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In-State Tuition: A Look at Establishing Residency

By Kayla McCormack · October 21, 2021 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

In-State Tuition: A Look at Establishing Residency

If you’re attending a public university that is not in your home state, establishing residency could help reduce the tuition bill. Though, establishing residency for the sole purpose of qualifying for in-state tuition can be very difficult.

Qualifying for in-state tuition can mean significant savings. According to the College Board , the average out-of-state tuition in the 2020 to 2021 school year was $27,020, whereas for the average in-state tuition the same year was $10,560.

Establishing Residency

Each state has their own requirements for establishing residency. Requirements can also vary based on the university, which can add confusion to the process. Here are some of the general requirements that states and universities usually require to determine residency:

•   Physical Presence. Most states need you to be a resident for 12 consecutive months before you qualify for in-state tuition. The time to establish residency could be more or less, depending on the state.

•   Intent. Students must prove that they are living in a state for more reasons than just attending school.

•   Financial Independence. Typically, students must prove they are financially independent in some way.

3 Tips for Establishing Residency

Establishing residency can be difficult, but with these tips and a little legwork, you may figure out how to become a resident of the state of your choosing, and as a result, possibly reduce your tuition bill.

1. Consider Relocation…Like Yesterday

Since most states require you to be a resident for 12 consecutive months, it makes sense to relocate as soon as you can. If you are currently enrolled in a school, and are hoping to establish residency, this could mean spending your summers on-campus or at the very least in that state.

You’ll generally have to cut ties to your home state too. This means things like changing voter registration, renting or buying property, and paying income taxes in your new state.

2. Boost Your Reasons for Moving

You’ll need to prove the reason you moved to the state wasn’t solely for getting in-state tuition.

There are a few things you can do to help prove intent:

•   get a new driver’s license

•   register a vehicle

•   get a state hunting and/or fishing license

•   open a local bank account

•   get a local library card

On the other hand, having any of these things in your old state may make it more difficult to establish residency in your new state.

3. You May Have to Distance Yourself from Your Parents

One of the requirements for establishing residency is financial independence. This can make establishing residency extremely difficult for students between the ages of 18 and 22 who are planning on heading to college right after high school. Becoming an independent student before the age of 24 is challenging, both logistically and emotionally.

You may become an independent student before then if:

•   you are married

•   you are a veteran

•   you have dependents of your own

•   you are a legally emancipated minor

If you are a dependent student , it’s worth weighing the pros and cons of establishing residency on your own. It could mean delaying graduation and paying for college without any help from your family.

Alternatives to Establishing Residency

Establishing residency in a new state isn’t always the only option for getting in-state tuition. For some students, it can pay to go to school close to home — even if it’s out of their home state. Some states participate in regional reciprocity agreements that let students attend colleges in bordering states at a discount.

Here are a few examples:

1. New England Regional Student Program

Run by the New England Board of Higher Education, this program allows New England residents to enroll in out-of-state New England public colleges and universities at a discount. To be eligible for the program, students must enroll in an approved major that is not offered by the public colleges and universities in their home state.

This program includes six states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.

2. Midwest Student Exchange Program

Through the MSEP , public institutions agree to charge students no more than 150% of the in-state resident tuition rate for specific programs. Some private colleges and universities offer a 10% reduction on their tuition rates.

Participating states include: Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, and Wisconsin. You can use its database to find colleges and universities participating in the program.

3. Southern Regional Education Board’s Academic Common Market

This program is similar to the New England Regional Student Program. It provides tuition-savings to students in the 16 SREB states who are interested in pursuing degrees that are not offered by their in-state institutions. Students are able to enroll in out-of-state institutions that offer their degree program, but they pay the in-state tuition rate.

Participating states include: Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. You can use its database to find participating institutions.

4. Western Undergraduate Exchange

The Western Undergraduate Exchange is open to students from any of the 16 states that participate in the Western Interstate Commission for Higher Education (WICHE). The program allows students to enroll as nonresidents in more than 160 participating public colleges and universities and pay 150% (or less) of the enrolling school’s resident tuition.

Participating states and territories include: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, U.S. Pacific Territories and Freely Associated States, Utah, Washington, and Wyoming.

5. Exceptions for Students without Residency

Sometimes, residency rules are waived or are more lenient for students with special circumstances, including, veterans or the children of military personnel.

There is no single database of these exceptions, so if you think you may qualify for one, check with the colleges you are interested in to see whether there are any exceptions and how you can apply for them.

Types of Student Loans to Help Students Pay for College

Even if you’re able to establish residency in a new state and qualify for in-state tuition, you still may need help paying for college. Scholarships, grants, and work-study are generally aid that is not required to be repaid, which can be incredibly helpful. Beyond that, student loans are also an option. There are two major categories for student loans: federal and private.

Federal Student Loans for Undergraduate Students

Federal student loans are funded by the U.S. government and are subject to a set of standard rules and regulations. The interest rate on federal loans is fixed, which means it remains the same over the life of the loan. These interest rates are set annually by Congress.

Generally, there are two main types of federal student loans that may be available to undergraduate students — Direct Subsidized or Direct Unsubsidized Loans.

Recommended: Comparing Subsidized vs. Unsubsidized Student Loans

Direct Subsidized student loans are awarded based on financial need. The interest on these loans is paid for (or subsidized) by the U.S. Department of Education during the following periods:

•   While the student is enrolled in school at least half-time,

•   During the loan’s grace period, which is usually the first six months after the borrower graduates or drops below half-time enrollment,

•   And, during qualifying periods of deferment, which is a period of time when loan payments are paused.

Borrowers with unsubsidized loans are responsible for all of the interest that accrues on the loan, even while they are attending school.

To apply for a federal student loan, students must fill out the Free Application for Federal Student Aid (FAFSA®). Students interested in receiving financial aid must submit the FAFSA each year.

Private Student Loans

Private student loans are borrowed directly from private lenders like banks or other financial institutions. These loans may have fixed or variable interest rates. Unlike the federal student loans available to undergraduate students, which do not require a credit check, private lenders will generally review a borrower’s credit history, among other factors, when making their lending decisions.

In most cases, private student loans are considered only after all other resources and aid options have been evaluated. This is because private lenders do not offer the same protections — such as income-driven repayment plans — to borrowers.

The Takeaway

Establishing residency can help a student qualify for in-state tuition, which could lead to serious savings in tuition costs. But, as noted earlier, establishing residency for the purpose of qualifying for in-state tuition, especially as a dependent student, can be extremely challenging. Some states have reciprocity agreements with other states, which could be one alternative to look into.

Students who need help paying for college after factoring federal financial aid, including federal student loans may be interested in considering private student loans. SoFi offers student loans with no fees and the option to choose between four repayment plans.

Learn more about using a SoFi private student loan to pay for college.


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