How to Decide If Establishing Residency for In-State Tuition Is Worth the Hassle

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Your dream school might be a state school — that happens to be in a different state than the one in which you live. The major downside of attending as a nonresident, however, is that the price tag will typically be much higher than it is for in-state students.

The good news is that you could figure out how to establish residency for college, either before attending the school of your choice or while you are a student there.

But the process can be difficult, and it may not always be your best way to cut college costs. Schools generally require that you live in the state for at least a year before seeking residency status, for example.

Here are the pros and cons to consider, along with how to establish residency for in-state tuition and other ways to save on college:

5 Pros and cons of establishing residency for college

1. Pro: If you qualify, you can save serious money
2. Pro: A forced gap year might be a great experience
3. Con: In-state residency is not guaranteed
4. Con: You might have to give back some financial aid
5. Con: You’ll have to cut ties with your home state

1. Pro: If you qualify, you can save serious money

The biggest benefit of applying to establish residency for college in your school’s state is the cold, hard cash savings. It’s more expensive to attend a state school as an out-of-state resident — some states are pricier, on average, than others. The average out-of-state tuition can be almost three times the price of in-state tuition, according to College Board data.

You won’t just save money outright by establishing residency. Going to school as an in-state resident can also mean you’ll need fewer student loans to cover college costs. Graduating with less student loan debt is a definite plus.

2. Pro: A forced gap year might be a great experience

Because many states require that you live there for at least a year before applying for residency for college, you might find yourself considering spending a gap year in the state where your dream school is located. You might do this before you even apply to the college, or you may defer enrollment after being accepted, if you can work with your school to do so.

You’ll need to be serious about establishing residency so as to not appear as though you are doing so simply to gain in-state tuition privileges. Get a driver’s license or state ID, get a job, find an apartment (even if that means having several roommates to save money) and become a truly involved citizen of your new state.

Putting off your education for a year or more might not be ideal. But the time away from campus could allow you to become truly financially independent and put yourself in your best possible position for a lower tuition.

You could also consider joining AmeriCorps. In addition to receiving a financial award for your education, you can petition your school for residency after completing your AmeriCorps volunteering experience.

3. Con: In-state residency is not guaranteed

Even after going through stacks of paperwork and moving from one state to another, securing in-state status is not a sure thing. It’s an especially difficult process for young people who are often still dependent on their parents, because they often must establish full financial independence to be considered. This is much harder to do at 18 than it is at 25.

Schools also review your application based on evolving state requirements, and then make a unilateral decision. An appeals process might also be handled by the same group of people who could deny you in the first place.

No matter your new home state and school, ensure you have every detail covered in the application process.

4. Con: You might have to give back some financial aid

Changing your status as a student could force you to give back some or all of the financial aid you have received, particularly if you earned it from another state.

If you’re a New York native moving to Boston, for example, you might have to give up any state grant aid you received from your home state before Massachusetts can adopt you as its own. Your school might also cancel or change the aid it promised in your initial award letter as a result of your new residency and lower tuition costs.

Keep this in mind when comparing financial aid offers and calculating the difference between in-state and out-of-state tuition. A University of Massachusetts Amherst student, for example, could save around $20,000 per academic year on in-state tuition ($30,377 including room and board) versus out-of-state tuition ($50,365 including room and board). But those savings might actually be lower considering this caveat.

5. Con: You’ll have to cut ties with your home state

Consider what else you might be giving up by establishing residency for college in a new state. You’d lose your home state voting privileges, for example. And if you’re trying to establish residency while you are already enrolled in college, there could be consequences if you want to go back to your home state for summer vacation.

There could also be other significant financial effects of switching states. Moving to a city with no state or municipal income taxes could be a big win. But what if you’re moving to a high-tax state?

You’ll have to consider whether you truly want to be a resident of your school’s state for the long term — not just while you’re a student. Changing residency isn’t a casual or short-term decision, and it’s a difficult process.

One workaround to keep residency in your home state while still saving on college costs: If you want to attend a neighboring state’s school, consider regional tuition exchange programs; one of many ways to pay less in tuition.

The Western Interstate Commission for Higher Education, for example, teams up with 16 states, including Arizona, California, Oregon and Washington, to deliver reduced tuition costs to out-of-state students.

How to establish residency for college

Now that you know some pros and cons, you may be wondering just how to establish residency for college in another state. First off, you should know that you cannot establish residency in another state by living in a dorm room for a year or more. But you may be able to request to change your residency classification after you have been attending your school for a specific period of time. This means that while you might begin as an out-of-state student, you may become an in-state student and receive the tuition benefit in a later year.

The first step toward establishing residency in your school’s state is to get a handle on your school’s requirements. Many schools make their criteria accessible online, either through the registrar’s office, bursar or financial aid website. If you can’t find yours, contact your school’s financial aid office.

Schools typically take cues from their respective state’s Board of Regents. But schools within the same state might interpret directions differently.

Most of all, they’re concerned with your domicile. This is a fancy word defining your physical presence in a state and your intent to stay. Schools want to ensure your in-state residency will continue after you’ve received your diploma.

Not all states are as welcoming to applicants as others. In-State Angels, a service that has helped students with the residency application process, offers this useful map that shows how difficult it is to become a resident in each state.

Independent students in tougher-to-apply states — such as Arizona, Colorado and Alaska — would have to clear a high bar in proving their financial independence.

How to establish residency for in-state tuition: Gather these documents

No matter your status, you could be expected to provide documents as part of your application. Typical documents you might need include:

  • Voter registration card
  • Driver’s license and vehicle registration
  • Local bank account statement
  • State income tax returns
  • Declaration of Domicile from the county clerk

Even seemingly trivial pieces of paper, such as a library card or a hunting or fishing license, can help prove your residency for college as well as your intent to live in the state long term.

Some schools do offer far easier ways to receive in-state tuition for out-of-state students. A Northwestern Oklahoma State University nonresident undergraduate, for example, could have their out-of-state tuition waived by maintaining a 2.0 GPA or better. And the University of Missouri offers a scholarship that waives in-state tuition requirements for students whose biological, adoptive or stepparent attended the school.

So before looking to establish residency for in-state tuition at your preferred campus, you should find out whether the school offers a similar opportunity.

All that said, applying for residency as a noncitizen or non-permanent resident of the U.S. will be more challenging. If your desired school won’t approve residency in your case, consider DACA financial aid and other opportunities that don’t require citizenship or a green card. Your financial aid office should be able to point you in the right direction.

Other ways to cut college costs

Establishing residency for in-state tuition is one way to save money and avoid a high amount of student debt. But proving residency for college isn’t possible or ideal for everyone, and it’s far from the only way to cut your college costs.

For one, you can consider a variety of gift aid using scholarship search tools. You might also consider the numerous loan forgiveness programs out there, particularly if you’ve already borrowed student loans and are considering entering a field in which you’ll be of service to others.

Rebecca Stropoli contributed to this report.

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Here are our top student loan lenders of 2021!
LenderVariable APREligibility 
1.04% – 11.98%1Undergraduate, Graduate, and Parents

Visit College Ave

1.13% – 11.23%*,2Undergraduate, Graduate, and Parents

Visit SallieMae

3.84% – 9.40%3Undergraduate and Graduate

Visit CommonBond

1.05% – 11.44%4Undergraduate and Graduate

Visit Earnest

1.22% – 11.66%5Undergraduate and Graduate

Visit SoFi

2.76% – 7.14%6Undergraduate and Graduate

VISIT CITIZENS

1.24% – 11.99%7Undergraduate and Graduate

Visit Discover

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.

1 Important Disclosures for College Ave.

CollegeAve Disclosures

College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
 
This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a first year graduate student borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

Information advertised valid as of 4/22/2021. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.


2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

3 Important Disclosures for CommonBond.

CommonBond Disclosures

Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.  If you choose to complete an application, we will conduct a hard credit pull, which may affect your credit score. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Jan 1, 2021 and may increase after consummation.


4 Important Disclosures for Earnest.

Earnest Disclosures

  1. Rates include 0.25% Auto Pay Discount
     
  2. Explanation of Rates “With Autopay” (APD)
    Rates shown include 0.25% APR discount when client agrees to make monthly principal and interest payments by automatic electronic payment. Use of autopay is not required to receive an Earnest loan.

    Available Terms
    For Cosigned loans – 5, 7, 10, 12, 15 years. 
    Primary Only – 10, 12, 15 years

    In school deferred payment is not available in AL, AZ, CA, FL, MA, MD, MI, ND, NY, PA, and WA).


5 Important Disclosures for SoFi.

sofiDisclosures

UNDERGRADUATE LOANS: Fixed rates from 4.23% to 11.26% annual percentage rate (“APR”) (with autopay), variable rates from 1.22% to 11.66% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.13% to 11.37% APR (with autopay), variable rates from 1.12% to 11.73% APR (with autopay). MBA AND LAW SCHOOL LOANS: Fixed rates from 4.30% to 11.52% APR (with autopay), variable rates from 1.29% to 11.89% APR (with autopay). PARENT LOANS: Fixed rates from 4.60% to 10.76% APR (with autopay), variable rates from 1.22% to 11.16% APR (with autopay). For variable rate loans, the variable interest rate is derived from the one-month LIBOR rate plus a margin and your APR may increase after origination if the LIBOR increases. Changes in the one-month LIBOR rate may cause your monthly payment to increase or decrease. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 4/1/2021. Enrolling in autopay is not required to receive a loan from SoFi. SoFi Lending Corp., licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org)..


6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

Undergraduate Rate Disclosure: Variable interest rates range from 2.76% – 7.14% (2.76% – 7.14% APR). Fixed interest rates range from 3.01% – 7.50% (3.01% – 7.50% APR).

Graduate Rate Disclosure: Variable interest rates range from 2.19% – 6.73% (2.19% – 6.73% APR). Fixed interest rates range from 2.89% – 7.09% (2.89%-7.09% APR).

Business/Law Rate Disclosure: Variable interest rates range from 1.36% – 9.54% (1.36% – 8.82% APR). Fixed interest rates range from 4.13% – 9.84% (4.13% – 9.12% APR).

Medical/Dental Rate Disclosure: Variable interest rates range from 1.36% – 8.34% (1.36% – 8.04% APR). Fixed interest rates range from 4.03% – 8.64% (4.03% – 8.34% APR).

Parent Loan Rate Disclosure: Variable interest rates range from 2.10% – 7.41% (2.10%-7.41% APR). Fixed interest rates range from 4.69% – 7.83% (4.69% – 7.83% APR).

Bar Study Rate Disclosure: Variable interest rates range from 4.45% – 9.60% (4.45% – 9.53% APR). Fixed interest rates range from 7.39% – 12.94% (7.38% – 12.81% APR).

Medical Residency Rate Disclosure: Variable interest rates range from 3.55% – 7.05% (3.55% – 6.77% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.07% APR).

Variable Rate Disclosure: Variable Rates are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of March 1, 2021, the one-month LIBOR rate is 0.11%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%. 

Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.

Lowest Rate Disclosure: Lowest rates require a 5-year repayment term, immediate repayment, a graduate degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer.  Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.

Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank participating school.

Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.


7 Important Disclosures for Discover.

Discover Disclosures

  1. Aggregate loan limits apply.
  2. Get a cash reward on each new Discover undergraduate and graduate student loan when you earn at least a 3.0 GPA (or equivalent) in any academic period covered by the loan. Limitations Apply. Visit DiscoverStudentLoans.com/Reward for terms and conditions.
  3. Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments. The interest rate ranges represent the lowest and highest interest rates offered on Discover student loans, including undergraduate, graduate, health professions, law and MBA Loans. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Learn more about Discover Student Loans interest rates at DiscoverStudentLoans.com/Rates.
  4. Lowest APRs shown for Discover Private Consolidation Loans are available for the most creditworthy applicants who are approved and choose a shorter repayment term, and include a 0.25% interest rate reduction while enrolled in automatic payments. The fixed interest rate is set at the time of application and does not change during the life of the loan. The variable interest rate is calculated based on the 3-Month LIBOR index plus the applicable margin percentage. For variable interest rate loans, the 3-Month LIBOR is 0.250% as of April 1, 2021. Discover Student Loans may adjust the rate quarterly on each January 1, April 1, July 1 and October 1 (the “interest rate change date”), based on the 3-Month LIBOR Index, published in the Money Rates section of the Wall Street Journal 15 days prior to the interest rate change date, rounded up to the nearest one-eighth of one percent (0.125% or 0.00125). This may cause the monthly payments to increase, the number of payments to increase or both. Your APR will be determined after you apply. Visit Discover.com/student-loans/consolidation.html for more information, including up-to-date interest rates and APRs.
Lowest APRs shown for Discover Student Loans are available for the most creditworthy applicants for undergraduate loans, and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.