Americans Pay Over a Billion Dollars a Year to Subsidize Illegal Aliens’ College Education

Although a 30-year-old federal law prohibits giving illegal aliens discounted in-state tuition at public colleges and universities, 22 states and the District of Columbia still do it and the cost to American taxpayers is over a billion dollars annually. In an effort to force the violators to stop offering undocumented students the pricey benefit, a U.S. senator has introduced a bill (Put American Students First Act) to specifically prevent any alien who is not lawfully admitted for permanent residence from obtaining in-state tuition rates at public institutions of higher education. The proposed measure notes that section 505 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 already bans states from granting discounted tuition and fees to students not lawfully present in the U.S. simply because they live—albeit illegally—in that state unless the same rates are also offered to citizens of the United States regardless of residence.

Besides the discounted tuition, most of the offenders also extend additional financial aid to students in the country illegally. The Trump administration has legally challenged many of the policies, but most continue. The violators include Arizona, California, Colorado, Connecticut, Hawaii, Illinois, Kansas, Maryland, Massachusetts, Nebraska, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont, Virginia and Washington. Last year the Department of Justice (DOJ) sued several states over the policy but only three—Texas, Oklahoma and Kentucky—have terminated their in-state tuition policies for illegal alien students. Others, such as California, Oregon, Washington, Colorado and Illinois, have ignored the lawsuits. Illinois has taken it a step further by, not only blowing off the DOJ’s lawsuit, but also passing a special law making undocumented students eligible for state and local financial aid, including grants, scholarships and stipends, as of January 2026. The measure includes the same perks for transgender students who are disqualified for failing to register for selective service.

Over 500,000 illegal immigrants are enrolled in U.S. institutions of higher education, according to an alliance of college and university leaders dedicated to supporting immigrant and undocumented students and policies that create a welcoming environment for them. The Washington D.C.-based group, Presidents’ Alliance on Higher Education and Immigration, reveals that three-quarters of undocumented students live in about a dozen states and most are in just four states— California, Texas, Florida, and New York—and California leads the group with nearly 90,000 illegal alien students. The alliance insists that offering students in the country illegally discounted tuition at taxpayer-funded colleges is “tuition equity” and provides access to higher education for all students, which the group claims benefits colleges and universities as well as the U.S. economy. “Undocumented students are an integral part of American society and the U.S. higher education system,” the group claims. “They advance scientific innovation, drive economic growth, and make valuable contributions as classmates, instructors, scholars, and campus leaders.”

But are American taxpayers responsible for funding their education in rogue states that refuse to obey a decades-old federal law forbidding it? In an effort to force compliance Arkansas Senator Tom Cotton introduced the Put American Students First Act in mid-December. The bill points out that the subsidies create a perverse incentive for illegal immigration, rewarding unlawful presence with benefits unavailable to citizens and legal residents of the United States, undermining the rule of law. “Students of the United States in higher education, including students from modest-income families in neighboring States, are effectively penalized by States that provide such subsidies because the students pay higher out-of-State rates for tuition and fees while aliens not lawfully admitted for permanent residence receive taxpayer-subsidized discounts,” the proposed law states. “Enforcing this Federal prohibition nationwide is essential to restoring fairness, deterring illegal immigration, and prioritizing postsecondary education benefits for citizens and lawful permanent residents of the United States.” If congress passes the law, it will take effect in July and will empower the Secretary of Education to withhold funding from any state that violates it.