[Sea Warrior]

Why not just have one tuition? As far as economics it makes no sense. Political BS is everywhere.

[Milton Miteybad]

Because state universities are chartered primarily for the benefit of (and financed primarily by) the citizens of that particular state. In-state tuition rates are lower because it is assumed that the parents of a resident of that state are already contributing to the state tax base. In contrast, a non-resident student (a youngster from Connecticut wants to attend the University of Tennessee at Knoxville, for instance) is charged a higher tuition because his parents are NOT residents of Tennessee, and as such, do not directly contribute to the state tax base.

And that's why you have in-state and out-of-state tuition rates.