University of Michigan being "cut loose" by the State. To become private school?

Submitted by James Burrill Angell on January 16th, 2011 at 3:22 PM

I've posted in response to other threads that I KNOW the University doesn't WANT to go private but has conducted studies as to what would happen IF the State of Michigan cut its funding. Well, despite the fact that the current governor has three degrees from UofM this article alleges that cutting off funding to the University is on the table (though not probable) as the State figures out how to deal with a $1.8 million budget deficit.

Even the mention of this makes me absolutely nauseous. To think that this would be the only state with its flagship University turned private. Absolutely pathetic. I hope Governor Snyder remembers he's a Michigan Man and keeps this from happening.



January 16th, 2011 at 7:57 PM ^

U of M has a nearly $9 billion dollar endowment, and the health system last year brought in 2.77 billion. The state is hurting bad so if they reduced the amount of state subsidies I think the University would still be fine and it could help out many other people around the state.


January 16th, 2011 at 8:07 PM ^

I graduated a few years ago as an out of state student, and one thing I noticed was that virtually all the in-state students left for either Chicago, New York or DC.  In fact, out of the few that stayed, a lot of them left after a couple of years.  I think that's a reason why this is being considered.  Why fund the school at all if most in-state students leave? 


January 16th, 2011 at 8:35 PM ^

America's education system is robbing alot of people of the American dream. Having to pay an arm and a leg can cripple a kid's financial future, or wipe out a parent's retirement savings. I know Michigan and many others in the US are elite institutions but its getting to a point where that doesnt matter if kids have to borrow 100k+ just to get a bachelors degree which is becoming more and more worthless.


January 16th, 2011 at 8:39 PM ^

And of course these politicians want to cut funding for the future for political gain today. You can cut education spending today and no one sees the damage for many many years. Long after the politicians that made the cuts are gone.


January 16th, 2011 at 9:06 PM ^

Education needs more funding -- not less.  

UM will be fine either way, but I would be surprised if UM went private.

It is truly sad that the cost of an undergraduate education continues to skyrocket (not unique to UM).


January 17th, 2011 at 2:09 PM ^

1. The University's property would become taxable. Ann Arbor would become a world class city with top of the line services. The U would be much much poorer.

2. The reason Mary Sue and her clique want this to happen...the U would be free to let in black applicants well under the cut-off. The Michigan constitution currently only allows race base admissions if required by federal law.

3. The U, over the years, is the result of untold billions of investment by the state. Who is willing to pay that back to us taxpayers?

Feat of Clay

January 17th, 2011 at 2:18 PM ^

(1) U-M would remain a non-profit organization.  It would therefore retain its current tax exemptions.

(2)  I have seen nothing that suggests MSC wants this to happen.  The senior administration of the university is proud of U-M's status and mission as a public institution.  As for admissions:  Of far more consequence would be the University's ability to freely recruit non-Michigan students.  You are right about there being a constitutional provision against sex- and race-based consideration in admissions, and a private U-M would have more freedom to admit students it found desirable for reasons of diversity.  Those numbers would be a small story compared to how U-M would change its residency mix.  In interest of clarity, there is no "cut-off" for qualification for admission.  Perhaps you are mixing U-M up with an institution with a different admissions system.   

(3)  I've never seen a good answer to that question and I'm curious myself.


January 17th, 2011 at 3:23 PM ^

Clay, I think I see where we talked past each other. Non profits, under many circumstances, are exempt from income taxes. Churches, under many conditions, are exempt from real and personal proptery taxes. Most other non profits are not.

The hospital complex would be exempt if it met a six factor legal test. The rest of the U is only exempt under MCL211.7n under one heck of a lot of tests and if the U doesn't use the property outside its non-profit founding documents.

Large portions of the North Campus and Bio Sciences, and most of the newly purchased Drug Labs, would most likely be taxed--building and equipment.

st barth

January 18th, 2011 at 5:41 PM ^

The University is older than the State by 20 years (1817 vs. 1837) and I'm pretty sure it will last longer than the State.

Probably would be good to cut the state loose and let the U go private.


November 3rd, 2015 at 3:22 PM ^

Michigan is not the only school headed toward privatization.  Even further along this route is the original state university, Virginia.  Thomas Jefferson originally wanted to create a national university system, as exists in France (for example the Grand Ecole Polytechnique).  But he was stymied by the conservatives of his day, but did succeed in achieving the creation of the service academies.

Like Virginia, the University of Michigan was originally founded to make quality higher education available to those not born to wealth.  Given the increasingly socially stratified and libertarian character of America in recent decades, for many schools like Michigan, that mission is now over.

The culture of U of M is much more elitist than it was when I graduated in 1979.  There was some thread of the university acting as a rich kids' school back then, but that has now become its dominant character.  Its future will be that of a gentry liberal/slightly conservative school that produces professionals at the grad level, and at the undergrad level to prepare the children of the elite for managerial careers or for further graduate study at Michigan or the Ivy League Plus schools.

The issue of whether to privatize will become a moot point in a decade, when the University's projection for state funding continues its linear trend toward zero state support.  At that point, the university management and faculty will clamor for privatization in order to obtain the benefit of autonomy.  In the past, the university presidents were content with some loss of autonomy in exchange for state support.  Withdrawal of state support nullifies that implicit contract.