This thread might provide some thoughts about how others have approached having a student attend a college close-by: Going to college in one's own hometown?
In terms of trying to get your teen to consider local options, here are a few additional ideas:
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Tally up how much might be spent on travel to go to university elsewhere. Then indicate that the money could be spent on something else, like study abroad, or subsidizing an unpaid internship, or a special summer program, or other things that might not be feasible if she attended a school with higher travel costs.
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Talk about Covid and how students were often semi-stranded at the start of the pandemic when everything closed down. Also, you could talk about how being close to home could be a nice option if there’s a need to pivot (i.e. if everything goes virtual and the dorms close, or the dorms are mostly empty and things have gone virtual).
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Give her assurances that she can/will be “away” and that you won’t be dropping by or visiting unexpectedly. She will have the “away” experience with the convenience of easy travel home and not the need to wait for shuttles to the airport that might be multiple hours away, then waiting at airports, having long layovers or possibly missing connections, especially during winter holidays when winter weather wreaks havoc.
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Remind her that if she goes closer, then you may be able to come out for events that otherwise would be pretty impossible. For instance, you could see her perform in a play, or (if parent weekend is a big deal) actually attend parent weekend, or see her at times when there are brief breaks (like Thanksgiving), etc.
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Take a look at your health insurance. Some insurance only covers in-state costs which would require you to buy additional insurance for her while in college. (Perhaps she might be responsible for paying for this, or part of the savings could be added to the “enrichment” fund of savings from travel to school.) If she likes her health providers, that could be another reason to stay local or at least in-state if she was going to have virtual appointments with them (as providers can only do virtual appointments with patients in state’s they’re licensed in…which is generally the state they’re living in).
Wishing you luck with the situation, as I know it’s not an easy one.