Everything You Need to Know About Out-of-State Tuition

What's in-state vs. out-of-state tuition? Why is out-of-state so much more expensive? And how can you receive the in-state price? Read on for all the answers!

What’s the difference between in-state and out-of-state tuition? Why is out-of-state so much more expensive? And how can you receive the in-state price? We have the answers to all those questions and more…

Many high school graduates are drawn to large state schools for their unparalleled resources and even more impressive national reputations. However, while many students believe “the bigger, the better” when it comes to colleges, those colleges also tend to follow the same motto when it comes to tuition for out-of-state students. 

If you’re interested in attending a school in a different state, you may find yourself disproportionately burdened by higher tuition rates simply because of your state of residence. But understanding the discrepancies between in-state and out-of-state tuition and learning the many ways to alleviate these burdens can assure that your education is determined by your best interests and not by your bank account. 

So, what’s in state vs. out of state?

First and foremost, these terms only apply to public universities, which rely on allocations of tax revenue from their states’ governments to subsidize their operations. This is one reason why public universities generally have lower tuition rates than private universities, which require their students to bear the entire brunt of the school’s expenses in their tuitions.

In-state tuition refers to the rate paid by students with a permanent residence in the state in which their university is located. Out-of-state tuition refers to the rate that students coming from outside the state, including international students, pay to attend a public state school. 

In-state tuition is typically much cheaper than out-of-state tuition. For example, The University of Texas at Austin’s School of Undergraduate Studies charges $5,624 per 12+ credit hours for state residents. For the same credits, out-of-state students pay $19,464—a difference of almost $14,000.

Why is out-of-state tuition so much more expensive?

Understanding the rationale universities use to differentiate between tuition costs makes the price tag a little easier to stomach. Out-of-state students pay more simply because they do not pay taxes to the state in which the university is located. In-state residents, on the other hand, have been supporting the state, and thus indirectly funding the university, all their lives. Thus, lower tuition costs are the state’s way of both rewarding its residents for their contributions and accounting for the tax dollars they have already paid to support their state’s schools.

When you take this factor into account, the gap between in-state and out-of-state tuition is not as big or unfair as it may appear. However, facing a school’s full out-of-state tuition bill can still be a hard pill to swallow for many families. Luckily, there are many ways for out-of-state students to avoid paying the sticker price.

How can I receive in-state tuition?

The best way to save the most on tuition as an out-of-state student is to, well, stop being considered an out-of-state student. This requires proving to your university you have become a resident of its state. After all, you’re going to be spending nine months of every year for the next four years in that state anyway, right? Convincing your school that you are a resident can be harder depending on your school and state, but these are the general requirements.

Most schools require the student or their custodial parent to reside in state for 12–24 months prior to enrollment. However, at many schools you can apply for a tuition change after every academic year. If you or a relative happen to own property in the university’s state, it wouldn’t hurt to claim that as an in-state residence or to claim a strong connection to that relative. Depending on the relative costs of tuition and property, it may even be worthwhile to invest in a residence in the state starting freshman year. This way, by sophomore year you have a state address to claim as your in-state residence. 

However, a state address is rarely enough to prove your residency. Here are some other documents and requirements you may have to produce to convince the school you have a genuine intent to reside in the state:

  • State driver’s license
  • State voter/car registration
  • State hunting/fishing license
  • State library card
  • In-state bank account
  • In-state employment

Because of the many requirements in this strenuous process, it is often not worth the effort to attempt to skirt the rules or disingenuously claim residency. The easiest way to take this route is to do it fully and genuinely by permanently moving to the state even before you enroll as a freshman. This is a bold move for many students, but it could also mean saving more than $10,000 a year. It may just make financial sense.

What else can I do to save on out-of-state schools?

For students who don’t see themselves getting up and moving across the country anytime soon, luckily there are many other options for reducing your tuition without packing your boxes. 

Out-of-state scholarships

Because schools look so fondly on out-of-state applicants, out-of-state scholarships are abundant and diverse.

Louisiana State University and the University of Alabama, for example, offer scholarships available exclusively to out-of-state students. LSU’s Tiger Nation Scholarship offers $3,355 a year to out-of-staters with a minimum 3.0 GPA, and Alabama offers more than six similar merit scholarships solely for out-of-state applicants.

I was offered a $10,000 scholarship from Mizzou simply because I was an out-of-state applicant in the top 25% of my class. These scholarships are beneficial to out-of-staters because out-of-state applicants only compete for them against other out-of-staters. The competition pool is much smaller, so they are easier to earn. 

Almost all schools offer out-of-state scholarships that are relatively easy to win—some are even awarded automatically. So rest assured that even though out-of-state tuition may be greater, you will rarely pay the full sticker price.

Reciprocity agreements

Even though you may not qualify for in-state benefits, you may still receive in-region benefits, so to speak. Reciprocity agreements refer to agreements made by neighboring or nearby states to offer breaks in tuition to each other’s residents.

While there are many different reciprocity agreements between states and even between individual universities, there are four main regions that offer substantial reciprocity agreements. Not many students take advantage of them, however, so simply knowing about them is a good start to potentially saving thousands of dollars.

  • Northeast: The New England Board of Higher Education started a Regional Student Program between Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. This agreement allows students from these New England states to attend a participating public university in another state at a reduced cost. Participating students save an average of $7,000.
  • West: The Western Undergraduate Exchange is a similar yet heavily restricted and exclusive reciprocity agreement that allows students from specified Western states to attend out-of-state universities for 150% of the price of in-state tuition.
  • Midwest: The Midwest Student Exchange Program provides the same “1.5x in-state tuition” to Midwestern residents.
  • South: The Academic Common Market provides tuition breaks to residents of some Southern states, but with considerable restrictions. Most notably, one prerequisite states that the degree a student is seeking cannot be offered by the student’s in-state institution. Also, the Great State of Texas does not even participate. 

Reciprocity agreements are as complicated as they are plentiful, and most of the broadly available deals are heavily restricted and offer comparatively minimal benefits. However, if you are one of the lucky students who can satisfy all of your region’s requirements, they are easy ways to automatically strike a few thousand dollars off your bill.

The most beneficial reciprocity agreements are often between individual universities. For example, I have a friend attending Trinity University for free because her father is a professor at Rice University. Other universities have similar deals for parents who work in government, the military, or other universities. Be sure to research your specific university to see what hidden money may be available to you.

Tuition waivers

Tuition waivers are similar to scholarships but are awarded on the basis of need or gratitude rather than academic merit or athleticism.

Most tuition waivers are doled out based on financial need. Many of the best, and priciest, colleges in the nation give generous tuition waivers to low-income families. Texas A&M University, for example, grants full rides to students from families that earn less than $60,000 a year. Your university undoubtedly offers similar assistance.

Other popular waivers are given to families with public service or military backgrounds. UT Austin, for example, waives out-of-state tuition for veterans and their families. Most universities offer similar benefits in gratitude to family members of police officers, fire fighters, teachers, and other altruistic professions. You may also receive a waiver as a first-generation college student, recent immigrant, Native American, adopted or fostered child, or an unemployed adult. 

Does applying as an out-of-state student affect admission chances?

While everything depends on the specific state and school, out-of-state students often carry considerable benefits in the admission process at many of the best public universities. 

Higher tuition should not be interpreted to mean that universities are shunning out-of-state students because they are somehow a burden to the school or they don’t fly the same flag. In fact, universities have many incentives to accept high numbers of out-of-state students. Because they pay more tuition, they are, quite frankly, moneymakers for the universities.

Some of the best public universities in the country have received flack this year specifically for this reason. The University of California system, for example, came under fire this year for admitting a disproportionate amount of out-of-state students. The President of the University of California defended this behavior by asserting that out-of-state students contributed $728 million to the state’s universities. For this reason, more than 20% of the undergraduate populations at UCLA and UC Berkeley are made up of out-of-state students.

In this way, out-of-state students arguably benefit from their non-resident status in the sense that some elite schools show favor toward their applications. 

This being said, not all state schools follow these same policies. Remember that while UT charges out-of-state students over three times as much, their out-of-state population is only 7%. Also, it is likely that UC’s admission discrepancies will be curtailed by the government in the future.

To get a better idea of how out-of-state students are treated by your school’s admission department, research the percentages of their undergraduate populations that come from out of state and what financial benefits they offer exclusively to out-of-state students. 

Where should I go: in state or out of state?

You should always prioritize compatibility over location in your college search. The United States is home to thousands of universities, so the best school for you may not be in your home state. But there are many ways to not let your wallet get in the way when choosing your best-fit college. Hopefully these tips will help make your far-away dream school a reality!

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