Penn State In-State Tuition Lawsuit: What DOJ Claims

The Justice Department’s 27th in-state tuition lawsuit targets a benefit created by a university board rather than a state legislature, a detail that could decide the case.

The Justice Department sued Pennsylvania State University on Nov. 5, 2026, asking a federal court to end a policy that lets some students without lawful immigration status pay Penn State in-state tuition rates. The complaint, filed in the U.S. District Court for the Middle District of Pennsylvania, argues that two provisions of a 1996 federal law preempt the policy and seeks a permanent injunction against it and any similar policy Penn State might adopt later. The department says it is the 27th lawsuit it has brought against in-state tuition for students in the country illegally.

The stakes for students run to five figures. Under schedules Penn State’s trustees approved in July 2025, first- and second-year students at University Park pay $10,439 a semester for 2026-27 as Pennsylvania residents and $22,287 as out-of-state students, a gap of roughly $23,700 over a two-semester year based on those published rates. A Penn State spokesperson said the university was aware of the complaint and reviewing it, according to the Associated Press. Neither the department’s announcement nor that response said how many students pay in-state rates under the policy.

What the Penn State in-state tuition policy covers

According to the complaint, Penn State’s “Undocumented Student Policy” offers in-state rates to students who attended an accredited Pennsylvania high school for four years and graduated, or who earned a Pennsylvania GED, with no lawful-presence requirement. It applies whether or not a student holds Deferred Action for Childhood Arrivals, and because DACA recipients are not “qualified aliens” under federal benefits law, the same statutory limits reach them (see what the midterms mean for DACA recipients).

Nothing changes for enrolled students yet. The department’s announcement describes a request for a permanent injunction and mentions no emergency motion, so any change to billing would follow a ruling.

Two statutes, two separate lines of attack

The residence claim. The first count relies on 8 U.S.C. 1623, which bars a person not lawfully present from receiving a postsecondary education benefit “on the basis of residence within a State” unless U.S. citizens are eligible for the same benefit regardless of where they live. The department says Penn State grants the discount based on Pennsylvania residence while charging U.S. citizens from other states full out-of-state tuition.

The “enacted law” claim. The second count relies on 8 U.S.C. 1621(d), which allows a state to make people without lawful status eligible for state or local public benefits only through a state law enacted after Aug. 22, 1996, that affirmatively provides for that eligibility. The complaint argues that Penn State’s benefit rests on a university policy rather than any such statute.

That second count sets this case apart from suits aimed at state statutes. If a court accepts it, the judge never has to reach the harder residence question. Penn State may respond that its rates are not a “State or local public benefit” at all: it is one of Pennsylvania’s state-related universities, which receive state appropriations but are run by their own boards, and that hybrid status is likely to be a central point of argument.

The California precedent both sides will cite

Defenders of these policies argue, as the AP reported, that they are lawful when citizens in the same circumstances get the same rate. The leading authority is Martinez v. Regents of the University of California, in which the California Supreme Court held in November 2010 that the state’s tuition exemption did not violate Section 1623 because it turned on three years of California high school attendance, not residence. The court wrote that attending high school in California and meeting the other requirements “are not the functional equivalent of residing in California.”

So the residence fight turns on a narrow fact: does a U.S. citizen who spent four years at a Pennsylvania high school and then moved away still get the in-state rate? If yes, Penn State has a Martinez-style defense. If the rate in practice depends on current Pennsylvania residence, the department’s argument gets much stronger.

The department’s track record favors it. Its announcement says suits in Texas, Kentucky, Oklahoma, Nebraska, Illinois and Kansas produced orders permanently enjoining similar laws, including one from the Fifth Circuit, though none binds a court in Pennsylvania, which sits in the Third Circuit. Assistant Attorney General Brett A. Shumate said the university “has ignored” a deliberate choice by Congress.

The next signal will be Penn State’s formal answer, which will show whether it defends the policy, revises it or settles. A lasting fix either way would have to come from Congress, since both statutes are federal, and any change to Section 1623 by the new Democratic majorities would still need the president’s signature, one of the limits on the incoming Congress’s immigration agenda.

This article is for general information and is not legal advice.

Sources

Vasanth Vaidyanathan, Esq.

Administrator

Vasanth Vaidyanathan is an immigration attorney with over 20 years of experience focused exclusively on U.S. immigration and nationality law. He holds an LL.M. from California Western School of Law, San Diego and advises individuals and businesses on employment and family-based immigration matters, including H-1B, PERM, EB categories, and adjustment of status. He has also been a featured speaker at immigration seminars across the U.S. To reach Vasanth visit: https://www.vnathan.com/

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