In the case of Toll, President, University of Maryland v. Moreno et al., 1978, the U.S Supreme Court ruled that a state university policy denying in-state tuition rates to non-citizen students residing in the state violated equal protection under the Fourteenth Amendment. The University of Maryland had implemented a policy where it denied lower in-state tuition fees to legal alien residents who were unable to prove their intent to permanently reside in the United States. This was challenged by several such students and their families on grounds that this discriminated against them based on their immigration status and thus violated their constitutional rights. The court held that while states have broad power over education policies including setting tuition rates, they cannot do so in ways which infringe upon constitutionally protected rights or principles without showing compelling reasons for doing so.

In the dissenting opinion for Toll v. Moreno, Justice Rehnquist disagreed with the majority's interpretation of federal law and its impact on state policy. He argued that Congress did not intend to prevent states from denying benefits to non-immigrant aliens when it passed immigration legislation. He also contended that Maryland's decision to deny in-state tuition rates to G-4 visa holders was a legitimate exercise of its power over education policy, which should be respected by the courts under principles of federalism. Furthermore, he believed that there was no evidence showing Congress intended these visa holders specifically have access to such benefits as lower tuition fees at public universities. Therefore, according to him, Maryland’s denial did not conflict with any clear objective or purpose of Congress regarding this category of aliens.