Proposed Act Threatens to Cut ALL Federal Funding for Public Colleges Offering In-State Tuition to Undocumented Students

The “American Students First Act” is short, but its impact could be massive for public colleges and universities across the country. Essentially, this bill aims to yank the financial rug out from under any public institution that tries to make college more affordable for undocumented students.

The Federal Funding Tripwire

Here’s the deal: If a public college charges an undocumented student the same in-state tuition rate that U.S. citizen residents pay, or if that college gives them any state-based financial aid, it crosses a line. The Secretary of Education would then declare that college an “ineligible institution.” This isn't a slap on the wrist; it’s a financial guillotine. If a college is found ineligible for even one year, it loses all federal financial assistance for the entire following fiscal year (Sec. 2).

Think about what “all federal financial assistance” means. It’s not just a few grants. It’s the massive pool of money that funds Pell Grants, federal student loans, research grants that keep labs running, and institutional support dollars. For a public university, losing this funding stream is an existential threat. It's the difference between functioning and folding.

Who Pays the Price?

While the bill targets state policies that benefit undocumented students, the people who would feel the pain most immediately are the students and staff who rely on federal funding. If your state university loses all federal aid, here’s how it rolls out in real life:

First, if you’re a U.S. citizen student relying on a Pell Grant or federal student loans to pay for tuition, that money evaporates. The college won't be able to process that aid, leaving students scrambling to find tens of thousands of dollars overnight. Second, to make up for the massive budget hole, the university would likely have no choice but to dramatically raise tuition for all students—citizens included—or implement severe budget cuts to programs, faculty, and research.

Consider a public university that currently offers in-state tuition to a small number of undocumented students, a policy designed to help local graduates afford college. Under this act, that single policy decision could bankrupt the entire institution, forcing American students and their families to bear the cost through higher fees and reduced services. It essentially holds the entire student body hostage over a state-level tuition policy.

The State vs. Federal Showdown

This bill inserts the federal government directly into state-level decisions about how public education is funded. Historically, states have had the autonomy to set their own tuition and aid policies. This act uses the threat of cutting off essential federal funding to force states to align their policies with the federal government's stance on immigration and education access. It’s a classic case of the federal government using its purse strings to dictate local policy, but with a much sharper penalty than usual. The punishment—cutting all funding—is so severe that it removes any real choice the state or institution might have in the matter.