Those NY contract college students who would see a net price after financial aid higher than $50,869 as non-NY residents would be the ones getting a discount if they were NY residents. It is true that it takes a very high family income to get to the point of receiving financial aid, but with a non-NY-resident net price greater than $50,869, although it does not mean that only full pay students will see a different price for NY versus non-NY residency.
For example, Cornell’s NPC says that for a student with married parents and no siblings, with each parent earning $125,000 (total $250,000), no other income or assets, the net price is $62,235 after subtracting some grants from the list price. This is higher than the NY resident list price, so if the student were a NY resident in one of the NY contract colleges, s/he would pay the NY resident list price which is lower.
Note that about 51% of Cornell students are non-financial aid (i.e. full pay) students, so that the NY resident tuition discount would be relevant for those who enroll in the NY contract colleges.
Most private schools charge the same tuition, fees (other than course fees), room and board (for the same room/meal plan) to an instate and OOS student.
But for the instate student there might be several advantages in going to a private instate school:
Being able to qualify for state aid
More likely that insurance coverage is accepted by school
Transportation costs most likely lower
If they get scholarships and grants above tuition, fees and books, then they won’t have to pay taxes in the other state in addition to their own state.
Taxable scholarships would not be taxed by two different states. (Or, at least the state of residency would provide a credit for the tax paid to another jurisdiction.)
My kids both go to school in states without a state income tax, so there is no ‘credit’ from another state for income earned there or for scholarships used there. Even though there are no income taxes doesn’t mean they don’t pay some taxes as everything else is taxed - gas, sales, services, licensing, tickets - at a higher rate than the state with income taxes.
My post was referencing a situation where both the state of residency and the state where the school is located have a state income tax, because this is the situation that mommdc was addressing.
@ucbalumnus You’re right. I used the wrong term. Thank you for that impressive analysis. “Only” is too broad. And the Admissions Officers clearly spoke too loosely as well. The right therm is “pretty darn near everyone except the really wealthy.”