Seeking the loopholes that let college students pay in-state tuition

by Grace

A student may qualify for in-state tuition even if his parents are not residents of that state.  The qualification process is drawn out and complicated, but families can pay a fee for an expert’s guidance in handling the details.

At desirable flagship universities in states like Michigan and Colorado, the difference between in-state and out-of-state tuition for students who get no financial aid can now approach $100,000 per undergraduate degree. And some families may also enjoy thumbing their noses at state legislators who expect affluent parents’ out-of-state tuition to subsidize the ever-lower budget allocations those representatives provide to higher education.

So it should come as little surprise that a service like In-State Angels has emerged to help high school graduates establish residency in another state. This is legal, though complicated, so once the company succeeds, it asks for roughly 10 to 15 percent of the ultimate savings as a fee.

The process for qualifying can be quirky and difficult to decipher.

You usually need to be living in a state for at least a year before you can establish residency. Then, you also generally need to prove that you’re financially independent (or close to it) from your out-of-state parents, which then makes it complicated for them to help with college costs during school.

Quirks abound, and few if any states handle the fine print identically. There are often exceptions for people who are veterans, residents of nearby states or noncitizens whose parents brought them into the country and to a particular state when they were young. Rules can be different for people who are married, which has led some people in California to marry to qualify for in-state rates. Independence may or may not require a part-time or full-time job and having no co-signers on any student loans. That last one can make it difficult for a student to come up with enough money to pay even the lower in-state tuition plus living costs.

Some are concerned that fraud is involved, but In-State Angels founder Jake Wells points out that it is “about freedom and destiny”.

… “New adults have the right to determine where they want to live going forward, and they are not bound by the state they grew up in,” he said.

It’s only natural that people will seek out loopholes when tens of thousands of dollars are at stake.

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Ron Lieber, “Services Emerge to Help Out-of-State Students Pay In-State Tuition”, New York Times, July 3, 2014.

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