Five sneaky ways to get instate tuition for an out of state kid

Parents Forum
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<p>Not sure why everyone is jumping all over Taxguy about the Maryland Delegate Scholarship issue (unless she reapplied for years after her freshman year). She paid OOS tuition (as a Maryland resident) for her freshman year (with the help of the currently $200 Delegate Scholarship - wow what a godsend) and in subsequent years as an instate student. She had to submit FAFSA each year to renew it, so I doubt that she got it past freshman year.</p>

<p>In my state, I had to prepare most of my son’s application to BSU because once you got past the Common App-type questions, the next several pages were devoted to information about state residency, such as voting registration, voting, driver’s license numbers for both spouses, lists of real estate owned, bank accounts, car registration details, and on and on. Maybe this is all because kids used to routinely declare themselves emancipated and get instate tuition and the university is trying to maximize dollars by selling space to OOS.</p>

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Well, maybe there really was a unique major that she wanted at U of Cincinnati. It’s a huge school, so it’s quite possible that it offers something that isn’t available in Maryland, though I would think that her intended major would need to be quite specific and narrow in order to fit that category. Wikipedia has a good list of the various programs that might potentially be draws to an out-of-stater. </p>

<p>I can see that it would be frustrating for a parent to have a kid intent on majoring in something obscure enough that it is only offered at a large state public (with enough resources to actually sustain a department in such an obscure field) – and then be uncomfortable with paying essentially “private” rates for a public quality education. My DS made the mistake of applying to one OOS u. as a safety, not realizing that they did not offer any financial aid to out-of-staters – she was accepted, but in the end that u. ended up with the highest sticker price of any of her choices.</p>

<p>But the point is, those public institutions are funded with state tax money and established for the benefit of state residents. There is no such thing as a person who lives in a state without paying taxes (as noimagination suggests) -because “taxes” include state sales taxes as well as various use fees. People who live and spend money within a state are contributing to the tax base, either directly or indirectly. For example, the renter may not pay property tax, but his landlord does – and if the state has an income tax, the rental payments are taxable income for the property owner, so they do get taxed.</p>

<p>So I can see a case where a kid applies to Podunk State U. because of their unique program in Mongolian Basket-Weaving, and the parents balk because they are not all that fond of their kid’s choice of major, much less the OOS tuition they will be billed for it. </p>

<p>On the other hand, if Taxguy pushed his kid into choosing a school based on his ability to manipulate the residency practices to his advantage – I’d expect that the kid would be resentful, especially if she believes that her parents have the capacity to pay more. Taxguy would be the only one who would know the true situation, and certainly it is his right to choose not to share too many details. </p>

<p>There are probably many legit ways to establish in-state residency. I did it many years ago in California, and it was very straightforward and fully within the law at the time. It was my true intent to become a California resident, I remained in California year round, registered to vote in California, got a California driver’s license, etc. I came to California in 1970 and have continuously lived in the state since. So there was no pretense involved. </p>

<p>Current practices would not allow an undergrad to establish residency in the same way, though in California grad students can and do establish residency within a year while attending college – so the point is that there are legitimate ways to do what Taxguy’s daughter did. I just hope that the daughter’s choice of college wasn’t constrained by her father’s maneuvering.</p>

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<p>I do think many parents would balk at paying OOS rates for a particular major. The OOS tuition rate for UC does seem lower though than most privates so still probably a better deal than many privates… Parents and kids make decisions about public/private all the time. The majority of kids do stay instate and attend their own state’s community colleges and universities. I’m just surprised that Ohio (U Cincinnati) seems to have granted instate tuition so easily to a Maryland resident. If I were an Ohio resident, I think I would be scratching my head on this one.</p>

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<p>Some of taxguy’s statements are not ringing true.</p>

<p>Taxguy: “Calmom You don’t probably live in Maryland, or you wouldn’t be saying what you did. Maryland does NOT offer the breadth of majors that California offers. Maryland has some excellent programs and schools. HOWEVER, their offerings in majors is quite limited compared to a state like Ohio or California. They do not have, for example, good programs in art and design. They don’t have a very strong music program other than what Hopkins offers, which is a private school.”</p>

<p>Maryland Institute College of Art (MICA) was ranked 2 in the nation among fine arts programs by US News, and its Graphic Design MFA program tied for 6th among graduate schools for Graphic Design.</p>

<p>Peabody, which is affiliated with Hopkins, is ranked in the top 15. </p>

<p>So are you saying that you can’t find ANY highly ranked programs in Maryland, or that you can’t find CHEAP highly ranked programs in Maryland? Was it that those programs are at expensive privates and not at cheaper publics?</p>

<p>Is there some art, design or music program you were specifically looking for that U of C offered that was “better” than those in the state of Maryland, or were those just general examples?</p>

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<p>I think peoples’ anger(?) toward taxguy about what he did to get instate tuition is misplaced. I cannot believe that Ohio was not aware of his method; it was not hard to figure out. By allowing wealthy OOS parents to set their kids up like taxguy did, any benefit to attracting wealthy OOS students is eliminated after the first year of tuition. Ohio should be the one smacked down for this.</p>

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Sources of state government income vary a great deal by state, as do levels of state support for higher education. My point - if it was not clear - is that I disagree with the premise that pricing for public higher education should somehow be tied to a consumer’s level of support for any given institution. Clearly some state residents provide greater support for in-state schools, but I don’t favor giving those people a tuition discount in return.</p>

<p>EDIT: I also concur with JHS that requirements for ‘in-state tuition’ are tenuously related to any significant public objective.</p>

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<p>I think most parents would take the opportunity to pay in-state tuition for a desirable OOS school. When the Common Market was in place, I was not above shopping majors and was a bit disappointed when I discovered that UVA was not part of the program. </p>

<p>While I did not think the article in the original post was too enlightening, I don’t have an issue with taxguy. I always kind of figured that it works out among the states. People try to pay in-state tuition in Maryland too. </p>

<p>Ohio, by the way, is pretty generous to OOS students at some of its colleges.</p>

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<p>Some pages back, taxguy says this:</p>

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<p>So he is seemingly proud to be raising another generation of sneak-around-the-rules citizens of whatever state is convenient at the moment. Or as in this case, citizens of multiple states at once.</p>

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<p>I agree, MD Mom. Most parents would love to get instate rates at OOS schools. The Academic Common Market and things like that address some of those issues and about majors not available instate. I think Ohio has reciprocal agreements with Kentucky, for instance and that is great. I doubt though that Ohio has any agreements with Maryland. I agree with Bay-the issue for me is the rules and loopholes Ohio seems to operate on that allowed the daughter to get instate rates so easily. I wonder if they are tightening up?</p>

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<p>Some states and/or programs are phasing out of the Academic Common Market, probably because of people like me shopping majors. ;)</p>

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<p>I daresay most of the parents here didn’t buy this bottom-of-the-barrel excuse from their kids.</p>

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If taxguy isn’t breaking any laws I don’t see anything wrong in him teaching his kids not to pay more than they need to - what is sneaky to some is diligent to others. The reasons people don’t take advantage of loopholes is because they aren’t aware they can do so, or they don’t feel it’s worth the effort to do so, or there may be risks in doing so that they don’t want to assume (say the kid decides to take the money and go to univ of woodstock). People and not declining to pay less because they feel good about paying more. </p>

<p>If you want to raise children to look at their 1040s, and if they find they’re paying less than the average guy with their income, they should voluntarily pay more, that’s your choice. Most would have no objections in taking advantages granted by the law.</p>

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<p>Yes, but I think the opportunity cost in his tactics may outweigh the financial benefit. The loophole that he found was at a public institution in a state that does not tend to attract more out-of-staters than it can accomodate. Nothing wrong with Ohio universities – they just don’t have the cachet of the top flagships like UVA, Michigan, and Berkeley – so Ohio hasn’t yet felt the need to tighten up. Or maybe Ohio feels that the balance struck between charging OOS tuition for the first year and gaining students committed to staying in Ohio is worth it – after all, the student who wants to establish residency is going to have to remain in state year round, looking for summer work locally and spending money locally. </p>

<p>Virginia, Michigan & California have a different problem: aside from the financial angle, the popularity and competitiveness of their schools would threaten to crowd out their own state residents without the cost differential. California residents have a right to expect that students who do well in high school will be able to attend a UC. When I say “right” I don’t mean some personal sense of entitlement – I mean that its a right written into the laws that govern admissions to the state university system. Hence they place limits on admission for out-of-staters. Given the international reputation of Berkeley – without that limitation the university could very easily become inaccessible to the students who have grown up attending local high schools. </p>

<p>Part of the value of in-state universities is that they serve the needs of students in local communities, who save money on college by living at home while attending school. In fact, for in-staters, the most significant expense of college may be room and board rather than tuition – certainly that is true for the COA in California. And those students don’t have a more distant option – that is, it would not help the kid who lives with his parents in Walnut Creek and plans to commute every day to Berkeley if there were some reciprocal arrangement by which he could avoid OOS tuition to go to Michigan instead. </p>

<p>California, at least, has a particularly strong commitment to serving those local students, which is why there is a strong partnership between the community colleges and the universities. (Students who complete appropriate prerequisites at a local CC with the required GPA are guaranteed UC admission as junior transfers, generally with the CC’s funneling students to geographically closest campus.)</p>

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<p>Ohio’s public universities may not have the “cachet” of other states but DAAP is very highly regarded and taxguy’s D is in the arts there. Their interior design department is consistently ranked #1 in the country. If they make it possible to do what he did, they must be OK with that. In my experience, the universities want the diversity of students and they want the best students to be able to come regardless of their state of origin. It’s the state residents (and politicians) who want the limits. </p>

<p>I’m not saying one way is better than the other - I live in a rather neutral state and none of my kids - so far - has gone to a public U although one has received a grant for staying in the state. </p>

<p>I even remember seeing a how-to on becoming a resident for the purposes on in-state tuition for graduate students on a university’s web site!</p>

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<p>California is very happy to have independent graduate students establish residency - it may even be a UC web site where you saw those instructions. </p>

<p>But the financial aid landscape is very different for grad school. Typically a university is funding its Ph.D. students, so the tuition-paying students are pursuing master’s or professional degrees. At the UC’s, graduate level tuition for residents is quite high, especially for the professional degrees. The graduate focus is not so much on in-staters – there is much more geographic diversity at the graduate level. Most students really are living independently at that point – and grad students are probably somewhat more likely to remain in the state where they received their degrees post-graduation, given that their education is likely to be closely tied to closely to career employment.</p>

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<p>And I would think UC would not have much problem finding OOS students then to attend their undergraduate DAAP programs since they are so highly regarded, at full OOS rates. Many parents and families seek out good programs and end having to pay either OOS rates or private tuition if their kid prefers a school or program not in their own state.</p>

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<p>First, my daughter chose University of Cincinnati. I in no way pressured her to go there. She chose it for several reasons:</p>

<p>First, they had the program in digital design that wasn’t available at the time in any Maryland state university! It also helped that she was majoring in a subject that was deemed primarily male dominated.</p>

<p>Second, they had a very strong coop program</p>

<p>Third: The Maryland delegate scholarship AT THE TIME allowed payments for majors not offered by a MARYLAND STATE UNIVERSITY. If it were offered by a private school in Maryland,which to my knowledge was not the case, it wouldn’t matter. It is what is offered by Maryland state universities, which is the crucial point.</p>

<p>Fourth: The Delegate scholarship was awarded with full knowledge that she was attending college out of state because it wasn’t offered here.
I don’t know why so much anger is generated towards me. I never did anything illegal or even against any rules. Everything I did was fully disclosed. I even hinted on this site in some prior posts that I found a way to get instate tuition. If people were interested, they could PM me. I did help tell a few people what I was doing and did in fact help a few get instate status.
Frankly, this whole thread has annoyed me. I have been very giving as to my knowledge and techniques. If I am going to be cross examined or flamed, I will simply stop giving out advice!</p>

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I don’t think that was in question. People were wondering how she was able to qualify for that scholarship if she was a resident of Ohio. Was it just for the first year, before the residency change went through?

I don’t agree with the judgmental reaction you’ve gotten from some posters but I don’t think you should be so surprised at getting some pushback, either. Publicizing your actions is going to open them up for criticism.</p>

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<p>And taxguy, for me at least, I’m not really so much angry but still confused. If this program was so appealing to your daughter and you did not get merit or need based aid from Cincinnati, why not just pay the going OOS rate that you seem to have been capable of doing? Why the elaborate plan to get instate rates? Seems like the university and Ohio left 10’s of thousands of dollars of your money on the table. I hope my state of Virginia and my kids’ public schools there are not doing that.</p>

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<p>Taxguy, the reason for the pushback is that your daughter is not truly “independent” and living on her own. Ohio law requires that the student be “financially self-sustaining” for 12 continuous months, and that the student cannot be receiving “financial assistance for expenses from someone else.” It does not appear that your daughter had a job in Ohio that was enough to support her and also pay for her first year of college, so it looks like you funded your daughter, but apparently gave her the funding as lump sum in advance, as opposed to a monthly allowance or making direct payments to the school on her behalf. </p>

<p>Now maybe your daughter had a large amount of assets accumulated in a UGMA account that was turned over to her at age 18, and that is the source of her support. I suppose that would come within the letter of Ohio law, because legally the UGMA money belongs to the child, not the parent. But you didn’t say that was the source of the money. </p>

<p>If in fact that is the case – then your advice is not particularly useful to ordinary people who have not managed to save up large nest eggs of cash in their children’s names. If, on the other hand, you are accomplishing this by also regularly gifting your daughter with more funds, then you would be skirting the clear intent of the law. You probably are dealing with a bureaucrat in Ohio who is not going to ask your daughter where she got the money in her bank account – so of course your scheme works – but whether you are aware of it or not, when you put that out for others to consider, you are simply flaunting your wealth, showing one more way that rich people can get away with paying less for the same services than poor people pay. (Because the rest of us don’t have the cash to enable us to fund our kids to be “independent” at age 18). </p>

<p>So yes, when you flaunt your wealth, you will get push back. You’re a “tax” guy so you are probably also quite adept at finding tax-free investments and tax shelters – but you are clearly not a “people” guy, because if you were, you would understand why boasting about all of that to people whose income comes mostly from highly taxed earnings tends to evoke negative reactions.</p>