In-State versus Out-of-State Students: The Divergence of Interest between Public Universities and State Governments
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This paper examines the divergence of interest between universities and state governments concerning standards for admitting in-state versus out-of-state students. We find that public universities set lower minimum admissions standards for in-state than out-of-state applicants, presumably in response to state pressure; while private universities treat both groups equally. However, we also find that favoring in-state applicants goes against states’ long-term financial interest. This is because marginal out-of-state students pay higher tuition than marginal in-state students, pay more in future state taxes, and are equally influenced in whether they locate in the state after graduation by attending public university there.
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public universities; private universities; state governments; location choice; state taxes; regional development
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Required Publisher Statement: Published by the Cornell Higher Education Research Institute, Cornell University.