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I definitely think it's a good idea for freshmen to live in university housing. I have a ton of friends from Madison who decided to go to the UW, and a lot of them chose to stay at home to save money. They ended up hating college -- one has since dropped out, the others are not involved in anything outside of classes, and none of them have very many friends. Meanwhile, the friends I have who lived in the dorms freshman year LOVE the school, are extremely social, are much more likely to be involved, and basically are having a much better college experience because of it.
That said, I don't think the university should require students to live on campus -- it should be their choice. It should, however, be strongly encouraged as I think it usually makes a big difference in your social life for the next four years.
Our school would probably require people to live on campus if it could, but it can't. We already have major housing shortages every year, and every year it just gets worse because the freshman class gets bigger and bigger.
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