The Fifth U.S. Circuit Court of Appeals on Wednesday affirmed that federal law prohibits states from offering in-state tuition rates to illegal immigrants, a ruling that keeps Texas's quarter-century-old tuition benefit permanently blocked and puts every other state running a similar program on notice.
Judge Jerry Smith, writing for the panel majority, held that 8 U.S.C. § 1623 preempts the Texas provisions because a state cannot grant illegal immigrants a residency-based tuition benefit unless every U.S. citizen qualifies for it regardless of where they live. The court also affirmed a lower court's refusal to let outside groups intervene and defend the discounted rate, finding those groups offered no viable defense and, as nonparties, could not appeal the underlying consent judgment.
The decision caps a legal chain that began when the Department of Justice sued Texas in June 2025 over the tuition law. Texas agreed to a consent judgment blocking the benefit the same day the suit was filed. When unnamed outside groups tried to step in and save the program, they were turned away at every level, and the Fifth Circuit's July 9 opinion now seals that outcome.
Texas became the first state to extend in-state tuition rates to illegal immigrants back in 2001. For nearly a quarter century, students who lacked legal status could pay the same reduced rate as Texas residents at public universities. A 2023 federal appeals court decision flagged likely preemption trouble with that policy, and the DOJ used it as the foundation for its enforcement action.
The speed of the June 2025 resolution drew sharp attention. The DOJ filed suit, and Texas agreed to a consent judgment blocking the law on the very same day. Judge Irma Carrillo Ramirez, who dissented from Wednesday's ruling, noted that the district court approved the deal roughly six hours after the suit landed.
Ramirez argued the relevant federal statute violates the Tenth Amendment by directing states rather than regulating individuals, pointing to the Supreme Court's ruling in Murphy v. NCAA. She also expressed doubt that a genuine dispute ever existed between the DOJ and Texas, a concern echoed by the would-be intervenors, who called the arrangement a "friendly suit" because both sides wanted the same result.
The majority was unmoved. Smith's opinion held that preemption stood regardless of how quickly the parties reached agreement.
Then-Attorney General Pam Bondi praised the original consent agreement in a DOJ statement, framing the tuition benefit as an affront to U.S. citizens who were forced to pay higher out-of-state rates than illegal immigrants received.
"The Justice Department commends Texas leadership and AG Ken Paxton for swiftly working with us to halt a program that was treating Americans like second-class citizens in their own country."
Bondi did not stop there. She issued a direct warning to other states maintaining similar programs.
"Other states should take note that we will continue filing affirmative litigation to remedy unconstitutional state laws that discriminate against American citizens."
That warning carries real weight. The DOJ has already brought similar cases against several other states, according to a litigation tracker maintained by the Presidents' Alliance. The exact number and outcomes of those cases were not detailed, but the Fifth Circuit's holding now gives the DOJ a strong appellate precedent to deploy in each one.
Brett Shumate, posting on X under the handle @AAGShumate, summarized the ruling plainly: "The Fifth Circuit has held that federal law prevents states from providing in-state tuition benefits to illegal aliens."
The legal picture is not entirely settled nationwide. A federal court in Minnesota rejected the DOJ's reading of the same statute in a ruling issued in March, though the specific year of that decision was not identified in the Daily Caller's reporting. Whether that ruling creates a direct conflict with the Fifth Circuit's holding, the kind of circuit split that could eventually push the issue toward the Supreme Court, remains an open question.
For now, the Fifth Circuit's opinion governs Texas, Louisiana, and Mississippi. States inside that jurisdiction can no longer offer residency-based tuition discounts to illegal immigrants without running afoul of federal law as interpreted by the appeals court.
The federal statute at the center of the case, 8 U.S.C. § 1623, sets a simple condition: if a state grants a postsecondary education benefit to an illegal immigrant based on residence, it must offer the same benefit to all U.S. citizens regardless of where they live. Texas's law failed that test. Out-of-state American students paid more than illegal immigrants who established Texas residency, a structure the DOJ argued discriminated against citizens.
Judge Smith's majority opinion treated the preemption question as straightforward. The outside groups that tried to intervene could not identify a viable defense to the federal statute's plain requirements. And because they were denied party status, they had no standing to challenge the consent judgment itself.
The dissent from Judge Ramirez raised a structural constitutional objection, that Congress lacks the power to commandeer state tuition policy under the Tenth Amendment, but it did not carry the panel.
The ruling leaves several threads unresolved. The identities of the outside groups that fought to save the tuition break were not specified in the court's public record as reported. Which other states face active DOJ litigation over identical programs, and how those cases will interact with the contrary Minnesota ruling, remain unclear.
What is clear is the practical result: a benefit that Texas pioneered in 2001 is gone. And the DOJ has signaled, in Bondi's words, that it intends to use "affirmative litigation" to dismantle similar programs wherever they exist.
For a generation, states quietly extended taxpayer-subsidized tuition rates to people who had no legal right to be in the country, while American families from neighboring states paid full freight. The Fifth Circuit just confirmed what common sense should have made obvious: federal law does not allow that arrangement, and it never did.
