The 30-29 vote was short of the 32 votes needed to pass, a rare defeat for a bill on the floor of the Senate. There are 63 seats, two are vacant, and two senators did not vote.
The Western New York delegation voted along party lines: Tim Kennedy voted yes, while all five Republicans (Gallivan, Grisanti, Maziarz, Ranzenhofer, Young) voted no.
The Senate's ruling coalition of Republicans and breakaway Democrats brought the closely watched bill to the floor late in the day with little notice. Supporters of the measure said that was intentional.
"It certainly seems that it was bought up to fail, given the outcome," said Sen. Michael Gianaris, a Queens Democrat. He said the vote "made a mockery of a very important issue."
No Republicans voted for the measure, though all five of their coalition partners in the Independent Democratic Conference voted for it. All but one of the mainline Democrats in the minority voted for the measure.
The proposal includes a budget appropriation of $25 million to open up Tuition Assistance Program money for students who are in the country illegally but attend public or private colleges, paying up to $5,000 a year for undergraduates at four-year institutions.
Exactly how many would be eligible for the need-based assistance is unclear, but according to a report issued by state Comptroller Thomas DiNapoli, 8,300 such students in the CUNY and SUNY systems would qualify.
Since it was first introduced three years ago, opponents have argued that using taxpayer money to fund tuition assistance for people in the country illegally takes opportunity and funds away from students who are citizens. New York is among 16 states that already allow those students to pay in-state tuition at public colleges.
The Assembly passed the Dream Act last month. After the vote, Gov. Andrew Cuomo, who has indicated support for the bill, released a statement saying he was disappointed that the Senate had failed to pass the measure.
Opponents said the bill amounted to an improper use of taxpayer funds.
"I simply cannot justify spending tens of millions of taxpayer dollars annually to pay for tuition for illegal immigrants when so many law-abiding families are struggling to meet the ever-increasing costs of higher education for their own children," said Sen. Mark Grisanti, a Republican from the Buffalo area.
Sen. Ted O'Brien, a Democrat from the Rochester area, was the only member in his conference to vote no on the bill. Advocates had looked across the aisle to Long Island Republican Sens. Jack Martins and Phil Boyle, both with a sizable Hispanic constituency. Martins voted against the bill and Boyle was not present to vote.
After the vote, Sen. Jeff Klein, co-sponsor of the bill and co-president of the chamber, said he was disappointed in the outcome.
"I think it's very difficult to not have a united Democratic conference, all Democrats, IDC and regular Democrats on such an important issue and then expect Republicans to support that piece of legislation," Klein said.
Texas, New Mexico, California and Washington state allow students who are in the country illegally access to state financial aid.