Circuit Judge Jerry Smith said federal law prohibits states from giving discounted in-state tuition, which amounts to a benefit, to illegal immigrants based on residency when the same is not available for U.S. citizens. The Texas law violated that provision, the judge said.
“The district court correctly denied intervention after concluding that they could not plausibly defend the preemption claim,” Smith wrote in the decision. The federal law bars “states from conferring postsecondary education benefits on any illegal alien based on residence unless the same benefit is available to all U.S. citizens and nationals irrespective of residency.”
Judge Irma Carrillo Ramirez dissented, saying the lower court should not have entered its judgement six hours after the original lawsuit by the Trump administration was filed.
Students, immigrant-rights advocates, and Austin Community College appealed to the court in June after a federal judge blocked the law a year ago.
The Trump administration sued the state, and Texas Attorney General Ken Paxton agreed not to defend the case. Paxton and Justice Department attorneys said the case shouldn’t be reopened because Texas law conflicts with federal immigration law.
Texas Gov. Greg Abbot applauded the ruling.
“Texas and the Trump [Department of Justice] just secured another major victory for the rule of law,” Abbott posted on Facebook. “The Fifth Circuit upheld the end of in-state tuition for illegal immigrants in Texas.”
Texas passed the Dream Act in 2001 with bipartisan support under Republican Gov. Rick Perry.
The law allowed illegal immigrant students to qualify for in-state tuition if they graduated from a state high school or earned an equivalent diploma, lived in the state for at least three years before graduating, and signed an affidavit saying they would file for permanent residency. Other states have since passed similar laws.
Florida repealed its law in May 2025, and the Texas law was blocked a month later. As of July 2025, 23 states offered in-state tuition to illegal immigrant students.
U.S. District Judge Reed O’Connor ruled the law was unconstitutional and blocked the Texas Dream Act law June 4, 2025.
Before the ruling, Texas had the second-highest number of illegal immigrant students enrolled in higher education at 57,000, according to the Higher Ed Immigration Portal.
Austin Community College didn’t return a request for comment on the ruling.