My grandson lives with me in Pennsylvania and has since his birth. His father lives in NJ and will fill out his FAFSA since I cannot. Would my grandson be an instate student for Pennsylvania or New Jersey?
New Jersey.
However, look to see if PA has rules that if a student goes to high school in PA then he qualifies for instate rates.
Be aware that PA schools give LOUSY aid, so it may be better for him to go to school as an instate NJ student if he can. NJ does give state aid.
Residency is tied to that of the parents.
Ok, thank you.
Where is his HS?
Go here for the Penn State residency rules http://bulletins.psu.edu/bulletins/bluebook/general_information.cfm?section=Tuition2 Though the presumption is that the child has the same residency as the parents, that is not an iron-clad rule and may depend on circumstances. I am assuming you are not his legally appointed guardian (in which case he would definitely be considered a PA resident) but you may be able to establish a basis to get PA residency since he has lived with you since birth.
Be sure to check the NJ rules as well.
Thank you all. I just spoke with the PA School System of Higher Education and they tell me since he lives and goes to school in PA he would be considered a PA instate student. It doesn’t matter what state is parent resides.
Thanks, @Pallen, for getting back to us. It may be helpful for future students. 
@pallen Yes, in some states a high school student will be considered instate for tuition purposes.
HOWEVER, PA has very expensive instate rates, so even if the father is low income, the most aid the child would get is about $5700 in free aid, and the rest loans and a big gap.
Run the NPC on PA schools’ websites using your son’s basic info.
if your son can’t pay much towards college, then instate PA may not be affordable.
I agree that PA state schools don’t give the best aid, but low income students can receive Pell (up to $5775 this year), PHEAA grant (~$4000), SEOG, work study, and student loans,. My son with very average stats was offered all of these at IUP this year. Higher stats students may do better at the many fine private colleges and universities in Pennsylvania.
For privates, residency doesn’t matter much, if at all.
So student lives with you since birth but you are not the legal guardian? That would make a difference in student being independent for aid.
Here is the policy at Rutgers, the state university of New Jersey:
http://nbregistrar.rutgers.edu/forms/ResidencyPolicy.pdf