I can only relay some anecdotal evidence here - but in my area, this appears to be the case. I have heard that the hospitals around where I live (greater Philadelphia area) tend to hire students from local universities before hiring those from out of the area. Our hospitals also tend to hire students who did their externships/worked as techs at the hospital to which they're applying. I myself am still in school, but my cousin just graduated from a school in Washington, D.C. She applied to jobs both in Philadelphia and in D.C. Though she got interviews at hospitals in both areas, she was ultimately hired in D.C. - likely for exactly the reasons you state. I don't think that this completely locks you out of working at hospitals outside of the area in which you went to school, but if money is not your primary concern, I would definitely keep this in mind. I have heard that this is also the case in other professions. TL;DR: Yes, it can be smarter to go to school where you want to work - but it probably won't kill your career if you can't afford anything but in-state tuition. It'll just make it easier.