benefits to illegal immigrants on the basis of residency unless those same benefits are extended to all U.S. citizens regardless of home state. Texas enacted the Texas Dream Act in 2001 and gave tuition breaks to people living in the state illegally while out-of-state American citizens faced higher rates. The appeals court found that mismatch incompatible with federal statute.

The Justice Department sued Texas last summer over the tuition rules, and Texas ultimately settled, accepting a permanent injunction that was signed in June 2025. Federal and state officials agreed to put the program to an end. Despite that settlement, outside groups and a community college tried to intervene and keep the discounts alive, and the court rejected their bid.

The court rejected intervention because the state stopped defending the law and federal law plainly controls here. Judges Jerry E. Smith and Don Willett formed the majority, while Judge Irma Carrillo Ramirez dissented. Judge Ramirez, a Biden appointee, warned the court may have rushed and raised a Tenth Amendment concern about federal intrusion into state control over higher education.

Governor Greg Abbott framed the decision as a win for the rule of law and for cooperation between the state and the Trump administration’s Justice Department. He quickly celebrated the outcome as a joint victory for Texas and federal enforcement. That political framing underscores how the case landed squarely at the intersection of law and policy.

“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.”

The court emphasized that the statute does not say states cannot educate people here illegally. Instead, it bars states from offering residency-based tuition discounts to illegal immigrants that they refuse to give to citizens from other states. The majority treated that as a condition on a benefit, not a commandeering of state authority.

This decision adds to the Fifth Circuit’s string of major rulings on contentious issues, reinforcing its role as a consequential court for federal-state disputes. That court’s recent opinions have shifted debates and affected policy decisions beyond Texas. The ruling will be cited in other cases where state programs collide with federal immigration rules.

The dissent’s Tenth Amendment point raises a constitutional wrinkle that could lure future challenges to the Supreme Court. Judge Ramirez argued the federal statute might improperly direct how states run their colleges. The majority, however, saw the federal restriction as a permissible condition on benefits rather than an unconstitutional command.

The Justice Department is not treating this as a single-state matter; it targeted similar residency-based tuition programs in other states as part of a broader enforcement push. The Fifth Circuit’s ruling now provides strong appellate backing for the federal view in that region. Other circuits may see different fights and different outcomes as these cases work their way through the courts.

The fairness problem that drove the litigation was stark. For 25 years, an arrangement let a family living in Houston who was in the country illegally pay less to attend a Texas public university than an American family from Shreveport. That disparity was precisely what the federal statute aimed to prevent, and the court concluded the law must be applied.

Texas did not defend the law on the merits when the federal government sued, and the only parties who tried to keep the program alive were outside advocacy groups and a community college that sought to intervene. The Fifth Circuit found those parties lacked the standing to undo a settlement the state itself accepted, closing the procedural door on further defense in that case.

Advocates signaled they may press the fight elsewhere, with one civil rights leader calling the majority “now complicit in one of the greatest juridical travesties in recent history.” That charged language suggests the dispute could move to the Supreme Court or prompt divergent rulings in other circuits. For now, the permanent injunction remains in place and litigation is likely to continue in months ahead.