Every spring I talk to a Chicago-area family holding a scholarship letter from a big public university several states away. The student is flattered. The parents see a five-figure award and assume they are getting a deal. Sometimes they are. Usually they have not yet compared it to anything.
Jeffrey Selingo explained how this market works in The New Yorker, in a piece drawn from his book Dream School. Anyone with an out-of-state flagship on the list should read it. Here is what I took from it and how I use it with students.
What Selingo reports
After two recessions cut state funding, flagship universities needed revenue. Raising in-state tuition too far angers legislators. Out-of-state students can be charged roughly double, so that is who the universities went after.
The shift he documents is large. Citing federal data, he reports that the University of Alabama went from 23% out-of-state among new undergraduates in 2002 to 65% in 2022. South Carolina, Oregon, Oklahoma and Wisconsin moved the same direction. At the average flagship, he writes, nearly four in ten undergraduates now come from another state. Researchers call it the Great Student Swap: Illinois students go to Missouri, New Jersey students go to Penn State, and each pays the nonresident price.
He also describes where Alabama recruits: prosperous suburbs where the in-state flagship is hard to get into, and metro areas where its price looks reasonable next to private colleges. He names Chicago. By 2022, Illinois was among Alabama’s top sources of out-of-state students.
His verdict on the typical full-pay student is blunt. They are paying twice as much, he writes, “for a similar product.”
The scholarship is a price, not a prize
This is where families misread the letter. Selingo reports that Alabama spent $185.4 million on merit aid in 2023-24, more than twice what it spent on need-based aid. That money exists because out-of-state tuition funds it. A merit award from an out-of-state flagship is a discount on a price that was set high in the first place.
Alabama’s published 2026-27 cost of attendance is $35,392 for residents and $60,400 for nonresidents living on campus. A $15,000 scholarship to a nonresident still leaves a bill about $10,000 a year above what an Alabama resident pays with no award at all. The award is real money. It is also a pricing decision, and the comparison that matters is the net price against your own state flagship and every other offer on the table.
When it is a good deal
I do not tell students to avoid these schools. Selingo tells the story of a Pennsylvania student with near-perfect stats who was rejected early by the University of Chicago, applied to the University of Mississippi mostly to satisfy her mother, and ended up with a full ride, an honors college, and funding for research and study abroad. Rice and Vanderbilt admitted her later with weaker packages. She chose Mississippi. When she listed the reasons to pick Rice, the only one she could find was what the name would signal to other people.
That is the version of this trade that works. Universities spend their biggest awards on the students at the top of their applicant pool. If your student is that applicant, an honors college with a full ride can beat a famous name at full price. If your student is in the middle of the pool, your family is the one funding those awards.
The leverage is moving toward families
The last part of the article matters most for students applying now. Selingo reports that this fall’s freshman class may be the last large one for years, because of falling birth rates and fewer graduates choosing college. Only the South will see growth in high school graduates. International enrollment is projected to drop sharply as well.
Universities that built budgets on nonresident tuition will be competing for fewer students. That means better offers for the students they want, and more room to ask for one.
What I tell students
Run the net price calculator at every public university on the list before applying, including your own flagship. Apply early enough to be considered for the top scholarships, because those interviews start before most admissions decisions arrive. When the offers come in, put the four-year net cost of each on one page, along with what the student would do there. Then decide.
An out-of-state flagship should be on the list because of what the student will do there and what it will cost. The size of the scholarship in the letter is not a reason.
