Denying In-State Tuition to Undocumented Students Hurts All Texans

Authored by the American Immigration Council and originally published on americanimmigrationcouncil.org

On June 4, the Department of Justice and the Texas attorney general filed suits seeking to strike down a Texas law that guarantees in-state tuition to students who are undocumented. A federal judge in Texas subsequently signed an order revoking the law, known as the Texas Dream Act. Without the Dream Act, students who are undocumented now face significantly higher educational costs. This limits their access to higher education and affects their future opportunities, which will impact economic growth and prosperity for all Texans. 

“Expanding access to higher education isn’t just good policy—it’s a smart investment in Texas’s future. Blocking talented students from earning affordable college degrees doesn’t just derail individual dreams—it drains potential from our workforce and sidelines economic opportunity. These students grew up here. They’re ready to contribute. Texas should be opening doors to the best and brightest, not turning its back on them,” said Chelsie Kramer, Texas state organizer for the American Immigration Council.

For over twenty years, the Texas Dream Act guaranteed that eligible undocumented students could access higher education. Similar legislation passed in 24 other states and the District of Columbia has widely imitated the law.

“With the repeal of the Dream Act, Texas businesses now face an unnecessary new barrier to accessing the educated workforce they need to grow and thrive. Here in San Antonio, Dreamers are more than just neighbors or colleagues, they are essential to who we are as a city. This setback will make college less accessible, resulting in fewer graduates, less innovation, and slower economic progress. It’s not just students who will suffer, it’s our entire economy,” said Luis A. Rodriguez, President and CEO of the San Antonio Hispanic Chamber of Commerce. “We shouldn’t be punishing young Texans who’ve grown up here and are ready to contribute to our state’s future.”

People who are undocumented in Texas contribute significantly to keeping the public education system afloat. In FY 2023, undocumented immigrants paid $59.8 billion in state and federal taxes. Since 2001, undocumented students using the Texas Dream Act have generated an additional $28.5 billion in economic activity. With the Texas attorney general choosing not to defend the Texas Dream Act, Texas now stands to lose $461.3 million in wage earnings and additional spending power annually. 

“Eliminating in-state tuition for undocumented students is more than a policy reversal—it’s an economic misstep. These students are part of Texas’ future workforce, contributing over $80 million annually to our higher education system and poised to fill critical roles in key sectors like healthcare, education, and technology. Removing their access to affordable education will reduce college enrollment, shrink our talent pool, and weaken our state’s long-term competitiveness. Texas has always been a place that invests in human potential. Turning our backs on these students is not just morally questionable, it’s economically irresponsible,” said J.R. Gonzales, Texas Association of Mexican American Chambers of Commerce (TAMACC)

84 organizations have signed a letter urging the Texas attorney general to reverse course and defend the Texas Dream Act—a bipartisan policy that has strengthened Texas’ workforce and economy for over two decades. The letter calls on the Attorney General to uphold Texas’ values and protect the state’s right to set its own higher education policies.

Below are the legal arguments of the letter:

Honorable Ken Paxton

Attorney General, State of Texas

Office of the Attorney General

PO Box 12548

Austin, TX 78711-2548

Dear Attorney General Paxton,

On Wednesday June 4, 2025, the U.S. Department of Justice filed a lawsuit against the State of Texas, seeking to strike down provisions under Texas law that make certain undocumented students eligible for an in-state tuition rate. Rather than defending this long-standing and lawful state policy, your office joined the DOJ in seeking to invalidate it. We urge you to reconsider this position and fulfill your responsibility to defend Texas’ right to shape its own public higher education system. This lawsuit is based on a fundamental misunderstanding of federal law and threatens not only the futures of individual students, but also the strength of our state’s economy and workforce.

On April 28, 2025, President Trump issued an Executive Order entitled “Protecting American Communities from Criminal Aliens.” Section 5, entitled “Equal Treatment of Americans,” directs the Attorney General to identify and challenge any state or local policies that favor noncitizens over U.S. citizens, and that are “unlawful, preempted by federal law, or otherwise unenforceable.” Specifically, the Executive Order suggests that laws providing in-state tuition to undocumented students, but not to out-of-state U.S. citizens may violate 8 U.S.C. § 1623.  

8 U.S.C. § 1623 prohibits states from providing a higher education benefit to undocumented immigrants based on residency, unless U.S. citizens from other states are eligible for the same benefit without having to prove state residency. In its complaint, The Department of Justice argues that Texas Education Code §§ 54.051(m) and 54.052(a)(3), which were introduced under the Texas Dream Act in 2001, are unconstitutional because they violate this federal statute.  

This lawsuit is based on a fundamental misunderstanding of federal law. 8 U.S.C. § 1623 does not ban in-state tuition for undocumented students outright. Instead, it prohibits giving a residency-based tuition break to undocumented students without giving the same tuition rate to out-of-state citizens. This means that if a state gives in-state tuition to undocumented students based solely on residency, then it must also offer in-state tuition to out-of-state U.S. citizens without requiring them to meet any state residency requirements.

8 U.S.C. § 1623 is not a new policy. This federal law came into effect in 1998, so it was already in place when the Texas Dream Act was introduced in 2001. Current Texas law complies with this federal statute because eligibility for an in-state tuition rate for undocumented students in Texas is based on completing high school education in the state and committing to legalizing their status when eligible, not just on residency. To be eligible for an in-state tuition rate under the Texas Dream Act, undocumented students must not only live in the state of Texas for a certain number of years, but must also graduate from a Texas high school (or receive the equivalent of a high school diploma in the state) and sign an affidavit affirming their intent to apply for lawful permanent resident status as soon as they become eligible to do so.  

The Texas Dream Act is legal, smart, and fair, which is why this policy has remained in place for more than 20 years and inspired 24 other states and the District of Columbia to implement similar legislation. Access to affordable higher education for eligible undocumented students under the Texas Dream Act benefits all Texans by ensuring that our state’s youth are equipped with the skills and knowledge they need to care for themselves and their families and contribute their unique capabilities to our culture, society, and economy.

Undocumented immigrants in Texas support our public higher education system by paying $5.4 billion in state and local taxes each year. In Fiscal Year 2021 alone, Texas Dream Act students, including those who are undocumented, paid $81.6 million in tuition and fees at public institutions of higher education in our state. In a tight labor market where Texas had 603,000 job openings in February 2025 and employers struggle to fill jobs with qualified workers, undocumented college graduates also help meet the demands of our state’s growing economy.

18,000 undocumented students graduate from Texas high schools each year. With access to higher education, these students can contribute in-demand skills to our state’s workforce and become leaders in their chosen fields. Revoking eligibility for an in-state tuition rate for these young people would harm their individual futures and undermine the strength of our state’s workforce and economy by placing higher education out of their financial reach.

We, the undersigned organizations, strongly oppose the Department of Justice’s attack on a long-standing state law that has yielded significant benefits for Texas young people, our state’s public education system, and our workforce and economy. We urge your office to vigorously defend the Texas Dream Act against this lawsuit.