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<p>No, not true, there is no rule, formal or informal, that limits Michigan’s percentage of OOS students, which is why it’s always had among the highest percentages of OOS students among the top publics. For many years it was about 65% in-state, 35% OOS, but in the last several years it’s been more like 60-40, and there is no “penalty.” Who would penalize them? The state legislature knows Michigan residents are getting a great deal as the University discounts tuition for in-state residents by a far larger amount than the state contributes in annual subsidies. The University is, in effect, subsidizing the state’s residents, and not the other way around.</p>