As tuition fees continue to soar, even high-net-worth families in the United States are finding themselves strategizing new ways to cut down the overwhelming cost of higher education. One increasingly popular approach? Purchasing out-of-state property solely to establish residency and qualify for in-state tuition discounts at top public universities.
This isn’t just theoretical—it’s already playing out in real-life scenarios across the country.
Take, for example, a California family who spent roughly $300,000 on a two-bedroom home in Florida, near the University of Florida campus. Their motivation wasn’t a vacation getaway or retirement planning—it was tuition. By living in the home for 12 consecutive months before their child’s enrollment, the student qualified as a Florida resident. That brought their yearly tuition from $28,600 down to $6,400, saving $88,000 over four years—almost enough to cover the cost of the property itself.
A similar move was made by a Massachusetts couple, who purchased a $250,000 condo in Houston, Texas, so their daughter could claim in-state status at one of several prestigious Texas universities. The tuition savings alone—about $16,500 annually—added up to $66,000 over four years. Add to that the potential property appreciation and rental income in a booming college town, and the move becomes a savvy investment.
Connecticut offers another case study. While Ivy League Yale University doesn't offer in-state discounts, the University of Connecticut (UConn) does. Families relocating from New York to Connecticut have reported buying homes worth $400,000 to $500,000 near UConn’s main campus in Storrs. The payoff? A reduction in tuition from $39,700 to $17,000 annually. Once again, the math adds up in favor of property overpayments.
As this trend grows, real estate agents are evolving into education consultants. Agents like Erwin Nicholas in Houston are not only finding homes for high-net-worth clients, but also advising them on the ins and outs of tuition residency requirements. "More than half of my clients move here for educational reasons," says Nicholas, a former middle school teacher. "Families are realizing that real estate isn’t just about location—it’s about tuition strategy."
And make no mistake, the discounts can be dramatic. According to the Education Data Initiative, the average out-of-state tuition for a four-year public college in the U.S. is $28,297, compared to just $9,750 for in-state students. Some states offer even greater disparity:
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Florida: $28,658 (out-of-state) vs. $6,380 (in-state) — a 77% discount
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Texas: $24,743 vs. $8,195 — a 67% discount
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Connecticut: $37,907 vs. $15,763 — more than 58% off
In competitive college towns like Houston, where Rice University, University of Houston, and Texas A&M draw thousands of applicants each year, homes sell 35% faster than the national average. Realtor.com data reports that listings near top universities spend a median of just 46 days on the market. As families from California, Georgia, and South Carolina pour in, bidding wars have become increasingly common for properties within school zones.
Still, there’s a catch. Each state sets its own strict residency requirements. Most, including Florida and Texas, demand 12 months of physical presence prior to enrollment. Applicants often need to show tax records, driver’s licenses, utility bills, and even voter registration to prove legitimate intent to reside—not just tuition tourism. Fail to meet these standards, and families may find themselves paying out-of-state rates despite owning a home.
Then there’s the investment angle. Homes in college areas tend to appreciate faster and rent out easily, making them attractive long-term assets. But buyers must consider hidden costs: property taxes, insurance, HOA fees, maintenance, and potential legal hurdles if the property is not genuinely occupied.
Interestingly, this real estate-driven tuition strategy isn’t limited to undergraduate families. Graduate students, law school applicants, and medical school hopefuls are also following suit. In states like Pennsylvania and Michigan, where flagship universities carry hefty out-of-state fees, families are snapping up real estate a year or more in advance to ensure residency status for grad school.
This behavior has not gone unnoticed by policymakers. Some state governments have begun reassessing their residency rules, fearing that tuition-driven relocation may strain resources meant for genuine long-term residents. Proposed reforms include tying residency to employment history, public school attendance, and community involvement, raising the bar for out-of-staters looking for a tuition loophole.
Critics argue that while this “buy-to-save” approach works for the wealthy, it further exacerbates educational inequality. Advocacy groups point out that low-income families lack the means to participate in this strategy, while rising demand in college towns could inflate local housing prices and price out native residents.
Still, for now, this workaround is proving too financially attractive for many families to ignore. With higher education costs hitting six-figure totals and student debt reaching unsustainable levels, affluent parents are beginning to see real estate not just as property—but as policy.
They’re hiring Realtors who double as admissions strategists, analyzing tax laws with financial advisors, and preparing documentation well in advance of their child’s freshman year. In doing so, they’re turning tuition planning into a full-blown investment strategy.
Whether this trend becomes the norm or prompts regulatory backlash remains to be seen. But one thing is clear: in the age of $50,000-per-year college tuition, even the wealthy are looking for a discount—and they’re willing to move to get it.