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Residency: Its Impact on Tuition Price and College Financial Aid

By Peterson's Staff updated on Wednesday, April 09, 2014

Let's say you live in Wisconsin but you want to go to school in Hawaii so you can work on your surfing skills. You went online to check out tuition and just about choked on your chicken nuggets when you saw the price tag. But you also noticed that all the island boys and girls could go to college in Hawaii for a significantly lower cost (even before college financial aid). No matter where you look, if you check out public institutions that aren't in Wisconsin, the price tag for you seems to always be way higher than it is for the natives. We're not talking pennies here, either -- we're talking thousands and thousands of dollars.

Ever wonder why that is?

It isn't because it costs more to provide an education to someone from Wisconsin, but there are legitimate reasons why public universities charge higher tuition to students from out of state.

Native sons and daughters catch a break - The unnamed financial aid package

It's pretty simple logic, actually. Public universities are just that -- public universities. A large chunk of the money they get each year for operating costs is paid by the taxpayers in the state where the college is located. Subsequently, students who are residents in that state get a cost break and students from out-of-state pay more since they are essentially subsidizing the in-state students.

The lower price tag for in-state students is attractive, which is exactly what the school wants it to be. Their investment in having in-state students is pretty high because they know that those students often stay in the state after graduation and help to boost the economy by matriculating into the population as educated taxpayers -- people who are more likely to have good jobs and pay money and contribute to the social and cultural climate of the state.

Reciprocity
In some cases, state schools will offer in-state prices to out-of-state students. Often, this happens when a certain program of study is not available in a given state and that state makes arrangements with the public schools of a neighboring state. It can also happen if a state has it as a priority to increase enrollment and wants to attract a broader range of students. For instance, South Dakota recently slashed tuition by almost half for all out-of-state students.

Interested? Check with your guidance counselor or reps from the schools on your list to learn more. It may be something of a long shot, but it could also turn a not-quite-affordable school option into one that won't break the bank (especially if you also factor in college financial aid).

Zip codes and taxes
If your parents live in the same state as your school and you're their dependent, you're set! However, if they live elsewhere, it takes a bit more than an in-state dorm address to establish residency. Requirements vary from state to state but generally, to be considered a resident of most states you must have lived in the state for at least a year prior to enrolling in school. Additionally, you have to relinquish your residency in other states and demonstrate your intent to continue living in your newly adopted one. Just going to school there and living on-campus won't accomplish this. You usually also need to demonstrate financial independence from your parents, so if they claim you on their taxes, you're not out of the woods.

You may become eligible for in-state tuition if you're a married undergrad or a graduate or professional student -- just so long as no one besides you claims you as a dependent on their tax return. Remember, of course, that there are variations to these requirements depending on the school and the state. Make sure you check to see if you qualify for residency and if you don't, what you can do to become eligible.

You got to move it, move it
Some students actually move to the state where they wish to attend school and live there long enough to establish residency prior to applying. Others may enroll as an out-of-state student and then work to establish residency during their first year or two.

Given that many state schools have excellent reputations and provide top-of-the-line educations, establishing residency to attend the school you're really hoping for may be a good idea, particularly if the difference in cost means the difference between attending or not. Keep in mind that your financial aid package may make a big difference as well, meaning that residency may not be as necessary as you might have thought. On the other hand, living in the state in which your college of choice exists may open up additional financial aid opportunities. Check with a financial aid counselor in the financial aid office of your target school. Living in-state may help you get a happy surprise when you receive your financial aid award letter!

About the Author

Peterson's has more than 40 years of experience in higher education, and the expert staff members here are all ready to leverage their considerable knowledge and experience to help you succeed on your educational journey. We have the information, the know-how, and the tools -- now all we need is you!

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