If you have to pay nonresident tuition, are public universities worth the price?
That is the question facing three families whose children are heading to a state university as nonresidents this fall or are contemplating one of these institutions in the future.
In my last post, I shared the issues the families faced and also solicited advice or comments from visitors to my college blog. I was thrilled to see so many of you come through with great observations.
If you missed the post and the comments, please go back and read them:
Today I wanted to share a few observations of my own.
1. Difficult state residency requirements.
Many families hope that their children will be able to become a resident in the state where they are attending school after the first year and then qualify for in-state tuition.
That was the hope of a teenager whose situation I profiled in my last post. The state university the girl expects to attend in the fall costs $50,000 a year for nonresidents. The parents will only pay for one year and expect the girl to qualify for in-state tuition and cover the remaining three years.
This is nothing short of financial suicide and if the parents think they can sign off on this and watch their child drown in debt, they are mistaken. The daughter would need to obtain private loans and no lender will hand over the money without a co-signer. I hope that puts the kaboosh on this insane plan.
Most states have residency requirements to prevent students like the one described above from benefiting from lower in-state costs. The residency requirements vary significantly, but according to FinAid, a student typically must have at least one parent who is a state resident for at least one full year before the student starts college. You can find links to the state residency requirements at FinAid.
2. Elite flagships are fixated on rich students.
If you aren’t rich, I’d strongly suggest that you forget about attending flagships that enjoy golden brand names like the Universities of California, Michigan and Virginia or that are located in desirable geographic areas such as the Universities of Colorado and Arizona. These schools and others with strong US News rankings are hungry for outsiders who can bankroll an education that can cost more than $225,000.
Some of these schools, such as Arizona and Michigan, provide token merit scholarships (the averages are $7,642 and $6,816 respectively), but that won’t go far when you will be paying private school prices for state educations. Some flagships, such as the University of Wisconsin and University of California campuses, don’t give any merit scholarships to outsiders.
Prestigious state schools are charging high prices because they can. Plenty of wealthy families are willing to pay the tab because of the prestige attached to a school like the University of Virginia, UCLA, University of North Carolina or University of Michigan.
Unfortunately, some students heading to these flagships can’t afford the cost and will face scary debt loads just to earn a diploma from a school with a marquee name.
3. Don’t flatter yourself.
It’s easier to get into prestigious flagships as an outsider now because these institutions need the easy money. If parents are willing to pay $50,000 to attend Indiana University, (like one of the dads in my last post appears ready to do) IU will gleefully take the money.
State universities have been recruiting heavily across state lines, in part, because state governments have been reducing their financial support. Finding out-of-state sugar daddies is one way for these schools to survive financially. And it’s easier to attract rich students to their campuses than for these institutions to get serious about making meaningful structural changes.
I wrote a story for my college blog over at CBS MoneyWatch a couple of years ago about a dad, who works at Columbia University, whose daughter had planned to attend the University of Michigan in the fall of 2011. She attended the new student orientation before her dad noticed that he had misread the bill. He thought the tuition was going to be a total of $19,000, but that was the price per semester.
4. Look beyond the obvious choices.
If you look beyond the most popular flagships, plenty of state schools offer significant discounts to nonresidents.
Like the flagship schools, whether you qualify for admission comes down to your academic statistics. You can often find a scholarship matrix on the websites of universities. The one below comes from the University of Nevada, Reno.
State institutions that are off the popularity radar are interested in outsiders because they can generate more money from them (but the amounts will be significantly lower than what the prominent flagships can charge).
Another prime motivator for the outreach to smart nonresidents is to inch up U.S. News & World Report’s college rankings. I frankly find this is craven, but it’s the reality.
A potential drawback to attending less prestigious schools is that they often don’t enjoy the level of resources as their brand name peers. One consequence of this will be lower graduation rates. The four-year grad rate at the University of Nevada, Reno, for example, is an appalling 13.6%.
I should add that some of the popular destination schools such as University of Colorado and University of Wisconsin don’t have great four-year grad rates (50% and 41% respectively) either and the price tags will be far, far higher.
One way to boost the chances of getting out in four years and to enjoy a better educational experience is to try to get into a state school’s honors college. These honors colleges were created as a way to attract smart students who normally might be heading to private schools.
5. Check education compacts.
You can also look for state schools that observe a reciprocity agreement with institutions in your state. Thanks to one of these agreements, you may pay the same price as a resident or capture a significant discount. Here are the four regional compacts:
- Western Undergraduate Exchange
- Academic Common Market
- Midwestern Higher Education Compact
- New England Board of Higher Education
6. Schools go by the numbers.
State schools don’t enjoy the luxury of evaluating students holistically. There are too many students applying.
Merit scholarships are awarded basically by looking at a child’s grade point average, test scores and class ranks. If your child is weak in one or more of these areas, the chances for money or meaningful money will drop significantly. Head over to a state university’s admission web pages and research what kind of out-of-state scholarships are available.
7. Throw a wide net.
In my last post, I was struck by the mother who said her daughter is such a good student that she deserves to attend a flagship outside her state of New Mexico. I agree that smart students should conduct a broader search, but what upset me was that it only occurred to the family to check out other state schools.
They should also be looking at private schools. The latest report on private school pricing, which was released this week, documented that the average tuition discount at private colleges and universities is now 53%.
8. Check prices before applying.
Don’t let your child apply to any state or private school without first using a net price calculator that will give you personalized estimate of what that school would cost you.
When checking out state universities as a nonresident you need to be careful that you are getting an accurate price. If the calculator doesn’t ask about your state residency, the cost estimate will probably be wrong.