Will public universities begin going private?

The New York Times has an interesting piece this morning on America’s top tier public universities and how they’re evolving in today’s economic climate, as costs continue to rise, and as state legislatures continue to slash support. There’s an extensive mention of the University of Michigan, but, before we get to that, here’s a clip to put things in context:

…Public universities have historically been underpriced: average in-state tuition is $7,020 this year. A re-evaluation had to happen, says David E. Shulenburger, vice president for academic affairs at the Association of Public and Land-Grant Universities, because the benefit has been to higher income families. “You can’t justify that subsidy for wealthier students,” he says. The trend, accelerated by the economic shakeup, is from cheap to what he calls “moderate” tuition rates, at least by private-school standards.

Mr. Shulenburger sees the tuition increases as part of a larger movement toward privatization of the most desirable flagships. With state contributions largely flat or down over the last 15 years, and enrollments and costs up, many top flagships are turning to nonpublic sources for money and, in some cases, accepting larger numbers of out-of-state students, who often pay twice the tuition of residents.

At the same time, applications are pouring in from students shut out by the stratospheric cost of private colleges. That’s generally a good thing. Flagships are attracting more wealthy and better-prepared students. Yet as the counterargument goes, a flagship’s traditional mission is to educate its own, especially a state’s low- and middle-income students. The evolution under way is putting some flagships out of reach for the students who were typically enrolled even a decade ago. Each year, the quality of students as well as the budget model skews closer to that of elite private universities….

And here’s what the article has to say about the University of Michigan specifically.

…The University of Michigan belongs to an enviable class of nationally prestigious public universities; many of its undergraduates picked it over the Ivy League.

Thirty years ago, the university began going through the convulsions other public universities are now experiencing. Today, it is largely protected from Michigan’s plummeting economy. Only 7 percent of its budget is provided by the state.

The transformation of the University of Michigan’s finances began with Harold T. Shapiro. In the mid-1970s, Mr. Shapiro, then a professor of economics and public policy at the university, studied Michigan’s economy and predicted that the state would lose tax income compared with the rest of the country in coming decades. He was right.

While the state trimmed a third of its support for the university in the 1980s, Mr. Shapiro, as the university’s president, worked to build a more secure budget base. Michigan increased private fund-raising and developed a tuition structure that took advantage of a growing number of out-of-state students, who now pay $36,163 a year in tuition and fees — about the same as Princeton.

James J. Duderstadt was Michigan’s provost during its transformation, and later served as its president. With an out-of-state mix of 35 percent, he acknowledges that Michigan looks less like a state university. “Folks from out of state are attending a private institution,” he says.

It’s likely, actually, that most Princetonians pay less than an out-of-state Michigan student. While Michigan’s aid packages are generous, no public can match the deep coffers of an Ivy League university. Forty-five percent of out-of-state undergraduates at Michigan are affluent enough not to qualify for financial aid, compared with 20 percent of residents.

Still, Mr. Duderstadt says, the university fulfills its public mandate by helping to drive the state’s economy and continuing to educate Michigan’s top students. While lawmakers still grumble about the large number of students from other states, the university, he says, didn’t have alternatives. Earlier this year, state lawmakers studied the idea of taking privatization to the next level, by eliminating annual state funding. The university remains public, for now…

The last time this particular hornets’ nest was kicked, as I recall, was back in April, when Time magazine suggested that the University of Michigan might be inclined to go private. U-M President Mary Sue Coleman was quick to squash the idea at the time, but, given the financial state of Michigan, it’s one that seems to linger. Personally, I very much like the idea of U-M staying a “state” school. I just hope that our state can turn itself around before it’s too late.

[Our previous conversation on this subject can be found here.]

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25 Comments

  1. Left Cross
    Posted November 2, 2009 at 2:25 am | Permalink

    Hey, it’s only right. Wealthier people are naturally smarter, which gets them more wealth. It’s like, human nature n stuff. Whatever. Leave all those other people behind. We need better schools, or something …. blah blah blah.

  2. Artemis Fogbottom
    Posted November 2, 2009 at 6:59 am | Permalink

    As long as we’re on the subject of university education, I found this fact of interest….

    The salaries of just 5 Goldman Sachs Execs could put about 4000 kids through college (@$20k/yr).

    http://dealbook.blogs.nytimes.com/2008/03/07/goldmans-golden-five-what-they-earned/

  3. Steph
    Posted November 2, 2009 at 12:14 pm | Permalink

    Great public universities are vital to the well being of our nation. It’s a shame that states, like Michigan, don’t see that value.

  4. Lecturer
    Posted November 2, 2009 at 4:19 pm | Permalink

    The University has to do what’s necessary to stay alive and thrive, and if the state isn’t willing to share the costs, then schools are going to have to adapt. And I’m happy to see that the people at UM have been planning on this eventuality for so long. Still, though, I think that everyone pays the price when it’s just the rich who are attending college. The beauty of public schools is, to a large extent, in their diversity. They’re great because they pull people from every walk of life, at least in theory. When everything goes well, Freshmen are forced to consider new ideas, and deal with people they normally wouldn’t. That all goes away, though, when we’re just seeing white, wealthy students from the east coast. I don’t think we’re there yet, but people should be concerned about what’s on the horizon.

  5. Alice
    Posted November 2, 2009 at 4:24 pm | Permalink

    I believe that the University of Michigan is right at the very bottom when looking at schools receiving state funding. Even red states do a better job of supporting higher ed.

  6. Peter Larson
    Posted November 2, 2009 at 5:25 pm | Permalink

    Personally, I think that it would be great if the UM were financially robust enough to do without state funding, while retaining their public status. Maybe then the state could take some of that money and invest more in it’s second tier state schools, which arguably educate more people who might not otherwise attend university at all. Children of wealthy people will always go to expensive schools. Children of poor families who excel at their studies will always have opportunities to attend top tier universities through scholarship programs and financial aid. However, fine institutions such as EMU operate under ever shrinking budgets and I would argue that open enrollment institutions such as EMU, CMU or WMU do more to educate a large population which receive more benefit from a college education.

  7. Public, Not Private
    Posted November 2, 2009 at 7:47 pm | Permalink

    Public universities like the U-M should not be allowed to “go private,” unless and until they are also willing to pay back the BILLIONS of dollars in support that Michigan taxpayers have provided over many generations to allow them to purchase property, build buildings and other facilities, etc.

  8. Artemis Fogbottom
    Posted November 2, 2009 at 8:12 pm | Permalink

    I’ll try that at the grocery store the next time I’m there. I’ll just tell them that I’ve been buying groceries from them for 30 years, and that I now demand to reap the benefits of having invested so much in the Meijer empire.

  9. Oliva
    Posted November 2, 2009 at 8:40 pm | Permalink

    They just showed Coleman’s whopping salary on the local news: $553,000. Whew. (She’s also on numerous boards.) Seems like U of M has lost some luster during her time there, but it happens to coincide with the state’s very grueling recession decade and a trickily worded ballot initiative that banned affirmative action several years back. (She did fight against the initiative, though it seemed not so remarkably. I wonder if it wouldn’t have gone through had [the very brilliant and humanistic] Bollinger still been president.) And seeing as the school’s been able to attract so many out-of-state students at the high price tag could say that Coleman’s doing what she’s paid to do.

    Would love to hear what others think. I could use greater perspective.

  10. Oliva
    Posted November 2, 2009 at 8:42 pm | Permalink

    Oh, I realize that it was a state ballot initiative so not directly a matter for a university president, but in this case it was–given the Supreme Court cases that bear the previous president’s name and that the ban would affect U of M and was designed to affect U of M in particular.

  11. Alan
    Posted November 2, 2009 at 8:57 pm | Permalink

    I work at the University of Michigan and, from my perspective, Coleman is doing a good job. She really comes across as caring about the institution and the students. She’s not at all a polarizing figure, which is good. People seem to really like and respect her, and in a decentralized environment like ours, that’s a good thing. With all of that said, however, I think that she could stand to be more visionary and inspiring.

    And, for what it’s worth, presidents of other universities of our caliber make considerably more money.

  12. just Josh
    Posted November 2, 2009 at 9:24 pm | Permalink

    I don’t see how the University president had much influence over the affirmative action decision. It’s not like she was presenting the arguments before the court.

    And yes, her salary might seem high, but I believe most years she doesn’t take her raise, or she donates it back to the university.

  13. Posted November 2, 2009 at 9:31 pm | Permalink

    If you want to really get worked up over something, check out what Ohio State pays their President.

  14. Oliva
    Posted November 2, 2009 at 11:59 pm | Permalink

    Thanks, Alan. It’s so easy some days to see things too simplistically, when how is a huge university like U of M, with a gargantuan medical system and other big parts, even remotely simple? Plus, there are tons of very wonderful people working there or associated with U of M, and there’s an accumulation of feeling (worlds of learning and delight, etc., over many years) that hangs around. Just have wondered sometimes about Pres. Coleman. What you describe sounds very good.

    just Josh, you have a point, but it seems like it was a little more pointedly something she should be dealing with, and she just didn’t seem to have her heart in it–but “seem” and “heart” signal I really don’t know. I’m too sleepy to recollect the history anyway, but she was vocal and involved when the cases went to the Supreme Court, and the state initiative was going to affect U of M, which had just had a very long national fight about it, so it seemed like her business to push hard about the ban. But maybe not, and I appreciate the point.

  15. Peter Larson
    Posted November 3, 2009 at 7:24 am | Permalink

    What would you like to pay the President of a multi-billion dollar institution and the largest employer in Washtenaw County? People are always shocked when they find out that someone makes more money than everyone else. Remember, you get what you pay for. I guarantee you that if the Pres of UM was only offered $60K, we wouldn’t get many qualified takers.

    As for Affirmative Action, I supported the abolishment of the rules at the time. Since then, they have been rewritten and the strategies that are used now (first generation students, low income, etc.) make much more sense than merely going by something as subjective as the color of one’s skin.

    First coffee…

  16. Peter Larson
    Posted November 3, 2009 at 8:19 am | Permalink

    OK, scratch the part about affirmative action. I have been living in such a deep academic bubble that I didn’t even know that there was a Supreme Court action this year.

    I need to get out more.

  17. Posted November 3, 2009 at 8:28 am | Permalink

    “Public universities like the U-M should not be allowed to “go private,” unless and until they are also willing to pay back the BILLIONS of dollars in support that Michigan taxpayers have provided over many generations to allow them to purchase property, build buildings and other facilities, etc.”

    On the other hand, U-M going private would put a lot of land back on the tax rolls in A2.

  18. Curt Waugh
    Posted November 3, 2009 at 11:43 am | Permalink

    Private college are still non-profit. So, still no good for the tax rolls.

    And Peter is right about Coleman’s pay – she gets paid a lot less than a CEO of a like-sized company. She’s a bargain (and not the highest-paid employee at the U, even excluding coaches). Deal with it.

    But the university can’t just walk off with this state’s investment. If they want to go private, they should have to make some sort of long-term deal with the state to continue to offer discounts to residents and some guarantee of enrollment to offset the state’s long-term investment. Seems reasonable.

    Don’t expect anything reasonable from our state government, though.

  19. Lib
    Posted November 3, 2009 at 2:23 pm | Permalink

    Wait, why are we paying for the highways with our taxes when they’ve already been built?

    I don’t understand.

    You mean it costs something to keep things running?

    This argument that the University owes the state of Michigan something because they were deeded land in 1800’s is ridiculous.

  20. Curt Waugh
    Posted November 3, 2009 at 4:28 pm | Permalink

    Lib, this is all hypothetical, of course, because it seem pretty unlikely that the U-M would seriously consider becoming private, but:

    It’s not the land deed in the 1800’s that’s the issue. It’s the millions of dollars that the state (we) give to the U-M every year. Much of that money has been used for durable improvements (buildings, roads, heat, electricity, landscaping, etc.).

    To use your example of the roads: If Michigan suddenly decided to make M-14 a private highway, they wouldn’t just give it away, they’d sell it to the highest bidder. It’s our collective land. It’s our collective taxes and effort that got it there. So, we should be reimbursed for it, plain and simple.

    The U-M is a multi-billion dollar fixed asset, not just a yearly expense. No way in hell they can just walk away from their owners (us) with no compensation.

  21. Brackinald Achery
    Posted November 3, 2009 at 6:12 pm | Permalink

    Since we’ve all benefitted from the public redistribution of wealth in some way, shape, or form, do we owe the State of Michigan something if they run out of money to give us? Should I have been squirreling away money to buy myself back from you all, in case the State goes broke and I have to go private?

  22. Oliva
    Posted November 3, 2009 at 6:40 pm | Permalink

    Little piece about race in higher education; the author talks about UM (went there for a couple years),
    http://www.washingtonmonthly.com/college_guide/blog/yes_race_still_matters.php.

  23. Left Cross
    Posted November 4, 2009 at 1:45 am | Permalink

    Fuck private institutions and fuck public institutions. Same broken system.

  24. Nik Estep
    Posted November 4, 2009 at 3:18 am | Permalink

    I am an EMU student who has taken a number of classes in the Computer Science, Art, Math, and Education departments/colleges and I can say that EMU does a good job of working with what they get. Tuition is going up and I wonder why they need to have two building renovations and an indoor practice field construction going on at the same time, but the classes are taught by good professors (most of the time). I’ve always viewed U of M students are pretty stuck up, so let them go private, give EMU more of the money. I think the school works harder to do it’s job.

  25. Kaptain
    Posted December 21, 2010 at 6:37 pm | Permalink

    I don’t have any links at the ready, but this subject has been popping up a bunch lately in reference to UM.

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  1. […] university funding decrease by an additional 22%, prompting speculation on the part of many that the University of Michigan would eventually make the choice to become a private institution. (The currently proposed Republican budget, it should be noted, would see university funding go […]

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