A federal judge blocked the law known as the Texas Dream Act in June after it was challenged by the Trump administration and state officials declined to defend it.
A federal appeals court on Thursday rejected an effort to defend the Texas Dream Act, leaving in place a ruling that ended a longstanding state law that allowed some undocumented students to pay in-state tuition at public colleges and universities.
The 5th U.S. Circuit Court of Appeals said advocacy groups, Austin Community College and a student could not step into the case to defend the Texas Dream Act because federal law bars states from giving undocumented students a tuition benefit based on residency unless the same benefit is available to all U.S. citizens, regardless of where they live.
The law allowed students who graduated from a Texas high school or earned an equivalent diploma in the state, lived in Texas and pledged to seek permanent residency when eligible to pay in-state tuition, even if they did not have legal immigration status.
Gov. Greg Abbott praised the 2-1 ruling on X, saying Texas and the Trump administration’s Justice Department “just secured another major victory for the rule of law.”
La Unión del Pueblo Entero and the Mexican American Legal Defense and Educational Fund called the ruling a disappointment.
“Education is a human right, no matter someone’s immigration status or background,” said Tania Chavez Camacho, LUPE’s president and executive director.
Thomas A. Saenz, president and general counsel of MALDEF, which represents Students for Affordable Tuition, said the organization would seek further review in federal court after consulting with its clients.
Saenz said the panel majority was “now complicit in one of the greatest juridical travesties in recent history,” referring to the swift end of the Texas Dream Act after Attorney General Ken Paxton’s office and the Trump administration agreed the law should be blocked.
Austin Community College said in a statement that it “remains focused on supporting all students and the community we serve” and would follow the law while continuing its mission to provide “accessible, high-quality education and opportunities for all.”
Marco Julian Gonzalez, a University of Texas at Austin business student whose fraternity and sister sorority backed the students in court, said the ruling was disheartening.
“We know who these people are and we know who they are not, and when you have politicians go on the airwaves and call our friends criminal illegal aliens we take offense and that kept us motivated to keep going,” Gonzalez said.
Judge Jerry E. Smith wrote the majority opinion for the 5th Circuit Court, joined by Judge Don Willett. Judge Irma Carrillo Ramirez dissented.
Smith was appointed by President Ronald Reagan, Willett by President Donald Trump, and Ramirez by President Joe Biden.
The background
Texas was the first state to let certain undocumented students pay in-state tuition when lawmakers passed the Texas Dream Act in 2001 with little debate and broad, bipartisan support.
The law, signed by the Republican former Gov. Rick Perry, allowed certain students without legal status to qualify if they graduated from a Texas high school or earned an equivalent diploma here, lived in the state for at least three years before graduating and signed an affidavit saying they would seek permanent residency as soon as they were eligible.
Supporters said Texas benefited from students educated in its K-12 schools by making college more affordable and moving them into the workforce. But as Republican politics shifted on immigration, the law became a target.
After multiple failed efforts from state lawmakers to change the law, U.S. Justice Department lawyers sued Texas last year. Paxton’s office quickly agreed the law conflicted with federal immigration law and asked a judge to block it. U.S. District Judge Reed O’Connor approved the agreement and blocked the law the same day.
Students for Affordable Tuition, La Unión del Pueblo Entero, Austin Community College and student Oscar Silva asked the court to let them defend the Texas Dream Act themselves.
Students for Affordable Tuition is a group of students who say they were harmed by the ruling. La Unión del Pueblo Entero, or LUPE, is an immigrant-rights group. They asked to intervene along with Austin Community College and Silva, a University of North Texas graduate student who qualified for in-state tuition under the Texas Dream Act.
O’Connor, a President George W. Bush appointee who sits in the Northern District of Texas’ Wichita Falls division, rejected their request, so they appealed to the 5th Circuit.
What the students and immigrant advocates say
Advocacy groups Students for Affordable Tuition and LUPE, Austin Community College and Silva argued they have the legal right to intervene. They urged the court to apply a more lenient standard for intervention instead of requiring proof that their defense of the Texas Dream Act would ultimately succeed.
Students for Affordable Tuition said the stakes are concrete for its members, who “face significant increases in their higher education costs, putting college out of reach for many of them, some of whom have already spent years in college and will not be able to complete their specific program.”
“The people of Texas are entitled to genuine litigation before a federal court invalidates their democratically enacted statute,” lawyers said in a legal brief to the 5th Circuit.
Thomas Saenz, the lead lawyer for Students for Affordable Tuition, also stressed that affected students did not get due process because of how quickly the Texas Dream Act was overturned.
It is “important to emphasize here how extraordinary that it all occurred as quickly as it did,” Saenz told the 5th Circuit during oral arguments on June 4. “The court needs to look at whether this extraordinary situation violated due process rights held by students for affordable tuition and the other students who benefited or would benefit in the future.”
The groups believed the Texas Dream Act did not conflict with federal law because eligibility was not based solely on residency. Students also had to graduate from a Texas high school or earn an equivalent diploma here, live in the state for at least three years before graduating and sign an affidavit saying they would seek permanent residency as soon as they were eligible.
What the federal government says
Justice Department lawyers sued Texas, saying the Texas Dream Act violated a 1996 federal immigration law. That federal law says states cannot give people who are not lawfully present a higher education benefit unless U.S. citizens can get the same benefit, no matter where they live.
U.S. Department of Justice attorneys argued that the Texas Dream Act so clearly conflicted with federal immigration law that allowing others to intervene and defend it would be futile.
“We opposed intervention … only on the grounds that it’s legally futile because the statutes are preempted,” Andrew Marshall Bernie, an attorney with the U.S. Department of Justice, told the appeals court during oral arguments last month.
Responding to concerns over due process, Bernie argued courts are not constitutionally required to hear from outside groups when a state law is challenged for violating a federal statute. In the end, he said, the outside groups did get due process because their arguments have been heard by the trial court and the 5th Circuit.
Broader impact
The Texas Dream Act opened higher education to more than 57,000 students, lawyers for LUPE, ACC and Silva told the court. The end of the law could cost Texas hundreds of millions of dollars a year through reduced wages, earnings and consumer spending, lawyers for LUPE, ACC and Silva told the court. ACC said it expected lost revenue, administrative burdens and negative effects on programs and services if the ruling remains in place.
Since O’Connor blocked the Texas Dream Act last year, students and colleges across the state have faced confusion over who still qualifies for in-state tuition.
The Texas Higher Education Coordinating Board told colleges to identify and reclassify students who are not lawfully present as nonresidents but did not provide clarity on how to do so. That uncertainty led at least one student with Deferred Action for Childhood Arrivals, or DACA, to be initially charged out-of-state tuition, The Texas Tribune previously reported.
Students for Affordable Tuition told the 5th Circuit that several Texas colleges had charged DACA recipients out-of-state rates, even though Texas lawyers said they should still qualify for in-state tuition.
Source: Jessica Priest, The Texas Tribune
Photo Credit: Students enter the College of Arts and Sciences building at Texas A&M University in College Station on Sept. 18, 2025. Antranik Tavitian for The Texas Tribune
The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
