On November 20, 2025, the Department of Justice filed a federal complaint in the U.S. District Court for the Eastern District of California challenging California’s laws that permit undocumented students to access in-state tuition rates, state financial aid, and subsidised student loans.
The lawsuit names as defendants the State of California, Governor Gavin Newsom, Attorney General Rob Bonta, and the governing boards of the public-university systems: University of California, California State University and California Community Colleges.
In its complaint, the DOJ contends that the challenged California laws “unconstitutionally discriminate” against U.S. citizens by offering tuition and financial aid benefits to undocumented individuals that are not available to out-of-state U.S. citizens.
Background: California’s Policy
California has long allowed students who attended at least three years of full-time high school (or equivalent) in the state, and graduated from a California high school or obtained a California equivalent, to qualify for in-state tuition irrespective of immigration status under laws such as AB 540.
Additionally, through laws such as the California Dream Act, undocumented students who meet these criteria may access state-administered financial aid and subsidised loans.
Proponents of the policy argue it provides equal treatment for students who have lived and studied in California schools regardless of immigration status.
The Federal Government’s Argument
The DOJ argues that under federal law — specifically 8 U.S.C. § 1623 — states are prohibited from providing higher-education benefits based on residency (or attendance) to undocumented aliens that are not equally available to U.S. citizens who are non-residents.
The complaint alleges that California’s policy gives undocumented students a “preferential” benefit in the form of reduced tuition or subsidised aid that out-of-state U.S. citizens cannot access, thus violating federal law and the Supremacy Clause.
Reaction from California
Governor Newsom’s office responded sharply, characterising the lawsuit as “meritless” and “politically motivated.” A statement from his spokesperson said: “The DOJ has now filed three meritless, politically-motivated lawsuits against California in a single week … Good luck, Trump. We’ll see you in court.”
University and college system leaders in California indicated they believe their tuition-benefit policies comply with state and federal law. For example, a spokesperson for the University of California said they will comply with court decisions but believe their practices are consistent with legal standards.
Significance and Implications
- Higher-education access at issue: California is home to more than 100,000 undocumented students eligible under its law to pay in-state tuition.
- Precedent for other states: The lawsuit follows similar federal actions against other states over in-state tuition policies for undocumented students, including in Minnesota, Illinois and Oklahoma.
- Financial stakes: In California’s public university systems, the difference between in-state and out-of-state tuition can be tens of thousands of dollars per year—so the policy has meaningful cost consequences.
- Legal scrutiny of state autonomy: The case raises larger questions about how far states may go in providing education benefits to undocumented residents, and how federal immigration/education law interacts with those state policies.
What Happens Next
The litigation will proceed in federal court where California will defend its laws. Key issues to be addressed include:
- Whether the policy treats students based on residence/attendance rather than immigration status, which may affect the federal law analysis.
- Whether the benefits provided to undocumented students are strictly comparable in scope and amount to benefits available to U.S. citizens who are non-residents (a requirement under the relevant federal statute).
- Possible outcomes may include an injunction against California’s policy, recalibration of eligibility criteria, or settlement/adjustments between the state and the federal government.
Conclusion
The DOJ’s lawsuit represents a significant legal challenge to California’s long-standing policy of offering in-state tuition and financial aid to undocumented students. The outcome will not only affect hundreds of thousands of students in California but may also influence how other states craft higher-education benefits for undocumented learners. As the case unfolds, it embodies the intersection of immigration policy, education access and federal-state legal boundaries.
