Through my parents, I can be a US citizen. I have heard that doing so increases your chances of admission (most unis prefer US over foreign), gets you state scholarships and your fees are less. However, I have searched around in Google etc but am yet to find something that address this. Can someone guide me to this? (BTW, I am applying for Financial Aid as well, I need it).
So are you an international applicant (foreign citizen) right now?
It’s either you are an American citizen by birth or an immigrant applying to be an American citizen. If it is the latter, unfortunately, it will not be processed within an academic year.
For US colleges, being a US citizen have obvious benefits from admission to financial aid. But first, know what is your exact status, and report back to us so we can further help.
Thanks for the swift response. 
Right now, I am an international student.
According to this, I qualify as a citizen by birth: (Born abroad to US citizens who lived in the US)
http://www.uscis.gov/us-citizenship/citizenship-through-parents
As an American citizen (or permanent resident), you’re eligible for all federal financial aid, and for admission purpose you’re not in the same “pool” as internationals (who tend to be more competitive) nor as you in the same “pool” for institutional financial aid (there are about 60 to 80 colleges in the US, often the most selective and prestigious, that meet full need for citizens and PRs. There are only 6 for internationals, ALL OTHERS are need-aware or do not award financial aid). In addition, as an American citizen, there are no restrictions placed on you for merit aid awards (some universities have restrictions).
In short, applying as an international makes it MUCH more difficult for you to be admitted to top 50 universities/LACs and EVEN MORE difficult for you to be awarded financial aid.
Why are you even asking about this? Does a country where you currently hold citizenship automatically strip that from you if you complete the paperwork for your US citizenship? Do you just want to not have to juggle multiple passports when leaving your current country and then entering the US? There simply is no good reason to try to study in the US in any other status than citizen if you are a citizen or eligible to be a citizen.
Financial Aid is significantly better for US applicants. Only citizens, legal permanent residents (green card status), and a very limited number of other statuses (certain refugees and asylees) can file the FAFSA and receive federally determined financial aid.
If you are a US citizen, you can work wherever you want to in the US, and you can work any number of hours while you are a student. You have more options for internships, and you don’t face any hiring restrictions after graduation if you want to stay in the US.
Not to mention of course that if you are eligible to be considered a US citizen (or eligible for legal permanent resident status) because of the status of at least one of your parents, the US consulate in the country where you would be applying for a tourist or student visa can deny that visa, and can require that you apply for the status that you are qualified for.
So do have a nice long chat with an immigration lawyer who knows about this sort of thing, or if you aren’t in the US, make an appointment with the Citizens Services officer at the US consulate closest to where you currently live. Get your paperwork sorted out.
^That was my reaction – are you seeking and claiming your US citizenship now, when you will be applying to US colleges, and never before?
My paperwork is mostly sorted out, just some final kinks remaining. I’ll be applying to universities towards the end of 2015 (i.e. next academic year). Citizenship process should be complete well in advance.
This wasn’t a question as to apply or not to apply for US citizenship. This was merely for getting some information regarding the benefits a US citizen has in terms of university applications. Sorry for phrasing the initial post that way which brought ambiguity, my mistake.
@viphan - Depending on when and where the OP was born, when/where/how the OP’s citizen parent(s) acquired citizenship, and where the OP and parents have been living so far, there may have been no particular reason for the OP to pick up a US passport until now. As each country sets its own citizenship policy, things can also become very complicated very quickly. This can be worth the visit to a well-versed immigration lawyer.
@MarcoReus: Were you to become a U S citizen, you would not (contrary to what you indicted in the initial post to this thread) be entitled to “state scholarships.” In-state tuition, fee, etc. are generally available ONLY to those who reside in the state and whose parents have paid state taxes. For example, a Pennsylvanian normally does not qualify for in-state rates in Virginia . . . and neither do you, regardless of citizenship.
A US citizen can borrow ~$5500/year for college from the US gov’t. S/he may qualify for a federal Pell grant of up to $5k/year (if family income is ~$40k or so). (You have to file the FAFSA to get the loan. If your FAFSA EFC is low enough, you’ll qualify for a Pell grant.) Run each school’s Net Price Calculator to get an estimate of what that college may cost. Check the threads pinned to the top of the financial aid forum for low cost schools and schools with guaranteed merit.
US citizens are in a separate pool than internationals for both admission and institutional aid and they get the lower US citizen tuition rates instead of the higher international ones. However, as a resident of whatever country you’re living in, you won’t be eligible for in state rates anywhere. You’ll be paying OOS rates at all state schools. Private schools charge the same whether you’re in state or OOS, so you may want to check out some of them. Make sure you have a safety on your list (a school sure to accept you, that you can afford, and would be happy to attend). Good luck. 
@TopTier and @austinmshauri, thanks for clearing the state scholarship confusions.
You’re welcome, Marco.