The Michigan Merit Scholarships were gone several years ago. Now they only have much smaller ones (Michigan Competitive Scholarships). Nevertheless, UMich is one of the few schools that meet 100% needs of in-state students. The CoA for in-state students is between $28k and $30k right now. For OOS, the CoA is between $55k and $60k. The percentage of enrolled freshmen from OOS students actually dropped a little bit last year, but the total percentage of undergraduate from OOS is still on an upward trend. One of the reason is the gradually shrinking HS graduate class each year in Michigan. Lastly, Mary Sue Coleman has left the office a couple years ago. The new president seems to focus on making UMich more affordable to low income families both from in-state and OOS.
@billcsho The new president may want to make UMich more affordable for low SES OOS students, but the strategy is still to leverage OOS for tuition. Any relief for low SES students (in or out of state) is likely going to be balance with an overall increase in tuition.
Obviously, money must come from somewhere. Nevertheless, they are raising the endowment to provide more financial aids instead of relying on tuition increase.
@adlgel I can give some examples of the types of out of state students who come to Ole Miss.
Ole Miss has relatively low admission standards but is still considered a “good” school. The student body is fairly polished and affluent, but in fact it’s fairly cheap to be “rich” at Ole Miss. Ole Miss gets lots of students from Texas who are shut out of UT due to the 10 percent rule; Ole Miss is cheaper than SMU. Due to the Hope Scholarship, competition to get into the University of Georgia is intense. The average ACT is now 30. Some kids can’t make that, but there is no other decent state school in Georgia, so a bunch head to Ole Miss. So in the cases of Texas and Georgia, they are paying more to go to Ole Miss because they have to, not because they want to.
Students from the Missouri Boot Heel will pay extra to come to Ole Miss because the Boot Heel is Southern and Mizzou is a Yankee place. Students from much of Tennessee will pay extra to come to Ole Miss because UT is way on the east side of the state and is a dreadful place. Some people find the Ole Miss OOS tuition to be competitive with their in-state tuition. Some Louisiana kids just hate LSU, and if you’ve ever been there you will understand, and would be willing to pay any amount not to go there. The groups I’ve just described are probably the bulk of the Ole Miss out of state students. Of course, they come from all over, but these are the big clumps of them, and they all of a big reason or even necessity for being there.
One of my nieces is at the University of Minnesota; she also was accepted to, among other schools, our state flagship, UW-Madison. At least part of her decision was based on the structure of the engineering programs, her intended major at the time. (She’s now majoring in computer science.) I don’t know what the cost difference is. None of the younger generation in my family went to UW-Madison, even though all of them grew up within 100 miles of it; almost everyone in my generation (me and my siblings; my husband’s siblings; and three of my in-laws) went to UW-Madison.
@dfbdfb, we’re in Alaska too. I’ve got a daughter at UW, and my current senior is likely headed out of state as well because their desired majors weren’t here. And, honestly, I think it’s not a bad thing for kids from our geographically isolated location to experience a different locale if they can swing it financially. Our UW kid is using my husband’s GI Bill, and the next in line will go somewhere where she gets significant discounting. Full OOS tuition is not in the budget here 
I don’t think this is quite right. The University of Michigan is currently in the midst of a $4 billion capital campaign–largest ever for a public university. They’ve currently raised $3.15 billion toward that goal, which they should easily blow past by the time it’s finished in 2017 to coincide with the University’s bicentennial. Top priority with those new funds is to increase FA so as to meet full need for all students, including OOS and internationals. Currently they meet full need only for in-state students, though they’ve been increasing OOS FA in stages, beginning with the highest-need admits. I do think they will continue to maintain a large differential between in-state and OOS tuition, and they expect OOS and international students to comprise an even larger share of the student body in the future as the state of Michigan’s pool of new HS grads continues to shrink. But most of the additional FA for OOS students is going to come from additions to endowment they’re making as we speak, not from tuition hikes. (Not to say tuition hikes are entirely off the table). I also think they expect to have no trouble continuing to attract large numbers of highly qualified full-pays, both in-state and OOS, based on the strength of the brand and Michigan’s reputation for academic excellence.
The North Avenue Trade School, i.e. Georgia Tech, would beg to differ with that statement.
Out-of-state tuition and fees at UM-Ann Arbor over the last few years:
$37,782
$39,122
$40,392
$41,906
Currently it’s $43,476
If you keep increasing OOS tuition, you keep making it harder and harder to meet 100% of full need for OOS students. Maybe UM can do it, but with all of the other financial challenges facing public research universities, I have my doubts. Time will tell.
@maya54 Just curious, what school is that?
@Gator88NE They did increase tuition at a higher rate for OOS than for in-state students. However, that ~3% annual increase in tuition is not really atypical. It is just about national average. While their increase in financial aid for OOS students is not typical for public colleges at all.
http://trends.collegeboard.org/content/average-rates-growth-published-charges-decade-0
The tuition rate for 4 year public colleges increased at annual rate of 3.4% in average within the last decade. Note that UMich has one of the largest endowments among all public universities. Indeed, not many universities can pledge to increase financial aids to OOS students.
We are planning on my daughter attending college out of state. One of the main reasons is her intended major and career plans - music performance. There is exactly one school in our state that would be a good fit for her plans. It is affordable without scholarships, but we would prefer she attend college somewhere else as long as scholarships make it affordable. I think everyone should experience living elsewhere at some point and college is a good time to do that. Living in one place your whole life really limits your world view and how you perceive others. In many locations, most people have the same outlook and it’s hard to really see things differently. Going to college in state where most of your friends from HS are going really won’t change much of that. Living in a different state/region will bring you into contact with people of varying views and will help you understand differences better. Even if you end up back where you grew up, you have that experience. I am the daughter of a Marine and lived in several states and another country. I am not the same person I would have been had I lived in one place my entire life. The constant moving isn’t for everyone, but I wouldn’t change it for anything. My children, on the other hand, have always lived in the same place and I really want them to have some experience living elsewhere.
"Out-of-state tuition and fees at UM-Ann Arbor over the last few years:
$37,782
$39,122
$40,392
$41,906
Currently it’s $43,476"
That’s the right price for UM OOS.
For Michigan, its OOS market has nothing to do with the IS market.
USNWR #29 UM at $43.5 compares with #26 UVA at $43.8, #27 Tufts at $50.6, #27 Wake at $47.7, and #30 BC at $49.3. Those are the relevant schools that would be competing for a kid considering UM OOS. It is completely irrelevant to that kid what the IS price is. If that kid happens to live in VA, the kid is almost always going to take the IS price at UVA at $14.5. #30 UNC-CH is a deal at $33.6 OOS, but very hard to get into OOS since their OOS enrollment is capped at a low 19%.
Parents pick schools primarily based upon the price/value (academic quality) ratio given the family’s resources. Depending on the situation, that ratio can wind up as anything. Full sticker or discounted. Public or private. In or out of state.
UM and UVA compete for OOS kids primarily against fancy private schools, and their price shows it. Oklahoma and Ole Miss and Bama compete more with IS pricing available in surrounding states, and their net pricing for OOS students shows it.
Yes if you can afford $60,000 a year then you can go pretty much wherever you want, nearby, same state, far away state, big school, little school. The question “why” is not relevant because the answer is “why not?” That is the way it has always been.
Publics rationally pursue this strategy if they can recruit and bring in students that generate marginal revenue greater than their marginal cost (MR>MC), and they can’t identify others who generate higher net marginal revenues. They implement a range of price discounting strategies (e.g., through various forms of merit aid) that allow them to price discriminate (charge different prices to different students not based on cost of educating). This allows greater revenue capture and cross subsidization of in-state students than otherwise.
Families/students rationally pursue this strategy and choose an OOS school if their willingness to pay is greater than the individualized price of attending they are presented with (WTP >Pi), and they can’t identify an alternative with higher net benefits.
Being from NJ, a state whose primary export is college Freshman to other states who generally don’t return upon graduation, here’s what I have to offer:
As a parent, I wasn’t impressed in any way with the options available for my son the mechanical engineering major, who wants an automotive or motorsports career. He was accepted at NJIT, where I’m an alumnus, but the program and opportunities were not at all conducive for him to get any growth opportunities towards his end goal. It was also not cheap, really only an $8k or so delta between there and the southern flagship where he ended up going, getting all his boxes checked off for wants in a program and atmosphere. My HS Senior daughter didn’t consider applying to any in-state schools for a variety of reasons, a major one being that at Rutgers, you could be riding a bus all over PIscataway and New Brunswick to get to your classes; there just is not anywhere near the campus feel of waht most state flagships offer. And doing the math of current costs, tuition, room and board dollars, as an example, OOS in NC, at App State for example, is cheaper than in-state at any NJ in-state school. Others schools she’s either accepted at or are pending have that same or less money swing I experienced with her brother two years ago.
@musicfamily Music performance major would offer merit scholarships to highly talented students. Indeed, I know a few students, even international students, received very good merit scholarships from UMich music school.
D1 was never interested in attending my alma mater, our state flagship. I suspect she only applied there because she thought it would please me, although I was fine with her going elsewhere. She had accepted a spot at a pretty prestigious private school (also in another state), but decided to attend this school instead, for several reasons:
She wanted to attend a good public school, but wanted a smaller environment than UT. Her school was 16,000 vs. UT’s 48,000.
She wanted to experience an entirely different geographical region and social culture.
She loved the small college town, its weather (four distinct seasons vs. spring, summer, still summer, and one month of winter that we get in Texas), and its relative proximity to the coast.
She had a wonderful experience, both academically and socially. And graduated with no debt. In fact, this flagship was far less expensive than the private school we were planning to send her to before she changed her mind late in the game.
She would have been fine at UT, but she had another great option, so she took it, with our blessing.
Fwiw, this school is not filling its coffers with OOS money-by law, more than 80% must be in state students.
@billcsho thanks! We’ve been looking around and her teacher believes she would be able to get substantial scholarship offers. Nothing is guaranteed, however, especially in music, so she will apply at the in-state school as a financial safety. It is a very good music school and we would have no regrets if that is where she ends up. Would just prefer she gets the experience of living somewhere else.