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Stopping a Shortcut to In-State Tuition

April 1, 2014

In a tit-for-tat with two companies that helped out-of-state students pay much lower in-state rates, the University of Colorado system changed its tuition policy.

The change, made last fall, has put one of the two companies out of business and may be forcing a change in tactics by the second. Both companies, Tuition Specialists and In-State Angels, promised to help parents and students save thousands of dollars by getting in-state tuition for nonresident students.

Both companies are based in Boulder and share the unusual business model. It’s so unusual that Tuition Specialists, founded in 2007, sued In-State Angels, founded in 2011, for stealing its idea.

The idea? “At Tuition Specialists we pave your road to in-state tuition,” claims the older of the two companies.

“Get In-State Tuition: Fast, Simple, Certain,” says the other.

This year, an in-state student at the University of Colorado's flagship campus at Boulder would pay less than $25,000; an out-of-state student would pay more than $46,000.

A Colorado system spokesman, Ken McConnellogue, said the companies were finding enough customers to catch the system’s eye. They were, McConnellogue said, helping students claim they were emancipated from their parents, a status that would make it easier for students coming from out of state to qualify for in-state tuition in Colorado.

Among the tactics the companies used were having family friends appear to be providing support for students – so that parents weren’t footing the bill – and setting up trusts for students, he said.

McConnellogue said the university system changed its policies to ask students asserting that they were emancipated to provide more proof that they were no longer receiving any support from their parents. Such proof would include bank account information or tax returns.

“As we look at it, we’re really trying to keep honest people honest,” he said.

The changes were announced to students last fall. The two companies were not happy with the change, nor were some of the parents who signed up for the service, McConnellogue said.

Now, Tuition Specialists is no longer in business, according to two company officials.

“We do take the stance that what the university chose to do at CU is not in the best interest of their students, but otherwise have no comment,” said Will Seamans, who helped incorporate the company in 2007.

In late 2012, the company’s then-chief financial officer said in an online presentation that the company was committed to “saving students $50 million by the end of 2015.”

The other business, In-State Angels, remains in business and has been trying to drum up support by emailing admissions counselors. In a recent Facebook post, the company says it has worked with students attending 80 universities across the country.

The company’s founder, Jacob Wells, did not respond to a telephone message left with an assistant last week or an email on Monday.

In-State Angels may have more tools in its toolbox than just having students claim they are emancipated from their parents. An online form asks students if they are willing to a take a year off after high school, forgo living in dorms, or go to school part-time in order to help qualify for in-state residency.

It’s not clear how much the services charge, but McConnellogue said it was his understanding customers were billed a percentage of the savings they received from paying lower tuition rates.

Students trying to duck paying out-of-state tuition are a concern to the university’s Boulder campus because the legislature caps out-of-state enrollment and because Colorado’s state subsidy per student is one of the lowest in the country. Students paying the higher out-of-state tuition help keep in-state tuition from going sky-high, McConnellogue said.

 

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