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The University of North Texas can continue to charge out-of-state students a higher tuition rate than undocumented students living in Texas, according to a Monday decision from the Fifth U.S. Circuit Court of Appeals. The decision reversed a previous federal district court ruling and injunction that blocked the university from charging out-of-state tuition while the Texas Dream Act was in effect. The 2001 Texas law allows undocumented students residing in the state to pay in-state tuition.

The lawsuit was filed three years ago by the Texas Public Policy Foundation, a conservative think tank in the state, on behalf of the Young Conservatives of Texas, a student group at the University of North Texas, The Texas Tribune reported.

The lawsuit highlights that the federal Illegal Immigration Reform and Immigrant Responsibility Act of 1996 asserts that a person “who does not legally reside in the United States should not be eligible for a postsecondary education benefit granted on the basis of where someone lives unless United States citizens qualify for the same benefit.”

The appeals court decision concluded that the district court ruling relied on a faulty legal analysis. Rob Henneke, executive director and general counsel of the Texas Public Policy Foundation, told the Tribune that he disagrees but the foundation would explore possibilities for further legal action.

The appeals court ruling concludes, “There may be valid preemption challenges to Texas’ scheme here. But this is not one of them.”

Advocates for undocumented students celebrated the move.

“The unanimous Fifth Circuit Court’s decision upholds the rule of law,” Miriam Feldblum, executive director of the Presidents’ Alliance on Higher Education and Immigration, said in a statement. “The state’s affirmative state policies that allow Texas’s Dreamers—who have grown up in the state and graduated high school there—to access in-state tuition and financial aid positively impact Texas’ economic growth, workforce development, retention of talent, entrepreneurship, innovation, and its competitive advantage.”

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