The Facts About Texas' In-State Tuition Law

October 11, 2011 4:20 pm ET

In 2001, Texas Gov. Rick Perry signed a law granting in-state tuition benefits to undocumented immigrants. Now that Perry is running for president, his critics, including GOP frontrunner Mitt Romney, are using Perry's support for the law to accuse him of being insufficiently tough on immigration. However, Texas' in-state tuition law is both good for the economy and legally sound. Given those facts, critics like Romney should explain why Perry's judgment about the best policy for Texas was wrong instead of simply pandering to anti-immigrant sentiment among GOP primary voters.  

Texas' In-State Tuition Law

Law Passed In 2001 With Barely Any Opposition

In 2001, Gov. Rick Perry Signed A Law That Allowed "Tuition Equity For Undocumented Students." According to a Higher Education Access Alliance fact sheet: "Then in 2001, Texas became one of the first states to pass tuition equity for undocumented students. The original bill goes significantly farther than Colorado ASSET by conferring residency on any student who: graduated from a public or private Texas high school or received a GED and maintained a continuous residence in Texas for the three years preceding their graduation/receipt of a GED. ... When the issue came before the legislature in 2001, the House (which at the time had a 78-72 Democratic majority) voted 142-1 in favor. The Senate, with a 16-15 Republican majority, voted 27-3 to pass it. Then, Republican Governor Rick Perry signed the bill into law." [, accessed 10/5/11]

The Texas Law Passed By Large Margins With Strong Bipartisan Support. According to the Texas Tribune:

In the Senate, the bill passed by a 27-to-3 vote, with 12 Republicans and 15 Democrats in favor, and three Republicans against. Seven of the 12 Republicans who supported the bill continue to serve today in the Texas Senate, with three (Sens. John Carona, Troy Fraser and Florence Shapiro) among only eight senators (out of a total of 19 Republicans) to receive awards for their legislative voting record from the conservative watchdog group Empower Texans. Also voting yes was Texas Commissioner of Agriculture Todd Staples, who was then a senator.

The final version of the bill received even stronger Republican backing in the House, with 64 Republicans joining 66 Democrats to vote yes (130 total) versus only two dissenting votes (both Republicans). In the vote on the original version of HB 1403 on April 23, 67 Republicans joined 75 Democrats to approve the bill, with one Republican voting no. Ten years later, 23 of the 64 Republicans (along with two Democrats who would later switch to the Republican Party) who voted yea on the final version of the bill continued in office, as did two Republicans who voted for the bill on April 23 but were absent on May 24. [Texas Tribune, 9/27/11]

In-State Tuition Is Good For The Economy

Undocumented Immigrants Pay Taxes

Houston Chronicle: 1.65 Million Undocumented Texans Paid $1.6 Billion In Property And Sales Taxes This Year. According to the Houston Chronicle:

Yesterday, millions of Americans stuck the stamp on their tax forms, just in the nick of time. This includes $1.6 billion from the estimated 1.65 million illegal immigrants in Texas, according to the Immigration Policy Center.


The estimates are based on income, sales and property taxes, except for states that don't have income tax, such as Texas. The statistics were released to remind legislators and voters that illegal immigrants contribute to the economy, and should keep that in mind when deciding how to deal with illegal immigrants and the porous southern border.

Texas' taxes collected from illegal immigrants:

Property taxes: $177,814,936

Sales tax: $1,429,479,799

Total: $1,607,294,735

[Houston Chronicle, 4/19/11]

Undocumented Immigrants Had A Net Positive Impact Of $17 Billion On Texas Economy In 2005. According to a report compiled by the Office of the Comptroller of Texas:

[Texas' Office of the Comptroller, Undocumented Immigrants In Texas, December 2006]

WSJ: Undocumented Immigrants In Texas "Are More Likely To Bear A Larger Share Of The Tax Burden Than Their Counterparts In Most Other States." According to the Wall Street Journal:

Mr. Romney's outrage that Texas offers college tuition subsidies to illegal residents is also opportunistic, assuming it is sincere at all. In 2001, Texas passed the nation's first state law that allowed undocumented high school graduates to pay in-state tuition at public colleges and universities. To qualify, students have to attend school in the state for at least three years and file an affidavit saying that they plan to seek permanent residency.

Mr. Perry didn't help himself by calling his critics on this issue heartless, and he could do a better job of explaining the program's rationale. Lower in-state tuition rates at public colleges and universities aren't akin to welfare for the indigent; they're not means-tested. They're a discount for residency. The same logic applies to hunting or fishing licenses.

Immigration status aside, state residents are thought to be deserving of a subsidy because they pay sales taxes, property taxes and other fees to support state institutions that nonstate residents don't pay. Especially in a state like Texas that has no income tax, illegal aliens are more likely to bear a larger share of the tax burden than their counterparts in most other states. [Wall Street Journal, 9/27/11, emphasis added]

In-State Tuition Generates Revenue For Schools

Texas Paid Out $21.63 Million In FY 2010 To Students Who Qualified For In-State Benefits. According to the Texas Higher Education Coordinating Board:

Coordinating Board staff estimates that the state GR-direct appropriations from the Texas Legislature-for formula funding provided to institutions for instruction and financial aid distributed to students totaled $21.63 million in FY 2010. The breakdown by each type of general revenue is as follows:

Formula Funding GR*: $12.1 M

Financial Aid GR+: $9.53 M

[Texas Higher Education Coordinating Board, October 2011]

  • However, Students Who Qualified For In-State Benefits Paid Approximately $32.7 Million In Tuition and Fees In FY 2010, A Net Gain Of $11.07 Million. According to the Texas Higher Education Coordinating Board: "Institutions of higher education report students who completed an affidavit paid approximately $32.7 million in tuition and fees in Fiscal Year 2010." [Texas Higher Education Coordinating Board, October 2011]

Removing The Tuition Benefit Will Have An Estimated "Net Loss Of Almost $92 Million In Tuition In Fiscal Year 2016 Alone." According to Texas immigration attorney Susan Nelson: "A law was proposed in the 2011 legislative session that would have required undocumented students to pay non-resident tuition. The Higher Education Coordinating Board estimated that almost 20,000 students would be affected by the change, and calculated that the state's institutions of higher learning would suffer a net loss of almost $92 million in tuition in fiscal year 2016 alone." [Texas Immigration Lawyer Blog, 9/25/11]

Beneficiaries Earn More, Contribute More To The Economy

During The Fall 2009 Semester "12,138 Students - About 1 Percent Of All Texas College Students - Benefited From The State Law Granting In-State Tuition." According to The Dallas Morning News: "During the fall semester, 12,138 students - about 1 percent of all Texas college students - benefited from the state law granting in-state tuition, according to the Texas Higher Education Coordinating Board. Most of the immigrants among those students are illegal, and some others are not legal permanent residents or U.S. citizens." [Dallas Morning News, 3/15/10]

WSJ: "A College Graduate's Lifetime Earnings Are Nearly Double Those Of Someone With Only A High School Diploma." According to the Wall Street Journal:

Most children of illegal immigrants-some 73%, according to the Pew Hispanic Center-are U.S. citizens by birth. But as of 2008 there were 1.5 million children in the U.S. who are illegal. The Supreme Court has ruled that these children are entitled to a K-12 education. Lawmakers in Texas, which is home to the nation's second-largest illegal population after California, determined that tuition breaks for these residents made economic sense. So did the state's business community, which lobbied for the measure on the grounds that a better educated population would translate into stronger economic growth.

State tax officials estimated that increased college enrollment by illegal immigrants would be budget neutral. It would bring in new students who would pay tuition, and those students who graduated would produce increased tax payments to the state. A college graduate's lifetime earnings are nearly double those of someone with only a high school diploma. The Dallas Morning News has reported that in 2009 illegal immigrants who were taking advantage of the tuition subsidy were 1% of the state's million-plus college students. The program is hardly the draw on state coffers that critics have claimed. [Wall Street Journal, 9/27/11, emphasis added]

Greater "Economic Contribution" Of College Graduates Suggests Long-Term "Financial Benefit" Of In-State Tuition Laws. According to The Chronicle of Higher Education:

In addition, "they don't consider the long-term benefits of educating someone and the economic contribution college graduates give back to the community" when they buy more goods and pay more taxes, Kimberly Mehlman-Orozco, director of the policy institute, said in an interview.

She said more study was needed to substantiate the economic benefits of providing in-state tuition policies, "but from the digging we've done, it appears that there is no cost to states, and there might even be a financial benefit." [The Chronicle of Higher Education, 5/18/11]

In-State Tuition Laws Are Legally Sound

Establishment Of Public Education For Undocumented Immigrants

A 1975 Law Restricted Free K-12 Education "To U.S. Citizens And Foreigners Legally In The Country." According to The Telegraph:

The Justices today are considering a 1975 Texas law restricting free elementary, junior high and high school education to U.S. citizens and foreigners legally in the country.

Lower courts struck down the law, and a related Tyler, Texas, school district policy of charging $1,000 annual tuition for each illegal alien child in public schools. [...]

The 5th U.S. Circuit Court of Appeals ruled in October 1980 that "all aliens - even those illegally within the territorial boundaries of the United States - are entitled to equal protection of the laws." [The Telegraph, 12/1/81]

The Supreme Court Decision In Plyler V. Doe Overturned The 1975 Law And Held That Denying State Funds For Children Of Undocumented Immigrants Violates The Equal Protection Clause. From the Supreme Court decision in Plyler v. Doe:

A Texas statute which withholds from local school districts any state funds for the education of children who were not "legally admitted" into the United States, and which authorizes local school districts to deny enrollment to such children, violates the Equal Protection Clause of the Fourteenth Amendment. [...]

In May 1975, the Texas Legislature revised its education laws to withhold from local school districts any state funds for the education of children who were not "legally admitted" into the United States. The 1975 revision also authorized local school districts to deny enrollment in their public schools to children not "legally admitted" to the country. Tex. Educ. Code Ann. 21.031 (Vernon Supp. 1981). These cases involve constitutional challenges to those provisions. [Plyler v. Doe, 6/15/82, via]

Two 1996 Federal Statutes Allowed Undocumented Students To Attend College, But Let Individual States Decide In-State Tuition Benefits. According to Michael A. Olivas, the William B. Bates Distinguished Chair in Law at the University of Houston Law Center, via Change: "In 1996, the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) and the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) set the federal rules in place: undocumented students may attend colleges, private and public, but states that wish to enable these students to be eligible for in-state public college tuition must pass legislation allowing them to establish in-state residency. Ten states have accorded them that right, while three have passed laws denying it." [Change, July-August 2008]

Courts Reject Legal Challenges To In-State Tuition Laws

California Became The Second State After Texas To Grant In-State Tuition Benefits to Undocumented Immigrants. According to the National Immigration Law Center: "California students and educators refer to the challenged law by its bill number, AB 540.  When AB 540 was enacted in Oct. 2001, it was the second such provision to become law, after Texas's HB 1403.  Since then, eight other states have enacted similar laws; they are Utah, New York, Oklahoma, Washington, Kansas, Illinois, New Mexico, and Nebraska.  A majority of the undocumented immigrants in the country live in these ten states.  All of these states provide their in-state tuition rate to students, regardless of immigration status, who attend high school for a certain number of years in the state, graduate from high school or obtain a GED in the state, and who, if they are not yet permanent residents, sign an affidavit promising to apply for permanent residency whenever they become eligible to do so." [, 10/10/06]

Legal Challenges To In-State Tuition Laws Claim That "They Violate Section 505 Of The Illegal Immigration Reform And Immigration Responsibility Act of 1996." According to the National Immigration Law Center:

In recent years a number of other states have considered enacting similar provisions, in some cases coming very close to doing so.  But supporters have often been thwarted by the claims of FAIR and others that such provisions violate federal law.  Specifically, opponents have vociferously argued that they violate section 505 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA), 8 U.S.C. section 1623, which imposes certain conditions on state-funded higher education benefits for undocumented immigrants. 

Section 505 provides, in pertinent part:

Notwithstanding any other provision of law, an alien who is not lawfully present in the United States shall not be eligible on the basis of residence within a State (or a political subdivision) for any postsecondary education benefit unless a citizen or national of the United States is eligible for such a benefit (in no less an amount, duration, and scope) without regard to whether the citizen or national is such a resident.  [Emphasis added.]

Opponents of laws such as AB 540 have argued that Section 505 effectively prohibits a state from providing in-state tuition or other higher education benefits to any undocumented immigrant because it requires any state that does so to permit all U.S. citizen nonresidents to attend their colleges at the in-state rate.  They claim that AB 540 and similar provisions in other states violate federal law because the states continue to charge most nonresidents a higher rate than residents, even though some undocumented immigrants qualify for the in-state rate. [, 10/10/06]

California Supreme Court Ruled The California Law Does Not Violate Federal Law Because Tuition Is Contingent Upon Graduation, Not Residency. According to the Los Angeles Times:

But last year, in the first ruling of its kind, the California Supreme Court said the state's policy did not conflict with federal law because the tuition benefit turned on a student's high school graduation, not his or her residency. In the 2001 law, the state said it would give in-state tuition to a qualified student who attended a high school in California for three years and graduated.

Under this interpretation, a student from Oregon who graduates from a high school in California could obtain in-state tuition in the University of California system. In defense of its law, California education officials said that many of those who took advantage of its in-state tuition policy were U.S. citizens who hailed from other states. [Los Angeles Times, 6/6/11]

The United States Supreme Court Affirmed The California Supreme Court Decision When They Refused To Hear The Appeal. From the Los Angeles Times:

Citing this confusion over the meaning of federal law, the Washington-based Immigration Reform Law Institute had appealed the California case to the Supreme Court. Kris W. Kobach, a Kansas lawyer and counsel for the group, said the federal law "will become a dead letter in any state where the legislature is willing to play semantic games to defeat the objectives of Congress."

But the justices refused to hear his appeal in the case of Martinez vs. Board of Regents of the University of California. [Los Angeles Times, 6/6/11]

  • Because Of The Decision To Allow In-State Tuition Benefits In The Martinez Case, Texas' Law Was Also Upheld. According to the Los Angeles Times: "The [Supreme] court's action turning down the appeal is not an official ruling, but it leaves in place laws in 11 other states that permit illegal immigrants to obtain in-state tuition. They are Illinois, Kansas, Maryland, Nebraska, New Mexico, New York, Oklahoma, Texas, Utah, Washington and Wisconsin." [Los Angeles Times, 6/6/11]