Do schools treat different OOS applicants differently?

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Publicly funded state institutions give preferential treatment to in-state applicants compared to those applying from out of state, some schools also have close relationships to residents of neighboring states but reciprocity exists to a much lesser degree than for undergraduate admissions. You would definitely need to check with the actual Admissions Office of the schools you were hoping to apply to though, as to how much preference there is, if there is at all. (For example, Ohio State, while publicly-funded, has about a 50/50 ratio of in-state to out-of-state matriculants).

Private medical schools rarely have an in-state preference though, but you'd need to verify this with their posted policies on their websites. This is why people generally apply to their in-state public medical school(s) and then solely to private institutions out-of-state, unless they have a really stellar application.
 
Schools, regardless of whether they are public or private schools, prefer to interview applicants who are more likely to attend. If you have strong ties to that region of the country (even if they're to the neighboring state, not the one the school is in), you may get perceived as a more serious applicant than someone who is from the opposite corner of the country and picked the school seemingly at random.
 
State schools are subsidized by those residing in them who pay the State taxes. It cuts down the costs of education to the individual, even in undergrad. It makes college and medical school more affordable to children of the middles class and poor who might not be able to receive a higher level education due to the costs that private colleges usually have. Preference is shown to the State residents because it is their tax money going to make higher level education more affordable at that school. Out of Staters are usually charged double the tuition since they, nor their families paid into the pot that is subsidizing these State schools. Some feel if they come from that State, they also will be more likely to practice medicine in that State after graduation. Many State school have reciprocity agreements with neighboring States. It makes going to a State school that is better known and thus stronger in a particular field than your and vice versa. Your State school may have a great engineering department but not a great business school but your neighboring Stae may be the opposite.
 
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Schools like West Virginia give some preference to OOS who are from neighboring states (Ohio, Kentucky, PA, VA, etc)
 
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