Is Out-of-State Tuition Going Out the Door?

College tuition these days can be expensive. This is especially the case for students who attend private schools or out-of-state public schools. While the cost of attending a private institution shows no signs of decreasing in the near future, recent developments in New York state suggest paying costly out-of-state tuition for public universities may be a thing of the past.

The History of Out-of-State Tuition

It should come as no surprise that attending a public university in your home state can be a great way to save on college tuition. Unfortunately, this is not the case for out-of-state students, who often end up paying nearly three times as much to attend the same university. This is because tuition to most public universities is subsidized by state tax dollars paid by the state’s own residents. Since out-of-state students and their parents only pay taxes in their own states, they are not eligible for these generous subsidies in other states.

This has become a major issue recently, especially as public funding continues to short change state university systems throughout the United States. In order to maintain the subsidies afforded to resident students, state universities often make up funding gaps by raising tuition on out-of-state students. This has led to significant backlash from students paying these high rates, many of whom had chosen to pursue their higher education in other states due to limited options within their own state. For more information on how out-of-state tuition works, this article posted by The Economist in 2009 provides some additional background.

Out-of-State Tuition by the Numbers

While paying out-of-state tuition can be pricey, the cost is often comparable to attending an unsubsidized, private university. That said, the significant difference in tuition costs that resident and nonresident students pay might surprise many.

For instance, the University of California at Berkeley currently assesses a $12,876 tuition fee for residents of the State of California for the 2012-2013 school year. Out-of-state residents are required to pay $22,878 in supplementary tuition and fees in addition to the standard tuition fee paid by residents. If one compares this total out-of-state tuition cost of $35,754 with the cost of tuition at Harvard, which is currently set at $37,576, there really is very little difference between the two in terms of cost. With these figures in mind, it is no surprise that many students doubt the value of attending a public university in another state.

Not all students are required to pay out-of-state tuition, even if they do happen to be residents of another state. Some state universities offer nonresident tuition waivers for top performing students in order to attract the best and the brightest talent from around the country. Students who live in counties or regions that border another state can often lobby to pay resident tuition within that state. For additional information and tips on how students can get around the cost of out-of-state tuition, this article posted at Bankrate.com is an excellent resource.

The New York Proposal

New York has become one of the first states in the U.S. to draft a proposal that would essentially do away with costly regulations and tuition expenses paid by out-of-state students. The proposal resulted from the many regulatory issues that complicate the ability of universities in New York to provide online courses to students who live outside of the state. As of today, these students would have to pay significantly more to take the same online courses available to residents of New York. This is largely due to the costly web of regulations that these universities must navigate in order to offer online courses in other states.

The growing popularity of massively open online courses (or MOOCs) spurred former Secretary of Education, Richard W. Reilly, to propose a major overhaul of current laws that regulate interstate education. The goal of this proposal would be to provide residents of the 50 states access to a richer variety online education options at a cost that is both fair and reasonable. An immediate drawback to this proposal, however, would be the revenue many states would lose upon simplifying these regulations. In order to make up for this lost revenue, tuition expenses may rise across the board for all students instead of just a select group.

As state universities continue to offer more and more courses online, the need for a fairer and more simplified approach to assessing tuition for nonresident students will only get stronger. Today, out-of-state students often pay several times more than resident students for the same access to courses available both online and on-campus. The recent New York proposal to overhaul interstate education regulations promises to level the playing field when it comes to the amount of tuition paid by U.S. citizens for their higher education. This promises to be a great first step as fair access to quality education continues to expand beyond state borders.