Understanding In-State Tuition

When determining tuition costs, public colleges and universities typically distinguish between in-state and out-of-state students, with in-state tuition set at a far lower rate than out-of-state tuition. In North Carolina, for example, the UNC System is designed to serve the people of the state, and while a set percentage of out-of-state students are accepted at each of the 16 institutions, the ultimate goal remains to attract and support in-state students.

As in other states, North Carolina’s ability to offer lower tuition to residents is made possible by the fact that public schools receive state subsidies, funded by state taxpayers. According to the National Center for Education Statistics, the national average for in-state tuition at public four-year colleges was $9,750 during the academic year 2022-23, compared to an out-of-state average of $28,297. North Carolina sat below these national averages, at $7,327 and $23,155, respectively.

Most students do not travel out of state to pursue higher education. Why were these tuition rates so different? The answer is largely that most students do not travel out of state to pursue higher education. The Institute for College Access & Success (ICAS) found in 2023 that only one in five undergraduates go to college out of state. Because colleges are mostly attracting state residents, they are motivated to keep in-state tuition low in order to remain financially competitive.

Colleges are motivated to keep in-state tuition low in order to remain financially competitive. Due to this drastic tuition-price difference, university systems have created state-residency requirements to help ensure that schools are not being taken advantage of. What do these requirements typically consist of, and how do North Carolina’s requirements compare to those of other states?

While each state determines its own residency requirements for tuition purposes, there are a few common themes to which many states adhere. For instance, the general length of time a student must reside in a state in order to achieve residency is 12 months. Typically, students must be able to show their intent to remain in the state after college, as most states do not grant residency to students who move to the state strictly for educational purposes. Understandably, politicians and university systems want not only to encourage students to remain in their home states for education but to remain as part of the workforce upon graduating. Length- and intent-based residency requirements help ensure that students “pay back” their discounted tuition by contributing to the state’s economy over the long term.

In North Carolina, the residency policy has seen many changes over the years. For example, the state has not always had a centralized residency-determination policy, despite the fact that the public universities are all housed within the same system. Before 2013, students had to prove residency to each state school to which they applied. Because this often led to inconsistent results, the state legislature moved in 2013 to create a centralized process now known as the Residency Determination Service. Now, students have to seek residency determination only once, as opposed to several times.

The state-wide policy that applies to both UNC System institutions and the N.C. Community Colleges System is reasonably simple: In order to receive state-residency status, students must have established a legal residence or domicile in North Carolina and have maintained such for 12 months immediately prior to applying for state residency. Their residence must be “bona fide” rather than “temporary.” Additionally, a student’s parents’ location of legal residence is considered the student’s residence, as well, though this can potentially be disputed if necessary evidence is provided. Nevertheless, if a student’s parents reside in a different state, it is assumed that the student does as well until proven otherwise.

When compared to other states’ policies, North Carolina’s appears to be average in rigidity. Twelve months’ residency and an intent to remain after graduation appear to be the norm for most states, including California, New York, and Texas. Even Arkansas, with a markedly shorter residency requirement of six months, requires an intent to remain in the state. Often included alongside the 12-month residency requirement are other stipulations, such as working in the state, having a state ID or driver’s license, and being registered to vote in the state. Though North Carolina’s policy does not appear to strictly require such things, at least one UNC residency page makes clear that such steps are welcome and can be used as evidence to determine residency.

The appeal of lower tuition is such that out-of-state students often look for ways to beat the system. Ultimately, schools are trying to make their best educated guess that students (and often their parents) have not moved in just for college, that they are paying taxes like other residents, and that they intend to stay and add to the state’s workforce. While requirements nationwide have surely changed over the years, it appears that most states have adopted policies to streamline residency determinations with those outcomes in mind.

A quick internet search reveals countless articles detailing suggestions for bending the rules. Of course, the appeal of lower tuition costs is such that out-of-state students often look for ways to beat the system. A quick internet search reveals countless articles detailing the requirements for in-state tuition, as well as suggestions for bending the rules, such as moving to the desired state a year in advance or even emancipating oneself from one’s parents in order to qualify. While presumably few students are going to such lengths, the growing costs of college have students and parents considering their options.

Perhaps the best such choice is to take one’s own home-state schools into close consideration. It is unlikely that out-of-state tuition will cease to be in effect elsewhere, and, except in unusual circumstances, students can usually find an educational path worth pursuing in their own state. North Carolina’s students, specifically, have many options at their disposal, from dual enrollment to vast community-college offerings to competitive universities. Students should not discount the state’s offerings when looking to cut costs.

Ashlynn Warta is the North Carolina reporter for the James G. Martin Center for Academic Renewal.