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Why Do Colleges Charge More for Out-of-State Students?

The decision on which college to attend has far-reaching consequences for any student. According to a 2015 survey, 63% of students considered cost as the most significant deciding factor when choosing a college. Trends indicate that most students are willing to enroll in colleges outside their state despite the greater cost implications of out-of-state tuition.

Colleges charge more for out-of-state students because they’re funded by taxes paid by state residents. As a result, students who are residents of the state have the right to attend public colleges within their state at a lower cost than students from outside the state. 

This article will look into the differences in price between in-state and out-of-state colleges and the various options available to cushion the cost of attending college as an out-of-state student.

Understanding The Cause For Higher Out Of State Tuition

The education system in the United States is decentralized, meaning public schools aren’t run by the federal (central) government. Rather, they’re run by the state government, which means that each state is individually responsible for managing and funding its public schools.

As of 2020, revenue for public four-year colleges and community colleges came mainly from state government funding, which is largely constituted by taxes paid by state residents. 

Sources: Education USA and Ithaka S+R

Why out-of-state tuition costs more.

What Is an In-State Student and Out-of-State Student?

An in-state student is a learner who’s enrolled at a college within the state in which they’re a permanent resident. An out-of-state student is a learner who isn’t a permanent resident of the state in which they’re attending college. 

How Much More Does It Cost To Go to College Out-of-State?

Tuition rates vary across different institutions, so the cost difference between in-state and out-of-state tuition depends on a student’s individual school choice. 

On average, an out-of-state student paid an average of $39,510 for the 2021/2022 academic year. In comparison, it cost $22,690 to attend a public four-year college as an in-state student, which is a difference of $16,820.

Over the course of a four-year undergraduate program, this means that a student could potentially pay almost $68,000 more to attend a public college outside their state (source).

The Best States for Out-of-State Tuition

For the academic year 2021/2022, South Dakota had the lowest average out-of-state tuition costs for public colleges. North Dakota came second, and Louisiana ranked third. 

The table below lists the top five states with the highest and lowest average out-of-state tuition costs for the 2021/2022 academic year (source). 

States with the highest average cost for out-of-state tuitionStates with the lowest average cost for out-of-state tuition
Vermont ($41,930)South Dakota ($12,480)
Michigan ($38,710)North Dakota ($14,260)
Virginia ($35,650)Louisiana ($19,950)
Connecticut ($34,670)Wyoming ($20,650)
Oregon ($34,380)New York ($21,040)

How Can a Student Qualify for In-State Tuition?

Attending a public university outside the state doesn’t necessarily mean paying more. Proof of residency, reciprocity programs, and legacy scholarships are just some of the ways that out-of-state students can qualify for in-state tuition.

Proof of Residency

By becoming a resident of the state that they wish to attend a public university in, an out-of-state student can qualify for in-state tuition. 

However, some states may not grant residency if the student is relocating just to attend college. 

Some schools also require that the student has been a state resident for more than one year, which is verifiable by documents such as car and voter registration and conversion of driver’s license (source).

Reciprocity Programs

Reciprocity programs are like an exchange agreement, where participating states allow non-resident students to pay in-state tuition. 

For example, through the Western Undergraduate Exchange, students from California can attend public universities in Alaska, Hawaii, Nevada, South Dakota, and other western states at a significantly reduced cost (source).

Students have the opportunity to benefit immensely from such agreements, with some schools lowering their out-of-state tuition rates by as much as half (source).

Other such reciprocity programs include: 

Legacy Scholarships

A legacy scholarship gives a discounted tuition rate to a student attending the same college that their parent or grandparent graduated from, even if the student is from outside the state. Each school has its own eligibility criteria for legacy scholarships, but the student is often required to meet a certain GPA to qualify for the scholarship (source).

Do Private Colleges Charge More for Out-of-State Students?

Private colleges don’t distinguish between in-state and out-of-state students because they’re not run or funded by the state government. Private universities charge a standard tuition rate, no matter where a student is from. 

Private college tuition usually costs more than public one. 

The typical private school student paid $53,949 for the 2021/2022 academic year, which exceeded the average out-of-state tuition cost for a state college in the same period.

Sources: George Washington University and Education Data Initiative

Does Out-of-State Tuition Apply to International Students?

Because they’re not residents of any state, the out-of-state tuition cost normally applies to international students. However, this is up to the discretion of individual schools. Some colleges charge international students slightly more. 

In contrast, others considerably reduce tuition amounts for students from other countries to below the out-of-state rate by offering scholarships and grants (source).

Conclusion

Deciding which college to attend requires a lot of careful thought, especially where finances are concerned. The cost difference between in-state and out-of-state tuition can significantly influence a student’s college choice. With careful consideration and research, students can find ways to substantially lower the cost of attending college if they choose to go out of state.

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