Why is it so much cheaper to go an in-state college then an out-of-state college?
In: Economics
They’re both tax-payer subsidized.
In-state means you have already been the tax-payer.
Out-of-state means you haven’t been their tax-payer yet.
In state students or their parents have contributed to the state colleges indirectly by paying income/property taxes within that state.
Out of state students haven’t.
Normally, it would be a violation of the dormant commerce clause in the form of economic protectionism to charge out of state students more than in state students, but the Supreme Court has ruled that state governments (public universities are state actors because of the source of their funding) have a compelling interest in ensuring that the recipients of that funding contribute to the state where they received it. Basically, they want to discourage people from moving to a state for college and then taking their tax funded education elsewhere. I don’t really agree with that reasoning, but that’s the reason.
Because the schools get tax dollars from the state to subsidize the costs.
And then they charge more on top of that!
Tax subsidies. When you go to a state college in your home state, you aren’t paying nearly the full price of what it costs to put you through school. A significant portion of your costs are being covered by state taxes. If you aren’t from that state, they charge you the full cost because you haven’t been contributing to that tax revenue since you didn’t live on that state
Because as a resident of a given state, you pay taxes to that state, and those taxes help fund the education.
Out of state residents have not paid taxes to that state, so are charged more tuition to make up for it.
They paid for it.
State-run colleges are built by the state. The state pays all the professors and runs everything, they’re government employees. The college if funded by tuition, sure, but state colleges are ALSO funded by the state. The state can only afford a college because they tax people who live there. It’s THEIR college. (Or, really, their parents’ college.)
(And places like Harvard simply have enough money that all their operating costs get paid from the interest. They have high tuition just to keep the riff-raff out.)
It’s not much cheaper to go to an in state college, then to an out of state college. Are you trying to transfer, or getting your second degree?
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