Why Is Out-of-State Tuition More Expensive?

There is no definitive reason why out-of-state tuition is more expensive, but the majority assumption is that public colleges and universities receive tax subsidies for in-state students. The subsidies the colleges receive are passed down through college savings for in-state students, but out-of-state students pay more because there are no financial gains for the university for out-of-state students.

Another assumption is that state colleges and universities want to attract students who are more likely to remain in the state and contribute to the state's economic stability after graduation. Out-of-state students have a higher probability of leaving the state upon graduation, while home-state students will often stay and begin working in the state.