Undocumented Immigrants who graduated from state high schools can continue to receive lower, in-state tuition at California's public universities and colleges, the California Supreme Court decided unanimously Monday.

The ruling is the first of its kind in the nation. California is one of 10 states that permit undocumented immigrants to receive in-state tuition, which can save them $23,000 a year at the University of California.

"Throughout the country, the California court decision will have reverberations," said Daniel J. Hurley, director of state relations and policy analysis for the American Assn. of State Colleges. He predicted it would discourage challenges to similar policies in other states.

Federal law prohibits Undocumented Immigrants from receiving college benefits based on residency and not provided to all citizens.

A lawyer for the conservative Pacific Legal Foundation, which sided with the challengers in the case, said the ruling failed to acknowledge "clear tension between federal law and the state's special financial benefits for Undocumented Immigrant students." The case is expected to be appealed to the U.S. Supreme Court.

"California is not in sync with the federal mandate against giving Brownie points for being an Undocumented Immigrant," said Ralph Kasarda, an attorney with the foundation.

But state officials insist that there is no conflict with federal law. Under California's nonresident tuition exemption, approved in 2001, public colleges can offer in-state tuition to those who attended California high schools for at least three years. Some of those students are Undocumented Immigrants. Others are U.S. citizens who attended high school in California but whose families may now live elsewhere, or those who moved out of the state to study or attended boarding schools in California.

The Immigration Reform Law Institute, the Washington, D.C.-based group that challenged California's law, contends that more than 25,000 undocumented students attend the state's public colleges and that lower tuition for Undocumented Immigrants costs the state more than $200 million annually.

The state's colleges and universities say that more than 41,000 students, less than 1% of total enrollment, qualify for the lower tuition under California law but that many of those are U.S. citizens.

At the 10-campus University of California, about 2,019 students paid the in-state tuition provided by the law, according to statistics for the 2008-09 school year. About 600 are believed to be undocumented, UC officials said.

About 3,600 Cal State students qualified for in-state tuition under the law, which saves them about $11,000 a year.

California's community colleges enroll about 36,000 students who pay the lower fees as a result of the law, which saves them an average of about $4,400 a year. Cal State and community college officials said they did not know how many of those are Undocumented Immigrants but those students too deserve an education.

"The higher the number of degree-holders living in our state, the more likely we are to meet future workforce demands," said statewide community colleges Vice Chancellor Terri Carbaugh.

Undocumented students expressed relief at the ruling. Undocumented Immigrants are not entitled to government financial aid.

Diego Sepulveda, 23, a fourth-year, undocumented student at UCLA, said he would have been unable to pay the higher tuition. He commutes by bus from his family's Huntington Park home to the Westwood campus and depends on his factory worker parents, part-time jobs and some private donations to help pay the bills.

"I'm breaking a lot of the barriers my family never thought it was possible to do," said Sepulveda, who hopes to attend law school.

University officials also were gratified. "Through their hard work and perseverance, these students have earned the opportunity to attend UC," said UC President Mark G. Yudof. "Their accomplishments should not be disregarded or their futures jeopardized."

Christine Helwick, general counsel for the Cal State system, said most undocumented students entered the United States when they were young and attended schools here. "It would have been foolhardy to tell them they are no longer welcome when they get to higher education," she said.

A state appeals court had unanimously overturned the tuition law on the grounds that it conflicted with a federal prohibition against giving Undocumented Immigrants benefits based on residency.

Justice Ming W. Chin, one of the more conservative members of the California Supreme Court and the son of Chinese immigrant potato farmers, said in Monday's ruling state law was not based on residency and therefore did not conflict with the federal prohibition.

"Every nonresident who meets the law's requirements — whether a United States citizen, a lawful alien or an unlawful alien — is entitled to the nonresident tuition exemption," Chin wrote.

The case was brought on behalf of citizens who are paying the higher out-of-state tuition rates. The group contended that lower tuition could not be offered to illegal students and denied to some citizens.

But Chin said the court was not making policy, simply interpreting the law on "a controversial subject."

"It cannot be the case that states may never give a benefit to unlawful aliens without giving the same benefit to all American citizens," Chin wrote.

Two similar laws have been challenged in Texas and Nebraska, where lawsuits are pending in the lower state courts.

A federal lawsuit against a Kansas in-state tuition law, also filed by the citizens' rights group, was dismissed on the grounds the group lacked legal authority, or standing, because it was not directly hurt by the law. The U.S. 10th Circuit Court of Appeals upheld that decision.

Kris W. Kobach, senior counsel of the Immigration Reform Law Institute, called Monday's ruling "superficial" and accused the California court of "bending over backwards to defeat the intent of Congress." He said high national interest in the subject might win the U.S. Supreme Court's attention.

But Ethan Schulman, who represented the University of California in the case, called the ruling "solid" and noted six of the seven justices on the state high court were appointed by Republican governors.

The UC Regents this week will consider a proposal to raise undergraduate fees by 8%, or $822, for next school year, to $11,124 annually. Last year, UC hiked its fees by 32%. Cal State trustees last week voted to increase tuition for all students 5% for the rest of this school year and an additional 10% for next year. Basic full-time undergraduate tuition next year will rise to $4,884.

Sofia Campos, 20, co-chairwoman of a UCLA organization that helps fellow undocumented students, called the ruling "a victory" but said she can barely get by even with in-state tuition. The fourth-year student, whose family is from Peru, said she had to drop out of school for a quarter to work and took low-cost community college courses at night so she would not fall behind.

If the court had overturned the law, immigrant students "would have been pushed out of higher education," the Eagle Rock resident said.