Replaces the existing 8 U.S.C. 1623 with a new section (labeled 505) that (1) defines terms; (2) makes aliens not lawfully admitted for permanent residence ineligible for any postsecondary education benefit (including in‑State tuition) and requires charging the out‑of‑State tuition rate; (3) requires verification of immigration status through the SAVE program prior to granting benefits and annually thereafter; (4) requires institutions to seek reimbursement from aliens for improperly provided in‑State tuition plus interest at the rate applicable to the Federal Direct Unsubsidized Stafford Loan and allows institutions to bar future enrollment until reimbursement is made; and (5) specifies applicability to enrollments on or after enactment and to certain previously enrolled students determined not lawfully admitted after post‑enactment verification.

Adds a new subsection (c) to section 400 of the Higher Education Act making a State that the Secretary determines violated section 505 of IIRIRA ineligible for any grant under chapter 2 of subpart 2, subpart 4, or subpart 6 for the fiscal year immediately following such determination.

Amends section 487(a) by adding a new required assurance (numbered 30) to program participation agreements that, in the case of a public institution, the institution will comply with the requirements of section 505 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996.