NCPA - National Center for Policy Analysis


June 9, 2004

Privatizing the University of Michigan would save taxpayers $320 million per year, plus millions more in construction costs, says the Mackinac Center, a Michigan nonpartisan research and educational institution.

Cuts in state support are already pushing public universities toward more private models of operation whether they like it or not. The trustees of Michigan's own Lake Superior State University have discussed the idea. Other states have already considered or enacted similar measures, says Mackinac:

  • South Carolina has given all 13 of its public universities permission to go private.
  • The University of Colorado System (which oversees four colleges) has a contingency plan to privatize in 2009.

Some argue that total privatization would make college unaffordable for many. However, according to observers:

  • Over half of the university's freshman class comes from families with annual incomes over $100,000 per year.
  • Tuition increases could help low-income students by allowing administrators to set aside more gift aid and discount tuition for them.
  • The university could sell its hospital, valued at about $600 million, while the Nursing and Kinesiology schools could continue to be taxpayer funded.

Moreover, privatization would likely enable the university to attract more professionals and prestigious research. Indeed, the University of Michigan, ranked 8th by U.S. News and World Report in 1987, currently ranks 25th.

Source: Lance Wieslak and Michael LaFaive, "Privatize the University of Michigan," Viewpoint on Public Issues, Mackinac Center for Public Policy, March 1, 2004.

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