Why can colleges &quot;discriminate&quot; against students from other states by charging them more?
<p>The Constitution states that the federal government has the right to regulate commerce between the states. As shown in Gibbons v. Ogden; Heart of Atlanta Motel, Inc. v. U.S.; Katzenback v. McClung; West Lynn Creamery v. Healy, etc., essentially anything relating to other states is subject to the Commerce clause. As the American Bar site says:</p>

<blockquote>
  <p>The Court ruled in Heart of Atlanta Motel, Inc. v. U.S. (1964) that Congress had plenty of authority under the Commerce Clause to ban racial discrimination at the hotel because the hotel catered to interstate travel­ers and it therefore affected interstate commerce. The Court ruled the same day in Katzenbach v. McClung (1964) that Congress had plenty of authority under the Commerce Clause to ban racial discrimination at Ollie’s Barbecue because a good portion of the food used by the restaurant was imported from out of state, and the restaurant therefore affected interstate commerce.</p>
</blockquote>

<p>This shows how almost anything serving someone from out-of-state relates to the Commerce clause. So colleges are subject to the Commerce clause. <strong>Why are colleges allowed to charge out-of-state students tens of thousands more for college, constitutionally?</strong></p>

<p>There are two constitutional doctrines that prohibit discrimination based upon state of residence.</p>

<p>One is the <a href="https://en.wikipedia.org/wiki/Dormant_Commerce_Clause" rel="nofollow noreferrer">dormant commerce clause</a> (a court created doctrine) and the other is <a href="https://en.wikipedia.org/wiki/Privileges_and_Immunities_Clause" rel="nofollow noreferrer">the privileges and immunities clause</a>. There are actually two privileges and immunities clauses, one in Article IV, Section 2, Clause 1, which states:</p>

<blockquote>
  <p>The Citizens of each State shall be entitled to all Privileges and
  Immunities of Citizens in the several States.</p>
</blockquote>

<p>and the other in Section 1 of the 14th Amendment which states:</p>

<blockquote>
  <p>All persons born or naturalized in the United States, and subject to
  the jurisdiction thereof, are citizens of the United States and of the
  state wherein they reside. <strong>No state shall make or enforce any law
  which shall abridge the privileges or immunities of citizens of the
  United States;</strong> nor shall any state deprive any person of life,
  liberty, or property, without due process of law; nor deny to any
  person within its jurisdiction the equal protection of the laws.</p>
</blockquote>

<p>Some of the leading privilege and immunities cases are reviewed <a href="http://law2.umkc.edu/faculty/projects/ftrials/conlaw/newresidents.htm" rel="nofollow noreferrer">here</a>. </p>

<p>With respect to the dormant commerce clause, per the link above:</p>

<blockquote>
  <p>[I]n a dormant Commerce Clause case, a court is initially concerned
  with whether the law facially discriminates against out-of-state
  actors or has the effect of favoring in-state economic interests over
  out-of-state interests. Discriminatory laws motivated by "simple
  economic protectionism" are subject to a "virtually per se rule of
  invalidity," <em>City of Philadelphia v. New Jersey</em>, 437 U.S. 617
  (1978), <em>Dean Milk Co. v. City of Madison, Wisconsin</em>, 340 U.S. 349
  (1951), <em>Hunt v. Washington State Apple Advertising Comm.</em>, 432 U.S.
  333 (1977) which can only be overcome by a showing that the State has
  no other means to advance a legitimate local purpose, <em>Maine v.
  Taylor</em>, 477 U.S. 131(1986). <em>See also Brown-Forman Distillers v. New
  York State Liquor Authority</em>, 476 U.S. 573 (1986).</p>
</blockquote>

<p>Notwithstanding these constitutional protections against discrimination based upon state residence, the U.S. Supreme Court held that this discrimination is constitutional in the case <em>Vlandis v. Kline</em>, <a href="http://caselaw.findlaw.com/us-supreme-court/412/441.html" rel="nofollow noreferrer">412 U.S. 441</a> (1973) and reaffirmed the continuing vitality of that decision in <em><a href="http://law2.umkc.edu/faculty/projects/ftrials/conlaw/saenz.html" rel="nofollow noreferrer">Saenz v. Roe</a></em>, 526 U.S. 489 (1999). The majority opinion in <em>Vlandis v. Kline</em> explains this authority was basically undisputed at that time:</p>

<blockquote>
  <p>The appellees do not challenge, nor did the District Court invalidate,
  the option of the State to classify students as resident and
  nonresident students, thereby obligating nonresident students to pay
  higher tuition and fees than do bona fide residents. The State's right
  to make such a classification is unquestioned here.</p>
</blockquote>

<p>Some of the justification is set forth in the <em>Saenz v. Roe</em> (1999) decision which states:</p>

<blockquote>
  <p>The second component of the right to travel is, however, expressly
  protected by the text of the Constitution. The first sentence of
  Article IV, § 2, provides: "The Citizens of each State shall be
  entitled to all Privileges and Immunities of Citizens in the several
  States." Thus, by virtue of a person's state citizenship, a citizen of
  one State who travels in other States, intending to return home at the
  end of his journey, is entitled to enjoy the "Privileges and
  Immunities of Citizens in the several States" that he visits.  This
  provision removes "from the citizens of each State the disabilities of
  alienage in the other States."  It provides important protections for
  nonresidents who enter a State whether to obtain employment,  to
  procure medical services, or even to engage in commercial shrimp
  fishing, <em>Toomer v. Witsell</em>, 334 U.S. 385 (1948). Those protections are
  not "absolute," but the Clause "does bar discrimination against
  citizens of other States where there is no substantial reason for the
  discrimination beyond the mere fact that they are citizens of other
  States."  There may be a substantial reason for requiring the
  nonresident to pay more than the resident for a hunting license, <em>see
  Baldwin v. Fish and Game Comm'n of Mont.</em>, 436 U.S. 371 (1978), or to
  enroll in the state university, <em>see Vlandis v. Kline</em>, 412 U.S. 441
  (1973), but our cases have not identified any acceptable reason for
  qualifying the protection afforded by the Clause for "the 'citizen of
  State A who ventures into State B' to settle there and establish a
  home." Zobel, 457 U.S. at 74 (O'CONNOR, J., concurring in judgment).
  Permissible justifications for discrimination between residents and
  nonresidents are simply inapplicable to a nonresident's exercise of
  the right to move into another State and become a resident of that
  State.</p>
  
  <p>Despite fundamentally differing views concerning the coverage of the
  Privileges or Immunities Clause of the Fourteenth Amendment, most
  notably expressed in the majority and dissenting opinions in the
  <em>Slaughter-House Cases</em> (1873), it has always been common ground that
  this Clause protects the third component of the right to travel.
  Writing for the majority in the Slaughter-House Cases, Justice Miller
  explained that one of the privileges conferred by this Clause "is that
  a citizen of the United States can, of his own volition, become a
  citizen of any State of the Union by a bona fide residence therein,
  with the same rights as other citizens of that State."</p>
</blockquote>

<p>Basically, the exception isn't logical and instead is a case of the Courts upholding a common practice that seems to make economic sense, notwithstanding that fact that it is clearly contrary to the relevant constitutional provisions and doctrines. The life of the law is not reason, it is experience. Assuming logical consistency in the law will often lead you to a descriptively inaccurate result.</p>

<p>This answer attempts to justify the constitutionality of state colleges discriminating citizens from other states, from an alternative perspective of the commerce clause, which is <strong>different</strong> from the Supreme Court's derivation.</p>

<p>In your question, the relevant doctrine is the <a href="https://en.wikipedia.org/wiki/Dormant_Commerce_Clause" rel="nofollow noreferrer">dormant commerce clause</a>, a doctrine derived by the Court in <a href="https://www.oyez.org/cases/1789-1850/22us1" rel="nofollow noreferrer">Gibbons v. Ogden</a>  from the <a href="https://en.wikipedia.org/wiki/Commerce_Clause" rel="nofollow noreferrer">commerce clause</a> in the Constitution, meaning that state cannot regulate interstate commerce in a protectionist way even if Congress has not acted. Up to this point, it seems like state colleges cannot constitutionally discriminate citizens from other states, as stated by the OP.</p>

<p>The distinction here from other cases, such as the example used in the OP, is that the <a href="https://www.law.cornell.edu/wex/market_participant_exception" rel="nofollow noreferrer"><strong>market participant exception doctrine</strong></a> applies here (see <a href="https://www.oyez.org/cases/1975/74-1607" rel="nofollow noreferrer">Hughes v. Alexandria Scrap Corp.</a>) This doctrine establishes an exception to the dormant commerce clause when a state, such as a stated-owned business, is not a regulator but a participant in the market, e.g., the college education market.</p>

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