A federal appellate court has upheld an agreement between Texas and the Trump administration ending in-state tuition for illegal aliens in compliance with federal law.
The Texas Dream Act, enacted in 2001, formerly allowed qualifying illegal alien students to pay in-state tuition rates at public colleges and universities.
In June 2025, the U.S. Department of Justice sued the State of Texas, arguing that federal law preempted the Texas Dream Act.
According to the suit, federal law preempts any state rules that grant illegal aliens benefits not afforded to all U.S. citizens. The Texas Dream Act did this because U.S. citizens from outside the state were forced to pay higher rates than the qualifying aliens.
Texas Attorney General Ken Paxton ultimately agreed with the DOJ, settling the case.
However, two advocacy groups, a community college, and a student sought to intervene—hoping to have the Texas Dream Act reinstated. The district court denied the intervention on the grounds that the statute was clearly preempted by federal law, making any such attempt futile.
This decision was appealed to the U.S. Fifth Circuit Court of Appeals in New Orleans. On Thursday, the Fifth Circuit agreed with the district court in a 2-1 decision—concluding that the contentions were meritless.
“We AFFIRM the denial of the motions to intervene and dismiss the remaining claims for want of appellate jurisdiction,” wrote Judge Jerry Smith.
Because the Fifth Circuit’s jurisdiction covers the states of Texas, Louisiana, and Mississippi, Thursday’s decision has clarified federal law in those states.
Gov. Greg Abbott immediately took to X, celebrating the ruling.
“Texas and the Trump DOJ just secured another major victory for the rule of law,” wrote Abbott. “The Fifth Circuit upheld the END of in-state tuition for illegal immigrants in Texas.”
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