WASHINGTON — The Department of Justice filed a lawsuit against the University of Delaware, alleging the state university charges out-of-state U.S. citizens 2.7 times more for tuition than non-citizens residing in Delaware. The university grants in-state tuition to individuals who lack legal immigration status but have attended Delaware high schools for at least three years. The DOJ claims this policy violates federal law by effectively subsidizing non-citizen students while charging U.S. citizens significantly more for the same education.
The lawsuit seeks to compel the University of Delaware to cease the practice and repay funds received under the challenged policy. A ruling against the university could disrupt its financial model and force adjustments to revenue streams that rely on tuition differentials.
For equity investors, this case matters directly. Nelnet (NNI), the dominant student loan servicer, derives substantial revenue from federal loan origination and servicing. Chegg (CHGG), the online learning platform, depends on a stable enrollment base and tuition-paying student population. Any systemic changes to tuition models or federal enforcement of higher-ed funding could alter margins and growth assumptions for both companies.
The university has not issued a formal response. The DOJ will likely seek a preliminary injunction to halt the tuition policy while litigation proceeds. Initial hearings are expected within three months. A court ruling against the university could set precedent for similar policies nationwide, creating regulatory uncertainty across the sector.
