Public Universities Increasingly Pursue Out-of-State Students

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America’s public state universities were established primarily to serve the residents of their respective states, but recent findings show that state institutions are increasingly appealing to out-of-state students. Opponents of this practice have concerns that certain in-state applicants are being neglected and left behind. An analysis of 100 state universities, including the flagship institution of each state and one additional prominent public university, shows that from 2004 to 2014, 74 saw declines in in-state freshmen as a share of total enrollment.1

  • The largest decrease of in-state freshmen, from 72 percent to 36 percent, was at the University of Alabama.1
  • Seven schools saw similar declines of 20 percent or more: University of California-Berkeley, University of California, Los Angeles, Idaho State University, and the universities of South Carolina, Missouri, Oregon and Arkansas.1
  • Ten schools saw declines between 15 and 19 percent: Michigan State, Ohio State, Purdue, Stony Brook, Colorado School of Mines, and the universities of Illinois, Iowa, Kentucky, Maine and Washington. 1
  • At the universities of Alabama, Iowa, Michigan and New Hampshire, more than half of all students were non-residents in the 2015-2016 academic year.2
  • Seventy-one percent of all students at the University of Vermont and 70 percent of all students at the University of Massachusetts were non-residents in the 2015-2016 academic year.2

Over roughly the same period, public university revenue sources have changed significantly as well. Parents and students increasingly shoulder a heavier burden of college costs through higher tuition than in previous decades. A Government Accountability Office report found that from 2003 to 2012, public university revenue from state funding decreased from 32 percent to 23 percent, while tuition as a percentage of public university revenue rose from 17 percent to 25 percent.3

As some state governments make the difficult decision to cut funding to public universities to shore up budget shortfalls, schools are left searching for other ways to generate revenue. One popular method has been to increase the enrollment of out-of-state students, who often pay two to three times the amount of in-state students. In this effort to generate more revenue, public universities are participants in what some call an “arms race” for non-residents, in which schools compete to recruit and offer increasingly more merit aid to prospective out-of-state students.4 Even after state schools offer substantial merit scholarships to non-residents, the universities still often receive more in net tuition revenue than they would from in-state students.

  • The University of Massachusetts awarded $22 million in merit aid to out-of-state students in 2015, compared to only $9.9 million in merit aid to their in-state peers.5
  • The University of Arkansas offers “New Arkansan” scholarships to non-resident students that help pay for part of the out-of-state tuition premium.
  • Whereas in previous decades the trend was reversed, four-year public universities now offer more in total merit aid than in total need-based aid.4

University officials and other supporters of these changes maintain that they are tough consequences of external forces. 

  • As many states experience budgetary shortfalls, state funding for public universities has been cut significantly.6
  • Although the number of in-state students as a percentage of the total student population has decreased in many states, the actual number of in-state students at many public universities has increased.7
  • No state has deemed higher education a constitutional right, so maintaining or raising funding levels may not always be a politically viable option.6 
  • Out-of-state students pay more in tuition and may allow states to accept more in-state students despite decreased funding from state governments.7 
  • When state funding is cut, public universities suggest that decisions must be made to either raise tuition, accept more out-of-state students, or compromise the high-quality of education that students and their families expect of their state universities.7,8
  • Accepting more out-of-state students could serve as a tool to combat negative, long-term demographic trends. For example, Wisconsin is projecting decreases in high school graduates and working-age residents in the coming decades, so the state is attempting to attract out-of-state students to fill these projected workforce gaps.9

Opponents of these changes voice concerns that state universities are neglecting many in-state students.

  • State universities were established to serve primarily in-state students. In the past, this was evident from more stringent admission requirements for non-residents. Research has shown that in some states, in-state students have effectively lost this advantage.10
  • Rising percentages of out-of-state students can crowd out in-state applicants and prevent them from attending their campus of choice.11 
  • In-state students more often stay in state after graduation and contribute to the local economy.12 
  • The focus on recruiting non-resident students negatively affects low-income and minority students in particular.
  • Research has shown, controlling for a variety of factors, that a correlation exists between the increase in out-of-state students and a decrease in African American, Latino and low-income in-state students.13

Some states are trying to control rising non-resident admissions by establishing a cap that limits the percentage of non-resident students at their respective public universities. North Carolina is one such state that has long held such restrictions, limiting public universities to enrolling, at most, 18 percent out-of-state freshmen.4 In June 2016, the California General Assembly passed legislation that would limit nonresident freshman enrollment to 10 percent.14 Other states, however, have raised the cap or removed it entirely due to state funding cuts. In 2015, the University of Wisconsin Board of Regents approved the removal of a previous 27.5 percent cap on out-of-state freshmen at the state’s flagship institution in Madison, provided that the school enrolls at least 3,600 students from Wisconsin each year.15


References:

1 Anderson, Nick and Elliott, Kennedy. “At ‘State U.,’ a surge of students from out of state.” The Washington Post. Jan. 26, 2016. 
2 Chieppo, Charles. “Public Higher Ed’s In-State/Out-of-State Dilemma.” Governing. May 19, 2016. 
3 Emrey-Arras, Melissa et al. “Higher Education: State Funding Trends and Policies on Affordability.” U.S. Government Accountability Office. Dec. 16, 2014. 
4 Burd, Stephen. “The Out-of-State Student Arms Race.” New America. May 18, 2015. 
5 Krantz, Laura. “UMass Targets Out-of-State Students with Merit Money.” The Boston Globe. May 29, 2016. 
6 Johnson, Hans. “State Universities Are in a Budgetary Bind.” The New York Times. Apr. 11, 2016. 
7 Watanabe, Teresa. “UC Schools Harm Local Students by Admitting So Many from Out of State, Audit Finds.” Los Angeles Times. Mar. 29, 2016. 
8 Phillips, Erica E. and Belkin, Douglas. “Colleges’ Wider Search for Applicants Crowds Out Local Students.” The Wall Street Journal. Oct. 8, 2016. 
9 Palasz, Emma. “Resolution Could End Out-of-State Acceptance Limits.” The Badger Herald. Oct. 2, 2015. 
10 Blume, Grant and Roza, Marguerite. “Are Residents Losing Their Edge in Public University Admissions? The Case at the University of Washington.” The University of Washington Center on Reinventing
Public Education. Dec. 2012. 
11 Cuevas, Paolina. “State Institutions Should Serve In-State Residents.” The New York Times. Apr. 11, 2016. 
12 Roza, Marguerite. “Public Universities Must Not Solve Budget Gaps by Limiting Access to In-State Students.” The New York Times. Apr. 11, 2016. 
13 Jaquette, Ozan et al. “Tuition Rich, Mission Poor: Nonresident Enrollment Growth and the Socioeconomic and Racial Composition of Public Research Universities.” The Journal of Higher Education.
Mar. 2015. 
14 McGreevy, Patrick. “State Lawmakers Vote to Cap Nonresident Enrollment at UC Schools.” Los Angeles Times. Jun. 13, 2016. 
15 “Regents Approve Lifting Cap on Out-of-State Students at UW-Madison.” The University of Wisconsin System. Oct. 9, 2015. 

Public Universities Increasingly Pursue Out-of-State Students