Save money on in-state tuition? Not so fast…

by Lynn B. Johnson on March 21, 2014

TuitionMy friend Kathy was living in New England when her 18-year-old son, Scott, decided to attend a four-year college in a neighboring state. Scott’s grandparents lived in the town where his college was located, so Kathy, Scott, and the grandparents decided that it would be most prudent for Scott to live with his grandparents through his freshman year of college.

Once Scott had lived with his grandparents for 12 months, he would be eligible for tuition at the in-state rate. This would equate to nearly $10,000 dollars for each of Scott’s sophomore, junior, and senior years.

Everything was going great. His grandparents were happy to have him around: as well they should, Scott being a fine and upstanding young man. Kathy was happy that family was looking out for her son. Scott was happy enough to live in a home environment while looking forward to the massive tuition savings once he’d established his permanent home.

After a year in his new home, Scott registered for residency in his new hometown and was denied.

It turns out that his college —and many, many others— have stringent guidelines as to what constitutes a resident. Although Scott lived in his new state for “12 months or more,” his request for residency was denied because Kathy claimed him as a dependent on her income taxes for tax year 2012.

Scott’s college is very strict in following the letter of the following residency summary:

Generally, an unemancipated student’s state of residency is considered the same as that of his or her custodial parent(s) or legal guardian(s). All other persons shall be presumed to be out-of-state residents for such purpose, unless domiciliary status is demonstrated in accordance with guidelines adopted by the University.

The fact that Scott was 18 years old when he started college does not equate to emancipation. Colleges often do not consider students officially emancipated until they are 22 years of age or older.

And although Kathy has since moved out of the country to teach English, and the home where Scott resides with his grandparents is his only domicile, he is out of luck for in-state tuition this year because he is unemancipated.

Many colleges will not allow students to become eligible for in-state tuition until they have been emancipated for one year. Scott will not qualify for in-state tuition until:

  1. his parent no longer supports him financially
  2.  
  3. his parent no longer claims him as a dependent on her income-tax returns
  4.  
  5. he is able to meet his financial obligations without help from another individual.

People under the age of 22 are not the only people to be affected by this. My husband pursued a PhD at a New England college, but because we had not “lived in [the state] as a ‘traditional resident’ (not a student) for twelve continuous months immediately preceding… enrollment or reenrollment,” we never qualified for in-state tuition, even though he studied there for six years and we were grown, fiscally responsible adults the whole time.

As such: if you have a child headed out-of-state for college this year, read the residency policy of that child’s chosen institute of higher education very, very carefully. Think about how best to meet residency and emancipation requirements in the manner in which best suits your family and your budget.

Kind of makes that local community college sound better and better, doesn’t it?

Discussion

Millennial Moola
Didn't know that dependency claim knocks off the ability to use in state residence. Makes a huge difference in Florida. In-state tuition is only around $6,000 a year
June 21 at 14:13 pm
Christopher Lee
Thank you for informing us on this. Great articlennChrisnOwner CEL Financial Services nhttp://www.taxprepfillmore.com/santa-paula-tax-preparationn
April 24 at 23:13 pm

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