Tuition Hack: Little-Known Ways to Pay In-State Tuition Rates at Out-of-State Colleges When All Else Fails And You Get Zero Financial Aid

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Are your clients looking to go to a college out-of-state for in-state costs?

A public college in another state costs 2-3 times for out-of-state students compared to the in-state prices. Being considered an in-state student will make those out-of-state schools more affordable. 

If the student can establish in-state residency, the cost of college can be reduced by eliminating the out-of-state tuition. In many states, out-of-state tuition can double or triple the cost of attendance.

The four basic elements used to determine residency are:

  1. Duration requirement
  2. Financial independence
  3. Proof of residency
  4. Non-academic purpose

Note: The student cannot be listed as a dependent on the parent’s tax return.

Duration Requirement

The standard duration requirement for residency is usually 12 months. The student is required to maintain a “continuous presence” in the state for a period of 12 months. Unless the student takes a full year off from college, in-state status normally will begin with the second (sophomore) year. The student must complete this mandatory requirement prior to obtaining the benefits of in-state tuition. This rule is used to determine students’ true fixed intention regarding their permanent place of residency.

Financial Independence

Financial independence is another mandatory requirement. Again, it is important to correspond with school officials to determine the specific rules regarding financial independence at a specific school. They will look at a student’s specific employment situation in order to determine whether or not the student is truly independent of the parents or legal guardian.

Financial independence requires that a student cannot receive more than 50 percent of the income from an out-of-state source. Students must show that they can support themselves, make their own decisions and establish residency all on their own. Schools will look for "state sources of income" from employment of at least 50%. If the student is receiving significant support and income from a source outside of the state, the school will view this as a reason to support a denial for residency.

Proof of Residency

Establishing state residency is a matter of providing evidence as proof. The eight major elements used to determine residency are:

  1. Ownership of residence
  2. Full-time employment
  3. Type of employment
  4. Professional licensing
  5. State sources of income
  6. Payment of state income tax
  7. Personal property owned within the state
  8. Aid received from other states

Ownership of residence

Ownership of a home or residence provides strong proof of residency, especially in a state where a student already has relatives and friends. Home ownership is an important factor in these states, which make it difficult for students to achieve in-state residency. However, most schools do not require home ownership but consider it a major benefit if the student does own a home. In these cases, the student should at least establish a year-round lease or rental agreement. 

Full-time employment is one of the best ways to establish residency and take away the school's subjective discretion. Full-time employment for 12 months is something the student should undertake to ensure in-state residency and tuition reclassification.

Ideally, the students should enter the field or type of employment that follows their basic course of study at the school, or is viewed as career employment. Part-time employment, in a job normally associated with students, allows the school the argument that the student is in the state only to receive an education.

Colleges and universities put great emphasis upon obtaining a professional license (real estate, insurance, brokers, etc.) from their specific state, and individuals obtaining such a professional license have a much stronger case to argue residency.

The student’s source of income is an important factor and is frequently used by schools to deny residency. Be sure to check the state’s requirements regarding “sources of income”, as this may be a strategic requirement. If a gift is made to the student and the amount is sufficiently large, a school may interpret this gift as an attempt on the parent's part to support the student and thereby deny residency.

Students should file the respective state’s income tax return, including state tax paid on any out-of-state income. Many schools place great emphasis on this requirement and view this as a strategic choice of state for residency.

Proof that the student has moved all personal belongings makes a strong case for in-state residency. A receipt slip from a public storage facility should provide significant evidence of this factor.

Students must make every effort to obtain all support and income from the state in which they seek residency. Parents should not be co-borrowers on student loans; however, in most cases, they can be a guarantor of the loan.

Non-academic Reasons for Coming to the State

Students should show non-academic reasons for their presence in a state. The best way to accomplish this is full-time employment and part-time course load while establishing the 12-month duration requirement. Students should also emphasize their non-educational activities, such as full-time or part-time business, local Chamber of Commerce membership of and even playing on the local softball team.

Posted by Ron Them

For over 30 years, the nation's leading financial advisors, broker/dealers, and major media outlets have been using his research, funding strategies, training, and insight. Ron is highly regarded as an expert in the college funding field.

He is a former Chief Financial Officer of a Fortune 500 company and currently owns his own financial advisory company specializing in cash flow planning for business owners and executives. He developed the Cash Flow Recovery™ process that uses cash flow management principals to increase asset value and build wealth for business owners.

He is also the originator of several software calculators to help advisors and families make college affordable, including:

* College QuikPlan EFC Calculator
* "Find the Money" College Cash Flow Calculator
* College Debt Reduction Calculator

Ron has been quoted in U.S. News and World Report, Kiplinger's Personal Finance, Smart Money, Financial Advisor Magazine, Small Firm Profit Report, Practical Accountant, LIMRA's Market Facts, Senior Advisors Magazine, HR Magazine,, Employee Benefit News Magazine,, Entrepreneur Magazine, Insurance Selling Magazine,, The Christian Voice, and Columbus CEO Magazine.