What Are the Cost Differences Between In-State and Out-of-State Colleges?

The cost differences between in-state and out-of-state colleges can determine your college application process. When tuition, fees, and additional expenses like housing are factored in, out-of-state students tend to spend thousands more each semester than in-state students. In fact, the average cost is more than $10,000 more annually for out-of-state students.

Knowing your costs can help your child choose the right schools when applying so they only look at schools they know they can afford. Use this guide to better understand the costs of in-state and out-of-state schools.

The Difference Between in-State College & Out-of-State College

According to CollegeBoard, the average cost for a year of out-of-state tuition and fees is $23,890 annually, while the average cost of in-state tuition is $9,410. This is where the estimated gap of $10,000 comes from.

Many public state schools are funded by local taxpayers. This means parents and kids who work before entering college essentially pay to keep the university open each year before they enroll. Out-of-state students don’t pay taxes to that state, which means they aren’t entitled to the benefits of reduced costs.

Some students can apply for in-state tuition if they prove they have moved to the state. This typically involves proving you have resided in the state for at least 12 months, changing your driver’s license to match the state, opening local bank accounts, and otherwise proving you plan to live there. Once students start filing local state taxes, they can start receiving in-state benefits.

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Budgeting for a Two-Year vs. Four-Year College

It’s important for parents and students to realize that not all in-state tuition costs are the same. Most four-year schools cost more than two-year schools because they tend to have larger infrastructures. They might have more students, larger campuses, and additional expenses like stadiums, dorms, and dining halls.

In fact, according to the same CollegeBoard study mentioned earlier, the average annual cost of a two-year college for students is $3,440 for in-district students. This is one-third of what students can expect to pay for a four-year university. Even if your child moves to a different city to attend college, you might be able to save if they enroll in a two-year program and then transfer to finish their four-year degree.

Average Private Tuition Costs

The average annual cost of attending private schools typically exceeds $30,000. These schools don’t receive the same tax benefits from the state, which means they can charge more. However, private schools might be more likely to accept out-of-state students because every student pays the same price to attend.

While financial aid is limited for private schools, it’s still possible to reduce the average college cost with scholarships and by saving on housing if you live nearby. Knowing which schools in your area are private versus public can help you determine whether you want to apply to them or not.

Additional Costs to Consider

Even if you think you can afford an in-state school, there are additional costs to consider before you apply. For example, every school has different housing policies, options, and costs. Students might have to live on campus their first year, or the cost of living in that area could be significantly higher. The benefits of in-state tuition could be diminished by the costs of living on campus or in that town.

Some students narrow their search to colleges they can commute to while living at home. They might attend a four-year college nearby and stay with their parents (saving on rent and food costs) until their junior or senior years. Parents and students should look at the entire price tag of attending college, not just the base tuition costs.

Reducing Costs With Financial Aid

Even parents who think they make too much to qualify for financial aid might receive benefits if their child attends in-state or out-of-state schools. Between academic scholarships and federal student aid, few students actually pay the full ticket price of attending a university. By knowing your options and applying for as many benefits as possible, seemingly expensive schools can become more affordable. This is a relief for parents who might feel overwhelmed by a tuition bill and exciting for students who want to attend their dream schools.

The differences between in-state and out-of-state tuition can seem overwhelming, but knowing your options can prepare you to apply to the best schools for your needs. Schools that seem out of reach could become serious contenders if you budget correctly and have a clear idea of your total costs.