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A new federal law requires public colleges and universities to offer in-state tuition to students from three counties that are considered freely associated states.


Students from Micronesia, the Marshall Islands and Palau will get in-state tuition at any public college or university in the United States starting July 1, following a change in federal law that some college leaders say sets a worrying precedent for Congressional interference in state matters. 

The islands in the Pacific Ocean are considered freely associated states, a status that’s similar to U.S. territory and confers some benefits to those countries and their citizens. Combined, the three are home to about 200,000 residents, so the financial impact on U.S. colleges should be minimal. Still, some college leaders say the law amounts to an unfunded mandate that will force public institutions to find a way to make up the financial difference.

Extending in-state tuition to students from the freely associated states represents new territory in what is a relatively recent policy trend. In 2014, Congress began requiring states to provide in-state tuition to veterans—a move public colleges opposed—and later extended the cheaper tuition rate to foreign service members and their families. The law for foreign service members passed in December 2021 and is also set to take effect this summer.

“Federal lawmakers should support students with federal benefits and appropriately leave it to states to make their determinations on awarding state benefits,” said Craig Lindwarm, senior vice president of governmental affairs at the Association of Public and Land-grant Universities. “It’s wholly inappropriate for the federal government to dictate to states populations of students to receive state tuition. The slope is extremely slippery to eradicate state discretion in determining state tuition policies.”

The new policy mandating in-state tuition for students from freely associated states was quietly included in the federal budget for fiscal year 2024, which passed in March. It came as a surprise to some higher education associations, and it’s unclear who pushed for it on Capitol Hill. It received little to no public discussion until an April 29 online announcement from the Office of Federal Student Aid. 

Ray Rodrigues, chancellor for the State University System of Florida, raised the alarm at a board meeting earlier this month, WUFT reported

“This is the first time we’ve been able to find where the federal government has infringed upon state sovereignty in determining who qualifies and does not qualify for in-state tuition,” Rodrigues told the system’s Board of Governors. 

Rodrigues said he’s talked with other state chancellors about the change and has threatened legal action. 

“We are consulting with one of the top constitutional law firms in the nation to see if there is grounds for us to challenge this,” he said.

Florida state system administrators declined to comment beyond the discussion at the board meeting. 

‘A Deeply Troubling Precedent’

Colleges that don’t comply risk losing access to federal financial aid; the law makes offering in-state tuition to students from the freely associated states a condition of eligibility for the funds.

“We don’t support Congress requiring institutions or states to set tuition policy as a matter of public policy,” David Baime, senior vice president for government relations at the American Association of Community Colleges. “It’s a deeply troubling precedent.”

Unlike with previous laws mandating in-state tuition, colleges aren’t getting much time to adapt to the change. Congress amended the Higher Education Act of 1965 in March, when it passed a set of spending bills for fiscal year 2024, which were then signed into law; the change is expected to take place this summer. But the compressed timeline could make it complicated for some colleges whose tuition policies are set by state lawmakers.

The latest budget also clarified that all citizens of the freely associated states are eligible to receive Pell grants, federal work study and federal supplemental education opportunity grants, which provide very low-income students with direct cash payments. Institutions in those countries are also eligible to participate in the three programs. Students from the freely associated states remain ineligible for federal student loans.

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