I am wondering if anyone has heard any recent updates/discussions about Michigan going private (see http://www.nextstudent.com/student-loan-blog/blogs/sample_weblog/archive/2009/05/05/19299.aspx, for example of previous rumors). A guy sitting a few rows in front of me on my flight home from the game yesterday was talking about the movement gaining some fresh steam both with the administrators and in the legislature. Anyone know any more? Was this guy just talking out of his a--? Thanks.
OT - University of Michigan going private? Any updates?
Have you seen their tuition costs, I dont think it would make much of a difference for students price wise!
#1) I broke a finger yesterday playing flag fb so I can't write as much as I would like
#2) Establishing credibility by saying I'm very involved with Alumni Assoc. on national level, would prefer not to go further. Also, I have immediate family members who work for the school.
#3) MSC has a duty to look into EVERY possibility. With the potential for MASSIVE funding cuts from what the State gives to all universities, MSC and the Admin had to look at doomsday scenarios. They conducted studies into what it would look like if we were to no longer get any money from the State.
a) Note that the % of Universities operating budget that is given by the state (as opposed to tuition and endowment) is actually not that big. I don't have in front of me but I think its like 20 or 25% of the budget. At most state universities its like the exact opposite.
b) That said, I believe thats still somewhere between 150 and 200 million dollars a year.
c) studies concluded for the University to operate and replace that money they would likely have to (i) go private and create a level tuition somewhere in the $30,000 range (in state is about $19,000 right now and I think out of state is about $41,000). (ii) a few of the schools (majors) would have to be cut for cost savings (iii) we would have to have another MASSIVE fundraising capital campaign to create an endowment such that the 4.5% interest they typically allow for per year would replace a nice portion of that money the state gave us. Just so you understand, if the University put $100,000,000 in their endowment, they don't spend off that amount, they only spend 4.5% of the interest. Accordingly, $100mil in the bank is only $4.5mil in usable operating money year to year.
BUT THATS WHERE IT ENDS!!! There is no one pushing for this agenda!!! Its just a doomsday scenario. The proverbial end of days scenario as prepared by a human group tasked to determining the same much the way the W.H.O.P.P.E.R. computer system was tasked to do in the 80's movie Wargames with Mathew Broderick. (Dating myself somewhat here.
Now, my understanding is that our new Alumni-In-Chief/Governor, Rick Snyder will likely be facing a fairly massive budget deficit next year and not expecting the federal bailout funds that were used the last two years.. I know he's close to the University but the cuts may come pretty deep this year. I would ask all of your faith and tell you that this WON'T happen unless it has to happen and NO ONE wants it to happen.
a) Thanks for delivering some deep knowledge on this topic.
2) I was appreciating your post and noticed you had 0 vote-points, so I wondered, "when was this posted? Must've been very recent if no one has yet pos-voted it." Lo and behold, it was actually posted 52 minutes IN THE FUTURE! Are you THE_KNOWLEDGE or like some miniature, just a little bit into the future version of same KNOWLEDGE? (Er, or: Hey Brian and peeps, dey turk ar kloks this weekend, or something.)
My assessment after conference call(s)...
You're dead on.
Due diligence has been done and passed on. It is being discussed, but not as a truly serious option - right now.
GIven the budget problems in Michigan, changes will be made - but this one seems to be near the bottom of the list.
Outstanding post - would +25 you if I could.
It would have a huge effect. One of the biggest differences would be that there would no longer be in-state tuition.
to continue NOT paying property tax on its immense landholdings.
Private universities are still not-for-profit organizations. The University would still not pay property tax.
Not-for-profit... As a Michigan alum now going to grad school at a ritzy private institution, I see this argument all the time, look at what I pay to be here, and I just don't get how it could possibly be true.
As far as UM is concerned, it's an institution that takes its identity as a public university quite seriously, and I don't see that being forfeited or abandoned any time soon.
Not for profit doesn't mean the organization doesn't make money. It means that the organization is not created for the financial profit of shareholders.
Profits are plowed back into the organization - expanding service offerings, building physical infrastructure, acquiring intellectual capital, providing scholarships, etc.
rather bring for or non-profit, which almost all private colleges are anyway (the exceptions are internet schools like Phoenix Online).
I would also bet you that the University of Michigan is a net positive contributor to the state of Michigan when all is said and done.
but not in the way you think
You're pretty pink pony hath confused me.
Throwback response, nice!
But I believe that such a move would require approval of the citizens of the state, since thus far, our tax dollars have supported it, and we have elected positions involved in operating it.
Pretty sure this all got started when the state was talking about 500 million crazy ways to save money. Key change... the budget is looking like it may just improve.
I think you're right on all counts. The discussion began when the legislature was looking to cut the budget and the argument goes that Michigan can fund itself through the increased tuition charged to in-state students. I also heard that they are looking to change the ratio of students to be more even in-state versus out-of-state which would cause serious heartache in the legislature. Another consideration I've heard is that Michigan has been ranked around 20-30 in the US World News rankings every year and some say that will never change unless they go private. I'm not sure how much weight this concern carries but its still an interesting argument for going private (an increase in rank means more grant money, etc.).
There are many reasons the University would consider going private, but I'm sure increasing its ranking in th U.S. News isn't one of them. And it's certainly not how grants are awarded.
For the ridiculously funny avatar! (or +1 at least!)
I guess we don't have to worry about that bs anymore
It's gone in weekly/monthly print form, but the college and hospital ranking systems will still be around.
UM already has a staggering out-of-state attendance rate for an ostensibly public, state school. Something like 30% of undergrads are out-of-state (as are the vast majority of grad students). Surely the student quality would begin to drop off a bit given that out-of-state UM undergrads are often Ivy rejects (though they often make for great students) while in-state students often reflect the absolute best students in a very large state. So I don't know that increasing that percentage substantially is tenable; it seems that they've struck a nice balance of out-of-state and in-state talent (and, remember, as bad as things can get in the state, Michigan doesn't suffer acutely from the brain drain that afflicts other economically struggling state and we can thank UM and, to a lesser extent, MSU for that).
The UC system only admits about 10% out of state students, which is costing a cash-strapped state untold millions of dollars. I recall seeing a petition by UC profs encouraging increasing those numbers, as well as further institutionalizing the split between elite UC schools and the lower tier, or the sake of achieving solvency. But even if they really, really need the money, I can't see UC going to even 20% out-of-state enrollment.
Surely the student quality would begin to drop off a bit given that out-of-state UM undergrads are often Ivy rejects (though they often make for great students) while in-state students often reflect the absolute best students in a very large state.
I'm not sure I get what you're saying here. Are you saying that increasing the OOS % would be worse for Michigan academically? Or that taking the school private would hurt the school academically? Neither really jives with reality.
I'm saying neither. I'm saying that it would hurt the state of Michigan by a) pricing out good local students b) consigning more talented Michigan students to MSU or c) sending such students out of state. 30% is a lot of out of state students for a public school but it seems to be about the price of admission for having an institution that can compete with any in the world. And, relative to the size of Michigan (compared to California), it seems to produce an appropriate admixture comparable to the UCs. But more than that, or going private altogether, would obviously have some effects on both student body demographics and on the general educational environment of the state.
The UC system only admits 10% OOS because there are 33 million people living in California. Even with Stanford and USC providing some outlet, the top tier of the UC system can't handle all of the good California kids who want to go there, let alone tons of out of state kids.
By comparison, Michigan has a little less than 10 million in population that skews older. Any top-level student who wants to go to Michigan will pretty much be accepted to Michigan. That's not necessarily the case in the UC system. Top level kids might not get into Berkeley or UCLA.
Putting it another way, Michigan's has around the same admissions standards as Berkeley, UCLA, and UCSD. The next best school in Michigan, MSU, is about on par with UC-Riverside and UC-Santa Cruz, the 6th and 7th best schools in the UC system.
Iowa is like 55% instate/45% out of state. No discussion of going private there.
MSU WANTS to go higher than their 10% or 15% out of state but can't attract high enough caliber out of state students.
There is precendent for the split. Has to do with the demand and the state's desire to have a school of national quality versus just a "best school in the state". Sorry. WOuld type more but I broke my finger playing flag fb yesterday and typing is a pain.
I got into a couple Ivy schools but the truth was for the fields I was interested in, they weren't as good as UM. They also cost 2x+ what UM did out of state. Having visted and known many people who went to Ivy schools, I'm still not sure what the big deal is. Outside of Law/B-School they really aren't any better than numerous other institutions throughout the US.
This has been threatened forever. At the end of the day it won't happen.
I remember hearing a rumor about UT-Austin going private, also.
i've spoken to a professor close to the situation several times about this and he continues to tell me that while certain people make rumbles about taking the university private, it will not happen. the university gets very little money from the state relative to other public schools, and that cuts both ways. it makes it easier for them to go private, but so long as they don't need more money, it alleviates the need for them to change their financial model. ultimately, this seems like all talk.
Thanks for the "insider" info.
How much is in-state tuition? I know out-of-state is somewhere upwards of $40,000/yr. During my years at U of M, out-of-state was somewhere around $16,000/yr.
In state tuition is about $15,000 as of right now, so this would be a huge hit on future in state students
If only because it keeps Tulane as the only school in the nation to go public to private and not vice versa.
<grumble grumble giving up the state grumble grumble>
1. Go Private
2. Declare Ann Arbor a sovereign nation
3. Build wall to keep out those ne'er-do-wells from Ypsilanti
5. Profit! (or stay non-profit)
don't forget legalizing pot
in California some of the professional schools have explored becoming more independent of the UC system. The most recent example is Cal's law school. They haven't made much progress but the driving force is to be able to independently finance the school-meaning alumni and business fundraising will be retained in larger part by the law school and they will be able to raise tuition, without any go-forward discount for in-state students.
I think law schools are entirely different beasts. For example, the law school I attended was attached to a public university but the law school did not give special tuition to in-state students. I think all graduate schools are treated differently with respect to state funding.
Not true. Public medical schools, at least the 3 in Michigan, have a significant difference between in-state vs. out-of-state tuitions.
. . . that diverts attention from the fact that Michigan, because of relatively high fees, a large out-of-state contingent, and a rich endowment is less dependent on state funds than comparable public institutions like Berkeley and UCLA, or in-state counterparts like MSU. In that sense, it reflects the political calculus in Michigan that students should pay a comparably larger proportion on what it costs to educate them than in states like California, where tuition has historically been low. As Yooper indicates, public generosity in California regarding higher ed (codified in what is called the Master Plan) has been scaled back in recent years with a series of draconian fee increases. There's even been talk of introducing a clear funding hierarchy to the UC system, where Berkeley, UCLA, and UCSD would be identified as "flagships," and thus given the ability to set their own fees.
No basis in actual plans. The University receives 7% of its budget from the state (that link goes to a good New York Times article from last year about this subject). Out-of-state students effectively attend a private university, and pay accordingly, so their tuition replaces the unreliable state funding. With its endowment and brand strength, it has the option to go private, but neither the Regents nor President Coleman desire to do that because they value the university's mission as a public.
With a Michigan alum as governor-elect, I highly doubt he'll adopt such a measure.
Wouldn't this decision come from the Regents, or even through a constitutional amendment? In either case, it wouldn't be the governor.
It's a hypothetical decision on a hypothetical proposal, so it doesn't really matter, but I have to put my poli sci major to use when the time calls for it.
He would have a lot of sway in a decision like that, even if he could not take any real action. However, it's not going to happen for a million reasons, so it doesn't really matter.
True. He would have sway.
I love what I call Michigan the school threads. I also hate them. Love reading people closely tied talk with knowledge about the greatness of the school. Hate it that I messed around a little too much in high school and could only get into MSU.
Arguably the top public University in the country, if not the world. Good to read that folks think it will stay that way.
you mean top university in the world, period, right?
harvard gives me hives.
This comes up at the start of every new administration, and it's kind of a shot across the bow (another guy used red herring). Every budget cut in the state has managed to cut Michigan's share down a little bit more, because, well, here's this big university in the state that seems to be taking more and more out-of-staters, and whose alumni don't often stick around. And every time this gets a "well do you want us to go public? Huh?" empty threat.
I talked with a guy once about an idea of debt forgiveness for Michigan grads. The idea is every year you work in Michigan after graduating from U-M, the state will forgive an increasing percentage of your student loans. It never got anywhere, but that might be a reasonable sweetener to add when the state wants to make it 6.5% next time. Any other states do something like this?
But without entry-level jobs available it's a non-starter. A better one would be for entrepreneurs. Relieving them of a large, non-dischargeable debt would make taking risks more palatable.
Privatizing UofM would be a huge mistake for the state, and not be good for Michigan. I don't want Michigan to be another second rate private school (like USC). A huge appeal of Michigan is it's one of the best public schools in the country.
I'm not saying privatizing would be good or bad, but I highly doubt that Michigan would ever be considered "second-rate" if it went private. If anything, the caliber of students could arguably increase if they admit more out-of-state residents. I do not agree with the above poster who stated that the only out-of-staters that consider Michigan are the ones that get rejected to Ivy League schools. That's a ridiculous statement.
I did want to note, though, that in terms of U.S. News*, USC (T-23) is ranked right in between Berkeley (22) and UCLA (25) and a few spots ahead of Virginia (27) and Michigan (29).
* (While U.S. News rankings lack validity, they are what most people reference when talking about school quality, so I thought this was a useful comparison.)
In my position with UM I have heard President Coleman, Dave Brandon, then-provost Sullivan, Um CFO Tim Slottow, and current and former regents talk about the possibility of going private. In a word: no. The money just isn't there (going private adds a lot of costs that even the tuition increases wouldn't add up to fill), and Michigan currently gets the BEST students in Michigan because of in-state tuition. Without that the calibur of student at UM could even go down because those students will go elsewhere (MSU was mentioned).
Secondly, Michigan views its identity as being a pillar for the state of Michigan to build off of, to produce minds for the state and serve the state. It is a tad harder to do that with less state funding, but it is about more than that- it is about what the administration feels is the basic mission of the university. When I joined UM as an employee (and when I was a student) I was convinced that going private was the best thing... now not so much. There are more opportunities for Michigan has a public university to carve out a powerful niche and stay relevant nationally than as just another private school.
I don't know who you are but this is 100% in line with everything I hear.
The only really great reason to privatize would infuriate putzes like Rosenberg: no FOIA. Imagine pompous assholes like those at the Freep not being able to wave their hands in the air and scream "FOIA" every time they get pissed at Michigan and want to go on a witch hunt. That alone might be worth it.
Sadly, though, from what I am seeing, it would compromise the ability of the University to give a quality education without having students and their parents signing over body parts as collateral on their loans.
This notion seems to pop up on a yearly basis, and it never goes anywhere for the same reason: the people proposing it have no feasible and equitable answers to some fundamental questions.
The University of Michigan is both a collection of a vast number of people and a collection of a vast number of buildings, many of them very expensive and technologically sophisticated. Virtually all of the buildings on campus, from the oldest to the newest, were built with state and/or federal funds; i.e., monies from taxpayers.
If privatization occurs, who are the owners? Who gets to select the owners? Is it simply a case of whoever has the most money gets to buy in? If it's owned by shareholders, is it through common, publicly-available stock, or privately-held shares?
And more directly, if taxpayers have financed the design and construction of the physical assets of the institution, who gets reimbursed by the new owners? Is the money returned to the state and federal coffers, or directly to those taxpayers who have contributed via their taxes? Or will it be like what was done after the demise of the old Soviet Union, where state assets were basically stripped away for kopeks on the ruble by the wealthy and the connected?
The singular identify of the University of Michigan is that it has always been one of the very best public institutions in the nation and world, and as such has always had to respond to a broad range of goals and constraints and demands which are nominally characterized as being in the "public" sphere. Privatization would effectively mean the end of that identity.
Last year Mary Sue Coleman was brought into my Philosophy class because my teacher worked for her as an advisor. She was asked the question of UM going private and said that UM would not be going private. Obviously things can change and she probably wouldnt have told us, even if there were plans in motion but FWIW, she said there were no plans to become private.
There is almost no chance that Michigan will privatize anytime in the foreseeable future. MSC seems set against it, so it unlikely to even be seriously considered until there is a new President, which hopefully won't be for some time. More importantly, given the difficulty of the process, involving public approval, the chances of the state willingly abandoning its flagship public University and voters giving up the chance for their children to have a significantly decreased tuition is laughable. Barring another economic crisis for the state, UM won't privatize.
This is all unfortunate, however, as the University would be in a far more competitive position if it were to privatize. Right now, the University is held back by its status as a "public" institution and its dedication to accept a certain percentage of in-state students. Michigan would be in a stronger position if it could accept its applicants based on merit, not where they are from. Michigan's acceptance rate is obnoxiously high because it is a public school. If you don't believe this would help Michigan, compare its undergraduate reputation to that of its professional and graduate programs, where in-state status matters much less. Furthermore, Michigan privatizing does not mean we will be losing students to MSU. Michigan is a much better school than MSU - we could still lure the best students from Michigan with the generous financial aid that could be offered if tuition prices were higher across the board.
But will the University go pubic? I think that's the biggest question.