Public universities are funded overwhelmingly by state tax dollars.*
Parents of that state, who’ve been paying taxes to that state, get a discount on their children’s education from the public institutions within that state.
*Adding a correction on this; my point is that the tax money funding the actual undergraduate programs comes from the states. The Feds obviously chip in, but a huge fraction of the Fed allotment goes to graduate-level research instead of undergraduate-level education.
Obviously tuition is the major breadwinner these days, but the only thing to offset tuition funding is state funding, so the states reserve the discount for the people who’ve actually paid taxes to those individual states.
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