Incorrect. He is giving them special privileges over US citizens.
The parents are here illegally; hence, the children are also illegal residents of Texas.
Now, if my daughters or sons moved to Texas and tried to use their "illegal" residency status (they haven't been in TX long enough to be fit the legal "Texas resident" definition), they would be refused in-state tuition status.
What's the difference? Both the non-US-citizen, illegal alien and the US citizen, non-TX-resident are doing something illegal.
But the illegal alien kids get in-state tuition and the US citizen kids don't.
That's preferential treatment for the illegal alien, no matter how you spin it.
If your kids lived in Texas for 3 years, they qualify.