The Sixth Circuit Court of Appeals upheld the Obama administration's refusal to grant asylum to the Romeike family.
U.S. Attorney General Eric Holder filed against the family, arguing that asylum should not be granted because home schooling isn't a fundamental right protected under religious freedom.
The Romeikes fled Germany in 2008 facing criminal prosecution for home schooling. In 2010, they were granted political asylum by immigration Judge Lawrence Burman, but his decision was overturned by the Board of Immigration Appeals last year.
On Tuesday, the three-judge panel of the Sixth Circuit issued a unanimous decision against the family.
Uwe and Hannelore Romeike began home schooling in Germany because they didn't want their children exposed to things like witchcraft and graphic sex education that are taught in German schools.
"There were stories where they were encouraged to ask the devil for help instead of God and actually the devil would help [in the story]," Uwe Romeike told CBN News.
"When we found out what's in the textbooks, it's exactly the opposite from what the Bible tells us and teaches us and we wanted to protect them," his wife, Hannelore, explained.
While the Sixth Circuit did acknowledge that the U.S. Constitution recognizes the rights of parents to home school, it refused to grant that what the German home-schoolers face amounts to persecution deserving of asylum.
Michael Farris of Home School Legal Defense Association said, "We believe the Sixth Circuit is wrong, and we will appeal their decision."
The Romeikes told CBN News they're disappointed but said, "God is in control." They know what they face in Germany if they are deported.
"First they would fine us with increasingly high fines and they would threaten to take away custody," Romeike said. "There might be jail time too, but the main threat is the aspect of custody because then of course the children are taken away from you completely and that's what no family wants."