This article has been developed and expanded from an earlier version prepared for AOL DailyFinance in 2013.
Great news! Your kid is ready to go off to college, and you just heard back that she's been accepted to the University of North Carolina, Chapel Hill. Kiplinger's Magazine rates UNC Chapel Hill the No. 1 best value in public colleges, and no wonder: In-state tuition and fees there come to less than $8,600.
Worse news! You don't live in North Carolina. You live somewhere else. And as a result, sending Little Miss off to UNC is likely to cost you more than $33,600 -- four times the price for an in-state student.
The 75% dilemma
Does this sound familiar? It should. Thousands of parents face this dilemma every year. Live on the right side of the state line, and your kids get a world-class education at a "name" public university for a bargain price.
Live on the wrong side of the border, though, and you're faced with a choice: Pay a cheap in-state rate to send your kids to the local Podunk State U, or pay through the nose to send them to their public or private dream school. After all, when you factor in the higher cost of out-of-state tuition surcharges, an out-of-state public university can easily cost as much as an in-state private school -- or more.
But could it be possible to avoid paying the higher cost of out-of-state education? Is there any way to sneak into your out-of-state dream school, but pay the in-state price?
Six ways to save 75%
In fact, there are several ways to avoid the full out-of-state "penalty." Not all of these strategies will work for all people, all the time, in all situations. But when you're talking about the chance to cut your tuition cost by 75%, it's probably worth running down your options.
1. Take advantage of academic common markets
Across the country, four groups of states have banded together into what they call "academic common markets," or ACMs. Within each ACM, students from member states may be entitled to discounted tuition rates -- up to and including full in-state tuition benefits -- when attending schools outside their home state, but within the ACM. Here are the big four:
- New England Board of Higher Education's (NEBHE) Tuition Break covers 82 public colleges and universities in the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. Discounts range from as little as 25% to as much as 85% off the cost of out-of-state tuition.
- The Southern Regional Education Board's (SREB) Academic Common Market offers an even better deal to residents of Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia. Instead of a tuition break covering some of the difference between in-state tuition and out-of-state, students across the SREB receive the in-state rates.
Both NEBHE and SREB are degree-specific and available only to out-of-state students seeking a degree in a field not offered at any public institution in their home state. To find a more flexible program, you need to go west (young man):
- Midwestern Higher Education Compact (MHEC): Here, participating public institutions in Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, and Wisconsin have agreed to charge out-of-state students from participating states no more than 150% of in-state tuition rates -- and without the "no equivalent degree offered in-state" restriction. Private schools offer discounts of 10%.
- The Western Interstate Commission for Higher Education (WICHE)likewise caps rates for out-of-state students at no more than 150% of the in-state rate. WICHE covers Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming.
And did you notice that residents of North Dakota get their choice of two academic common markets? Lucky ducks -- they get out-of-state tuition reduction in almost half the states in the Union.
2. "You've got a friend in Pennsylvania"
An analogous program, dubbed the "friendly neighbor policy," may be available from states that are willing to bend the rules a little. Sometimes, a state will grant in-state tuition rates to a student who lives near its border but in a neighboring state. But we need to emphasize that this is a "sometimes" option. The friendly neighbor policy is less official and more variable than an academic common market.
3. Neighbors with benefits
You should also looks into whether your state has negotiated a specific deal for in-state tuition reciprocity with a neighboring state. Such deals take place outside any academic common market, and they're not at all common. That said, Ohio and Minnesota, for example, are fond of negotiating these types of agreements. Colorado and New Mexico also have one between them.
Washington, D.C.'s D.C. Tuition Assistance Grant (DCTAG) operates in one direction only, offering D.C. resident students as much as $10,000 in annual tuition assistance to attend schools outside the District.
4. Doesn't everyone "move" to college?
Is your dream school's home state in the "wrong" market? Is it not feeling particularly friendly?
Then it may be time to get creative. Just because you move to a new state to attend college doesn't make you an in-state resident. To the contrary, moving to a state to attend college may in fact disqualify you for in-state status. The key is to move into the state before applying to the college, establish ties to the state, and only then apply.
As a general rule, you'll want to make the move at least one full year before the school year begins. You'll also want to begin assembling documentary proof of your ties to the new state immediately -- so make sure to pay your taxes, register to vote, and get a new driver's license in your new state as well.
5. Emancipate yourself from college debt
Too late to make the move before school starts? There's still another option. If a student declares financial independence from his or her parents -- and can prove it by, for example, showing he or she has sufficient funds (or access to sufficient loans) to pay for tuition and room and board -- then it may be possible to become an in-state resident even after starting school.
Again, documentary proof is key here, so taxes, voter registration, driver's license -- make sure to tick all the boxes. And, of course, parents must not be claiming the "independent" student as a dependent on their tax returns.
6. You want cheap tuition? Uncle Sam wants you!
Finally, here's a sixth option: Join the Army (or Air Force, Navy, or Marine Corps). Members of the U.S. military can essentially pick a state for their domicile, and if that state just happens to be the one with the best in-state tuition rate, well, what a happy coincidence!
The ultimate "your mileage may vary" caveat
Does it seem that the strategies above would make it all too easy for your out-of-state student to pay in-state tuition? If so, beware: They won't. By restricting in-state tuition rates to in-state students, state schools earn millions of extra dollars per year off of out-of-state kids. That's money that can pay professors' salaries, fund the construction of luxurious campus amenities, and lower tuition for state residents. Schools won't give up that money easily.
Before planning to take any of these six routes to in-state tuition, get ready to argue your case, and be sure to do further research into any caveats, provisos, and quirks that your dream school's home state may insist on. This quick summary is merely the starting point for your journey.
But at least it's a start.
Fool contributor Rich Smith does not own shares of, nor is he short, any company named above. You can find him on Motley Fool CAPS, publicly pontificating under the handle TMFDitty, where he currently ranks No. 290 out of more than 75,000 rated members.
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