The U.S. Fifth Circuit Court of Appeals has denied a request to rehear a case challenging the end of Texas’ in-state tuition benefits for illegal aliens, leaving the court’s July ruling in place.
The Texas Dream Act 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 Texas, arguing the law conflicted with federal immigration law. The DOJ argued that federal law prohibits states from granting illegal aliens benefits that are not equally available to U.S. citizens.
Because the Texas Dream Act allowed qualifying illegal aliens to receive in-state tuition while U.S. citizens from outside Texas generally paid higher out-of-state rates, the DOJ argued the law was preempted.
Texas Attorney General Ken Paxton agreed with the federal government and settled the case, ending the Texas Dream Act.
Two advocacy groups, Austin Community College, and an independent student subsequently sought to intervene in the case and undo the judgment.
The district court rejected their motions, finding the law was clearly preempted by federal law and that their efforts to intervene would be futile.
The groups appealed, but a Fifth Circuit panel upheld the district court’s decision in July. The court concluded that illegal aliens who satisfy Texas’ residency requirements could receive in-state tuition while out-of-state U.S. citizens could not receive the same benefit, creating a disparity prohibited by federal law.
In late August, the groups asked the Fifth Circuit to rehear the case before the entire court, arguing that the three judge panel had improperly denied their attempt to intervene and that the Texas Dream Act complies with federal law.
The Fifth Circuit denied the petition on September 8. The court treated the requests for en banc rehearing as petitions for panel rehearing and denied both. The court also noted that no member of the three-judge panel or judge in regular active service requested a poll on whether to rehear the case en banc.
The decision leaves the Fifth Circuit’s July ruling in place, ending in-state tuition for illegal aliens.
