A system for compacting traffic separation policies in campus networks, the system comprising an access layer switch and a campus border switch. The access layer switch is configured to receive a definition of one or more policies; responsive to receiving a packet, determine whether any of the policies apply to the packet; responsive to determining that none of the policies apply, cause a tag to be inserted into a communication header of the packet and forward the packet; and responsive to determining that one of the policies applies, forward or drop the packet according to the applicable policy and omit the tag. The campus border switch is configured to, responsive to receiving a packet from the access layer switch, determine whether the packet includes the tag, and responsive to determining that the packet includes the tag, apply a traffic separation policy associated with the tag to the packet.