Battles brew over in-state tuition for undocumented students

A battle over in-state tuition for undocumented students has been heating up nationwide.

At least 22 states and the District of Columbia allow students — including those in the Deferred Action for Childhood Arrivals program, who are known as “Dreamers” — to pay in-state tuition at public colleges, regardless of their immigration status, according to the National Immigration Law Center. In order to qualify for the benefit, students generally must have attended a high school in the state for a certain number of years and graduated.

For more than two decades, this has been a pathway to a postsecondary education for students who might otherwise be priced out of college.

Initially, such policies had bipartisan approval. Texas was the first state to pass a law to allow undocumented students to qualify for in-state tuition through the Texas Dream Act in 2001.

“This policy allowed for other states to pass an in-state tuition policy, and since then 25 states have followed suit,” said Gaby Pacheco, president and CEO of TheDream.US, an immigration rights nonprofit. “Trying to ensure that ‘Dreamers’ had access to higher education had a lot of support, but it took years, in some cases, to pass such laws.”

Several versions of a federal law gained traction but stalled in Congress.

More recently, however, the political climate changed and a number of states — including Texas — have eliminated the tuition benefit. Several more states are currently changing their tuition laws.

When Juan, a Quest Bridge scholar, graduated from high school in Galveston, Texas, in 2022, he was accepted into 15 colleges but chose to attend the University of Houston, in part because of the in-state tuition benefit, he said. Juan asked CNBC not to publish his last name due to concerns about his family’s immigration status. 

When Texas eliminated in-state tuition for undocumented students last summer, “I got really anxious because I was so close to finishing,” he said. “If I had to pay out-of-state tuition, it would have been a very tough financial spot for me and my parents. With only a year left, I didn’t want to transfer.”

Now a senior, Juan, 21, has been able to continue to access in-state tuition rates in Texas despite the state’s new restrictions because of his active DACA status. “I know some of my friends that straight up had to leave” college, he said.

As it stands, the accounting major will graduate with his class in May. “I am going to try and become a certified public accountant and eventually go to law school and become a civil rights attorney or immigration attorney and help people who may not have been as lucky as me,” he said.

In July, the U.S. Department of Education issued a new rule determining that undocumented students are not eligible for certain federal education benefits. The rule also confirmed that some postsecondary education programs, including Pell Grants, a type of aid awarded solely based on financial need, and federal student loans “continue to be inaccessible to illegal immigrants.”

“Postsecondary education programs funded by the federal government should benefit American citizens, not illegal aliens,” Secretary of Education Linda McMahon said in a statement about the announcement. 

“American taxpayers will no longer foot the bill for illegal aliens to participate in our career, technical, or adult education programs or activities,” McMahon said. “The Department will ensure that taxpayer funds are reserved for citizens and individuals who have entered our country through legal means who meet federal eligibility criteria.” 

This notice is subject to litigation and has not been implemented, a spokesperson for the Education Department told CNBC.

“The Departments of Justice and Education are working to target these laws and policies one by one,” said Pacheco of TheDream.US. “Years and years of work got unwound.”

Under some states’ new policies, undocumented students must pay higher out-of-state tuition rates at public colleges and universities. “Out-of-state tuition costs are three times as much,” Pacheco said. “Many of them have to drop out or switch to community college.”  

At four-year public colleges, in-state tuition and fees averaged $11,950 for the 2025-2026 academic year, according to the College Board. The out-of-state tab was $31,880, on average.

“You are going to have a population of students who are graduating from high school and are not able to afford higher education,” Pacheco said. Specifically, “it’s going to become a lot harder for the non-white or non-rich communities,” she added.

In Virginia, a U.S. Department of Justice challenge to in-state tuition rates for undocumented immigrants is currently awaiting a judge’s decision, but some experts are hopeful that the state law will remain in place.

“The Virginia Dream Act is not out of hot water yet, but we are confident the judge will land on the side of the law,” said Zuraya Tapia-Hadley, CEO of the Dream Project, a state-based nonprofit that awards scholarships to undocumented and other immigrant students who live in Virginia.

About 87% of the nonprofit’s scholars rely on in-state tuition rates, according to Tapia-Hadley.

“In Virginia the average in-state tuition is around $14,000 to $16,000 — it would balloon to around $45,000 to $60,000; it would double or triple in cost,” Tapia-Hadley said.

If students become ineligible for in-state rates, there would be an “immediate impact,” she said.

“The fact is that by causing students to abandon education pursuits entirely, that negatively impacts the entire community,” Tapia-Hadley said. “By creating barriers, we would be jeopardizing our future workforce, our pipeline. It’s a loss for all.”

Correction: This article has been updated to reflect that the Department of Education’s new rule in July confirmed that some postsecondary education programs, including Pell Grants and student loans, continue to be inaccessible to undocumented students. A previous version of this article misstated the rule’s determination on those programs.

Subscribe to CNBC on YouTube.