A federal judge could soon decide whether tens of thousands of so-called “Dreamers” in Texas could lose their ability to work in the US legally under the Deferred Action for Childhood Arrivals (Daca) immigration program – prompting fears of upheaval and heartbreak.

As part of the years-long legal battle over Daca, US district court judge Andrew Hanen is set to rule on competing proposals for the future of the Obama-era program. One of those proposals, submitted by the Trump administration, would make Daca recipients in Texas, in particular, ineligible for the work permits typically offered by the policy.

Created in 2012, Daca currently provides deportation protections and work permits to more than 500,000 immigrants who, as children, entered the US without permission or overstayed their visas. To qualify, they all had to have arrived before 2007, attend an American high school or enlist in the military, and pass background checks.

The average age of those enrolled in Daca is now 31. After California, Texas is the home to the second largest Daca population in the country, with 86,000 recipients living there.

But what has remained a lifeline for an entire generation of young adults – in the absence of Congress being willing to pass legislation to embed the protections in law – many of whom are now raising families and building professional careers, continues to be in legal peril, especially in Texas.

Protesters gather at Ervan Chew Park in Houston, Texas, in June for a demonstration against Trump immigration policies and mass deportations. Photograph: NurPhoto/Getty Images

If Hanen approves the federal government’s plan, Daca recipients in Texas would lose their income, career opportunities and financial support, pushing them towards the shadows or out of the state. And those who move to Texas from other states could also see their Daca work permits revoked.

“It would be heartbreaking having to leave my family’s dream, my dream, everything I worked for,” said Laura Alguera, who was born in Mexico City in 1990 and came to the US at four.

“Thanks to Daca I’m a licensed cosmetologist and was able to open my own salon. How am I going to explain it to my clients, whom I have built relationships with? If I have to go to another state it would feel like I’m escaping.”

The Daca program has survived years of uncertainty. During Donald Trump’s first term, his administration tried to terminate Daca, declaring it an illegal program. But its effort was blocked, ultimately by the US supreme court, which in 2020 halted the termination on technical grounds.

But it’s currently threatened by a lawsuit filed by Republican-led states, led by Texas, that argue the policy is an overreach of executive authority.

Hanen, a federal judge in Texas, and the fifth circuit court of appeals have sided with the GOP-controlled states in recent years, finding that Daca is unlawful. The courts have so far allowed the program to continue for current recipients, closing it only to new applicants.

In its latest ruling in January, the fifth circuit agreed with Hanen that Daca is unlawful, but narrowed the impact of the order to Texas, saying the state proved it was harmed by the policy due to the costs of providing services to Dreamers.

To comply with the circuit’s order, the Trump administration submitted a proposal saying US Citizenship and Immigration Services (USCIS) had developed plans to reopen Daca to new applicants in all states except Texas.

Daca has been closed to new applications since 2021 due to litigation, but those enrolled continued to renew their two-year work authorizations.

The administration’s proposal also calls for the revocation of Daca work permits in Texas, where the program’s recipients would only be eligible for deportation deferrals.

The federal government and attorneys defending Daca had opportunities to file responses to the proposal until late October.

Hanen is now reviewing the proposals submitted by the parties, which also include a request from nine Republican-led states for Daca to be completely shut down over a certain period. Hanen’s final decision is expected to be announced soon.

Thomas Saenz, president of the Mexican American Legal Defense and Educational Fund, which is representing Daca recipients in the federal court case, said in an interview with the Guardian that the potential termination of work permits for those in Texas would, far from saving the state money, hurt the state’s economy.

“Texas would suffer because all their highly qualified Daca recipients would choose to move elsewhere,” said Saenz, adding: “But those are the consequences of Texas deciding to entertain a challenge to Daca when, in reality, it benefits from it.”

According to a report by the American Immigration Council, more than 221,000 Texans are eligible for Daca and 97% of them are employed. Nearly 19,000 are described as entrepreneurs.

Alguera, a 32-year old mother, is a salon owner in Houston, where she lives. She and all Daca recipients in Texas pay more than $830m in state and local taxes each year, according to the American Immigration Council.

“How many years have we been following the rules, paying our taxes and we are still in this limbo? Every two years it feels like someone is playing with our feelings,” she said.

At the national level, as employers and employees, Daca recipients have contributed nearly $2.1bn each year to social security and Medicare, programs that benefit all Americans, according to a recent survey.

Since the turn of the century, lawmakers have introduced at least 20 versions of the “Dream Act”, which would place Dreamers on a path to US citizenship. Despite garnering bipartisan support, the proposals have all died in Congress.

In 2001, under Republican governance, Texas became the first state to give undocumented immigrants access to in-state tuition places at public colleges and universities, through the Texas Dream Act.

Half the states in the nation followed suit. However, the Texas law those measures were modeled on is no longer in effect.

In June, the Trump administration sued Texas over the Texas Dream Act and state officials, instead of defending it, joined the justice department in asking a federal judge to strike down the law. The federal judge agreed.

The Texas department of public safety recently suspended the issuance of commercial driver’s licenses to non-citizens, including Daca recipients. The agency then enforced English proficiency requirements for commercial drivers.

“Every commercial driver license operator on Texas roadways must be able to communicate clearly in English to ensure compliance with traffic laws, follow safety directions, and prevent accidents,” said the state governor, Greg Abbott.

Immigration rights groups are urging Daca recipients to wait for Hanen’s decision about the program’s future before taking any action.

Beyond the more than half a million people across America already enrolled in Daca, about 1.1 million people may be eligible for the policy, according to the Migration Policy Institute, including an estimated 221,000 Texans.

Since Trump returned to the White House, his administration has aggressively expanded immigration raids across the country, granting deportation agents a broad mandate to target those in the country without proper documents.

Among those affected by the crackdown have been some Daca recipients, despite their protection from deportation.