2025 Predictions: The Best States to Open a University in the US

The first question that all my clients ask when they first approach me is “What is the best state to open a university in?”. In 2024, I updated my recommendations for the best states to open a university, focusing exclusively on Arizona and Florida. These states earned top spots due to their streamlined processes, business-friendly environments, and supportive regulations. As we step into 2025, the regulatory landscape and economic conditions have shifted again. This year, we’re expanding the list to include two additional states: Utah and Tennessee.

These four states stand out as ideal locations for aspiring university founders, offering efficient licensing processes, affordable operational costs, and strong economic growth. In this article, we’ll take a closer look at each state, analyzing their economies, business environments, demographics, and regulatory frameworks for establishing degree-granting institutions.

1. Arizona: The Pioneer’s Paradise for University Startups

Overview of Arizona’s Economy and Business Climate

Arizona is still the most popular state for businesspeople wishing to start a university. Its rapidly expanding economy, which is supported by booming sectors including manufacturing, healthcare, and technology, offers educational institutions a strong platform. Arizona is a desirable and economical choice for startups due to its low corporate tax rate of 4.9%, which is among the lowest in the United States, and its reasonably priced real estate market.

Arizona's population is diverse and growing in terms of demographics. Notably, the 18–24 age group—which is the primary college-going demographic—has seen a notable growth. The state is more alluring to university founders because of its thriving educational and cultural centers, like Phoenix, Tucson, and Flagstaff. When combined with Arizona's pro-new company legislation, these elements foster a friendly atmosphere for individuals looking to start a university that awards degrees.

Regulatory Framework for Licensing

Arizona is renowned for its streamlined and efficient process for obtaining a license to operate a degree-granting institution. Overseen by the Arizona State Board for Private Postsecondary Education (ASBPPE), the process is designed to be straightforward and supportive, ensuring applicants are well-informed and able to meet the requirements.

Why Arizona Stands Out

Arizona's regulatory structure, which encourages innovation and lowers obstacles for new universities, is what makes the state a top choice for university openings. Arizona's approach is clear-cut, open, and centered on encouraging educational entrepreneurs, in contrast to many other states. The following are the main benefits that set Arizona apart:

1. Low Costs

Launching a university in Arizona is exceptionally cost-effective compared to most other states. The affordability of the process helps minimize financial risk, making it an attractive option for both first-time founders and experienced educational entrepreneurs.

• Affordable Application Fees: With application fees starting at just $100, Arizona offers one of the lowest cost thresholds for initiating the licensing process.
• Total Licensing Costs: The overall expense to complete the licensing process averages around $2,000, a fraction of the cost required in states like California or New York, where fees can climb to $10,000 or more.
• Cost Savings on Real Estate: In addition to low application costs, Arizona’s commercial real estate prices are significantly more affordable. Office space in cities like Phoenix averages $27.47 per square foot, which is far lower than competing cities like Los Angeles or New York, where rates can exceed $70 per square foot.

By keeping upfront costs low, Arizona allows university founders to allocate more resources toward critical operational areas like faculty hiring, marketing, and student services.

2. Fast Turnaround

Time is a crucial factor for university founders. Delayed approvals in some states can lead to missed enrollment cycles, increased overhead, and financial strain. Arizona addresses these concerns by offering one of the fastest licensing processes in the country.

• Efficient Timelines: The Arizona State Board for Private Postsecondary Education (ASBPPE) typically processes applications within 6–12 months, which is significantly faster than many states where the process can take up to two years.
• Streamlined Steps: Arizona’s well-organized process—starting with the submission of a Letter of Intent (LOI), followed by an application packet—ensures clarity and reduces back-and-forth delays.
• Quick Responses: After submitting an LOI, applicants receive feedback within 10 days, allowing them to proceed with confidence. The final application review, once all materials are submitted, takes just 30 days on average.

This fast turnaround enables founders to focus on launching their institutions and enrolling students without the lengthy regulatory delays often encountered elsewhere.

3. Collaborative Approach

One of Arizona’s most distinctive advantages is the supportive and collaborative attitude of its regulatory body, the ASBPPE. Unlike states where the process may feel bureaucratic or adversarial, Arizona’s Board actively works to help applicants succeed.

• Accessible Communication: The ASBPPE is known for its responsiveness and willingness to address questions and concerns. Applicants are encouraged to contact Board staff throughout the process, whether they need clarification on requirements or assistance with documentation.
• Guidance and Resources: The Board provides comprehensive resources, including a General Information Packet, which outlines every step of the licensing process in detail. Additionally, applicants can access guidance on compliance and best practices.
• Proactive Problem-Solving: If an application is missing information or needs adjustments, the ASBPPE often collaborates with applicants to resolve issues rather than outright rejecting submissions. This approach saves time and ensures that well-intentioned entrepreneurs can bring their visions to life.

This cooperative environment reflects Arizona’s broader commitment to fostering a business-friendly and innovation-driven culture, making it an ideal state for starting a university.

The Bigger Picture: Arizona’s Vision for Education

Arizona’s emphasis on affordability, efficiency, and collaboration aligns with its broader goal of attracting educational institutions that can meet the needs of its growing population. The state’s policies reflect a belief in the transformative power of education, and the ASBPPE’s proactive approach ensures that new institutions are well-equipped to succeed.

By reducing costs, streamlining timelines, and fostering a supportive regulatory environment, Arizona makes the university startup process less daunting and more achievable. For founders seeking to establish a degree-granting institution with minimal financial and procedural hurdles, Arizona stands as a model of accessibility and innovation in higher education.

2. Florida: The Sunshine State of Opportunity

Overview of Florida’s Economy and Business Climate

Florida's strong economy, advantageous tax system, and expanding population make it a top choice for entrepreneurs looking to open institutions. One of the fastest-growing economies in the country, Florida is well-known for its booming tourist, technology, and agricultural sectors. With no state income tax, the state gives firms a big edge and lets business owners keep more of their earnings. Florida is a financially attractive option for businesses, especially higher education institutions, due to its competitive corporate tax rate of 5.5%.

In terms of demographics, Florida has a sizable and varied population, with a notable increase in the number of people in college (18–24 years old). While its smaller cities and rural areas offer chances to aid underserved groups, its urban centers—like Miami, Orlando, and Tampa—act as centers of cultural and educational activity. Florida's business-friendly policies and dedication to workforce development and education combine to create an atmosphere that supports the growth of colleges.

Regulatory Framework for Licensing

The Florida Commission for Independent Education (CIE) oversees the licensing process for private degree-granting institutions in the state. Florida is recognized for maintaining high standards while providing a transparent and efficient pathway for entrepreneurs.

Here’s a breakdown of the key steps in Florida’s licensing process:

1. Initial Application Submission:some text
   • Entrepreneurs begin by submitting an initial application to the CIE, which outlines their institution’s mission, programs, and operational plan.
   • The application fee depends on the scope and type of institution but is competitively priced compared to other states.
2. Documentation Requirements:some text
   • The application must include detailed documentation, such as:some text
     • Financial statements to demonstrate fiscal responsibility.
     • Program descriptions, including course outlines and credit hour requirements.
     • Policies related to admissions, tuition refunds, and student complaints.
     • A catalog or student handbook outlining institutional policies.
   • Institutions are also required to disclose faculty qualifications and provide a business plan outlining their projected growth.
3. Approval Timeline:some text
   • On average, the licensing process in Florida takes 6–12 months (from the date of submitting the application), depending on the completeness of the application and the responsiveness of the institution to any requests for additional information.
   • Florida’s regulatory body is known for its clear communication, helping applicants move efficiently through the process.
4. Annual Compliance:some text
   • Once approved, institutions must file annual reports to maintain their license, ensuring continued compliance with state regulations.

Why Florida Stands Out

Florida’s regulatory framework, combined with its economic advantages and strong commitment to education, makes it a standout choice for launching a university. Here’s what sets Florida apart:

1. Business-Friendly Environment

Florida’s no state income tax policy and competitive corporate tax rate create a welcoming financial environment for entrepreneurs. This tax-friendly structure allows institutions to allocate more resources to critical areas, such as faculty hiring, technology investment, and student services.

Additionally, Florida’s affordable operating costs, such as lower utilities and real estate prices compared to states like California and New York, make it an attractive option for institutions looking to manage expenses effectively.

2. Streamlined Licensing Process

The Florida CIE offers a streamlined approach to licensing, ensuring that applicants can navigate the process efficiently without unnecessary delays.

• Efficient Review Process: The CIE’s typical timeline of 6–12 months enables entrepreneurs to move from application to approval faster than in many other states.
• Clear Requirements: Florida’s licensing process is well-documented, providing applicants with clear guidance on the necessary steps and materials.
• Ongoing Support: Once licensed, institutions receive continued support from the CIE to ensure compliance and operational success.

This emphasis on efficiency makes Florida a practical choice for university founders who are eager to launch their institutions and begin enrolling students.

3. Strong Educational Ecosystem

One of the main attractions for university founders is Florida's standing as a leader in education. In terms of educational innovation and quality, the state often ranks among the best.

• Demand for Higher Education: Florida has a sizable market for higher education due to its quickly expanding population and significant influx of students from other states and nations.
• Focus on Workforce Development: Many private colleges, especially those that provide specialized or vocational programs, share Florida's emphasis on preparing students for the workforce.
• Balanced Regulations: Regulations in Florida are balanced between upholding strict standards and making sure that new institutions may easily comply with them. This strategy creates a cooperative atmosphere that supports the success of private universities.

The Bigger Picture: Florida’s Vision for Education

Florida's dedication to promoting innovation and accessibility in higher education is reflected in its economic and regulatory policies. From traditional colleges to online programs and vocational schools, the state's lenient licensing system promotes the creation of establishments that cater to the varied demands of its populace.

Florida establishes itself as a leader in the education industry by emphasizing effectiveness, affordability, and quality. Florida offers the perfect balance of resources and regulatory clarity for businesses looking for a state that offers both opportunity and support. Whether you are establishing a full-fledged university or a vocational college, Florida's educational environment is built to support the success of your establishment.

Florida is genuinely the Sunshine State of Opportunity for entrepreneurs hoping to realize their idea in a state with a robust economy, effective licensing, and an emphasis on education.

3. Utah: The Rising Star for Educational Entrepreneurs

Overview of Utah’s Economy and Business Climate

Utah has been a hub for business endeavors, particularly startups in higher education. Utah, which is well-known for its robust economy, pro-business laws, and inventive spirit, provides a setting that is conducive to the growth of new colleges. Because of its low corporation tax rate of 4.85%, reasonable cost of living, and few regulations, the state is frequently ranked among the best for business. Universities can assist in meeting the demand for a skilled workforce created by industries like technology, healthcare, and outdoor recreation, which drive Utah's economic growth.

A sizable section of Utah's population is in the college-bound age range, making it the state with the youngest median age in the US. The objectives of such schools are well aligned with the state's constantly expanding population and strong emphasis on education. Cities like Salt Lake City and Provo are desirable sites for higher education initiatives because they are thriving centers of innovation.

Regulatory Framework for Licensing

Utah’s regulatory framework for degree-granting institutions is overseen by the Division of Consumer Protection, which aims to balance quality assurance with ease of entry for new institutions. Here’s an overview of the licensing process:

1. Initial Registration:some text
   • All institutions must file a registration statement with the Division of Consumer Protection before operating in the state.
   • A $500 non-refundable registration fee is required to initiate the process.
2. Documentation Requirements:some text
   • Institutional Details: Include the name, address, and contact information of the institution.
   • Corporate Authority: Provide articles of incorporation or other documents demonstrating the authority to do business in Utah.
   • Campus Licenses: Institutions with multiple campuses must submit separate applications for each location.
   • Advertising Materials: Submit all marketing and promotional materials to ensure compliance with transparency regulations.
   • Program Information: Provide a detailed list of programs, credentials, costs, and faculty.
3. Financial Assurance:some text
   • Institutions must demonstrate fiscal responsibility by submitting pro forma financial statements and credit reports.
   • A surety bond or equivalent financial guarantee is required, with the amount based on projected enrollment:some text
     • 1–49 students: $62,500.
     • 50–99 students: $125,000.
     • 100+ students: $187,500.
   • Institutions with gross tuition under $25,000 may provide a reduced bond of $12,500.
4. Academic Standards:some text
   • Institutions must meet minimum credit hour requirements for degree programs:some text
     • Associate degree: 60–90 credit hours.
     • Bachelor’s degree: 120–180 credit hours.
     • Master’s degree: 150–225 credit hours.
     • Doctorate degree: 200–300 credit hours.
   • A catalog or student bulletin outlining institutional policies, program details, tuition fees, and refund policies must be submitted.
5. Approval Timeline:some text
   • The review process typically takes 6–9 months, provided all documentation is complete and accurate. Institutions are encouraged to maintain clear and organized records to expedite the process.
6. Ongoing Compliance:some text
   • Licenses must be renewed annually or biennially, depending on accreditation status.
   • Institutions are required to report material changes, maintain student records, and follow state-mandated disclosure policies.

Why Utah Stands Out

Utah combines a supportive regulatory environment with strong economic and demographic advantages, making it a standout choice for higher education entrepreneurs. Here’s what sets Utah apart:

1. Business-Friendly Policies

Utah is widely recognized for its pro-business policies, offering an attractive combination of low taxes, minimal bureaucratic hurdles, and affordable operational costs.

• Tax Advantage: With a corporate tax rate of 4.85%, Utah is one of the most business-friendly states in the U.S., allowing founders to reinvest more into their institutions.
• Affordable Real Estate: Office and campus space in Utah’s cities, like Salt Lake City and Provo, are competitively priced compared to other metropolitan areas, reducing startup costs.

These financial advantages make Utah an appealing option for institutions seeking to establish themselves in a stable and cost-effective location.

2. Clear and Streamlined Licensing Process

Utah’s regulatory framework is designed to support new institutions while maintaining high standards for quality.

• Transparency: The Division of Consumer Protection provides clear and detailed guidance on the licensing process, reducing uncertainty for applicants.
• Efficient Review Timeline: With an average approval time of 6–9 months, Utah’s process is faster than in many states, allowing entrepreneurs to launch their institutions quickly.
• Customizable Financial Requirements: Utah’s tiered surety bond system ensures that smaller institutions can meet financial requirements without undue burden.

These streamlined procedures, combined with clear expectations, make the licensing process in Utah one of the most accessible in the nation.

3. Strong Demographics and Workforce Demand

Utah’s young and growing population creates a strong demand for higher education, particularly in fields aligned with the state’s key industries, such as technology, healthcare, and outdoor recreation.

• Young Median Age: Utah’s median age is just 31.1 years, the youngest in the U.S., offering a large pool of prospective students.
• Economic Growth: The state’s emphasis on workforce development provides opportunities for institutions to tailor programs to industry needs, ensuring high employability for graduates.

These demographic and economic factors make Utah an ideal location for institutions looking to make a lasting impact.

The Bigger Picture: Utah’s Vision for Education

Utah’s commitment to fostering innovation and education aligns with its broader goal of supporting economic growth and community development. By combining a business-friendly climate with a clear and accessible regulatory framework, Utah creates an environment where new universities can thrive.

Entrepreneurs looking to establish a degree-granting institution will find Utah’s low costs, efficient processes, and strong demand for higher education compelling reasons to choose the state. With its focus on transparency, affordability, and collaboration, Utah positions itself as a rising star in the world of higher education entrepreneurship. For founders seeking a vibrant and supportive state to launch their university, Utah offers an unbeatable opportunity.

4. Tennessee: A Gateway to Rapid University Startups

Overview of Tennessee’s Economy and Business Climate

Tennessee's strong economy, business-friendly laws, and reasonable cost of living make it a preferred choice for entrepreneurs looking to start institutions. The state's economy depends heavily on sectors like manufacturing, healthcare, and logistics, which generate a high need for qualified workers. Tennessee is one of the most financially appealing states for both people and businesses due to its competitive 6.5% corporate tax rate and lack of personal income tax.

With thriving urban centers like Nashville, Memphis, and Knoxville acting as cultural and educational centers, Tennessee boasts a diverse and expanding population. College-age people and professionals looking for chances to further their education can be found in these cities. The market for higher education is further expanded by Tennessee's advantageous location in the southeast of the United States, which makes it a major entry point for students from nearby states.

Regulatory Framework for Licensing

The Tennessee Higher Education Commission (THEC) oversees the authorization of private degree-granting institutions in the state. Tennessee’s regulatory process is designed to balance quality assurance with efficiency, making it one of the fastest states for obtaining a license to operate a university. Here’s an overview of the licensing process:

1. Initial Application Submission:some text
   • Institutions must submit an application to the THEC detailing their proposed programs, operational plans, and institutional mission.
   • Application fees are competitive and vary based on the type and scale of the institution.
2. Documentation Requirements:some text
   • A business plan with financial projections to demonstrate fiscal responsibility.
   • Program descriptions, including credit hour requirements and faculty qualifications.
   • Compliance documentation for zoning, safety, and other local regulations.
   • Policies for admissions, tuition refunds, and student complaints.
3. Surety Bond Requirement:some text
   • To protect students in the event of institutional closure, applicants must provide a surety bond. The amount is determined based on the institution’s size and enrollment projections.
4. Approval Timeline:some text
   • The process is one of the fastest in the country, with applications typically reviewed and approved within 6–8 months, provided all documentation is complete and meets the state’s requirements.
5. Ongoing Compliance:some text
   • Once licensed, institutions are required to submit annual reports and comply with THEC’s standards to maintain their authorization.
   • Institutions must notify THEC of any material changes in operations, such as adding new programs or expanding to additional locations.

Why Tennessee Stands Out

Tennessee combines its strong economic foundation with an efficient and supportive licensing framework, making it a standout state for university founders. Here’s why Tennessee is a top choice:

1. Business-Friendly Environment

Tennessee’s tax structure and cost of living are significant advantages for entrepreneurs.

• No Personal Income Tax: Tennessee’s lack of state income tax allows founders to maximize their earnings and reinvest in their institutions.
• Competitive Corporate Tax Rate: At 6.5%, Tennessee’s corporate tax rate is attractive compared to many states with higher rates.
• Affordable Real Estate: Campus and office space in Tennessee’s cities are competitively priced, offering significant savings compared to metropolitan areas in other states.

These factors create a financially sustainable environment for higher education startups.

2. Streamlined Licensing Process

Tennessee’s regulatory process is designed to reduce barriers for new institutions while maintaining high standards for education quality.

• Efficient Timelines: With approvals typically granted in 6–8 months, Tennessee is one of the fastest states for obtaining a license, allowing institutions to launch and begin enrolling students sooner.
• Clear Expectations: The THEC provides detailed guidance on application requirements, reducing uncertainty and ensuring a smooth process for applicants.
• Supportive Oversight: THEC works closely with institutions to address questions and provide assistance throughout the application process.

This streamlined approach allows entrepreneurs to focus on operational planning and student recruitment rather than navigating lengthy bureaucratic delays.

3. Strong Demographics and Workforce Demand

Tennessee’s growing population and diverse economy create a strong demand for higher education institutions.

• Access to Regional Students: Tennessee’s location in the southeastern U.S. allows it to draw students from neighboring states, increasing the potential enrollment pool for new universities.
• Alignment with Workforce Needs: With key industries like healthcare, manufacturing, and logistics driving economic growth, there is a high demand for programs that prepare students for these fields. Universities that align their offerings with these industry needs are well-positioned for success.
• Vibrant Urban Centers: Cities like Nashville and Memphis offer rich cultural and educational ecosystems, making them attractive locations for both students and institutions.

These demographic and economic advantages provide a solid foundation for new universities to thrive.

The Bigger Picture: Tennessee’s Vision for Education

Tennessee's dedication to promoting innovation and accessibility in higher education is reflected in its economic climate and regulatory structure. The state's focus on workforce alignment, affordability, and efficiency makes it easy for new universities to thrive.

Tennessee provides a unique blend of quick approvals, business-friendly regulations, and rising educational demand for entrepreneurs wishing to launch a degree-granting institution. By selecting Tennessee, entrepreneurs can take use of the state's favorable regulatory environment, robust population, and reasonably priced tuition to establish educational institutions that cater to both the needs of students and the labor market.

In conclusion, Tennessee is a leader in university startups, offering the perfect environment for entrepreneurs to realize their ideas and leave a lasting impression on the field of education.

Closing Thoughts

Choosing the right state to open a university is a pivotal decision that sets the foundation for the success of your institution. In 2025, Arizona, Florida, Utah, and Tennessee emerge as the top choices for aspiring university founders, each offering unique advantages. While there’s no “one size fits all” solution, these states provide a mix of streamlined processes, business-friendly policies, and supportive environments that cater to a wide range of entrepreneurial visions.

• Arizona is ideal for those looking for an affordable and fast-track option to launch their institution. With low licensing costs, efficient timelines, and supportive regulatory bodies, it is an excellent choice for entrepreneurs with limited budgets. However, it’s worth noting that Arizona restricts the use of “college” or “university” in the name of your institution until accreditation is achieved. If this naming flexibility is essential for your brand, Arizona may not be the right fit.
• Florida offers a balanced blend of business-friendly policies, a strong educational ecosystem, and a growing demand for higher education. Its warm climate and diverse population make it an attractive choice for founders aiming to establish institutions in a dynamic and culturally rich environment. Florida is particularly appealing for those who value efficiency in licensing and want to tap into a thriving education market.
• Utah is a rising star with its pro-business environment, young and growing population, and clear licensing framework. Its emphasis on innovation and fiscal responsibility makes it an excellent choice for entrepreneurs seeking a vibrant and supportive state to build their institution. If you prefer a colder climate and value a state with a youthful demographic, Utah could be the perfect fit for your vision.
• Tennessee combines affordability, fast approval timelines, and access to a strong workforce market. With no personal income tax and competitively priced real estate, it provides an economically sustainable option for founders. Tennessee’s cultural hubs like Nashville and Memphis, paired with its diverse population, make it a standout choice for those looking to establish institutions in colder weather regions with a robust demand for education.

Ultimately, the choice of state depends on your unique goals, budget, and preferences. If budget constraints are a priority and you’re flexible on branding restrictions, Arizona is your best bet. For those who value warm climates and a balanced regulatory framework, Florida stands out. If you’re drawn to colder weather and innovative opportunities, Utah and Tennessee offer excellent conditions for success.

Whichever state you choose, rest assured that all four provide strong foundations to launch your institution and make a lasting impact on education. As you embark on this exciting journey, consider partnering with experienced consultants to navigate the complexities of licensing, compliance, and planning. With the right strategy and vision, you’ll be well on your way to creating a thriving institution in 2025.

For personalized guidance on opening your university in the United States, reach out to Expert Education Consultants (EEC) at +19252089037 or email sandra@experteduconsult.com