With the state’s budget deficit growing exponentially, some extreme methods of saving money have been floating around the state legislature. Among them is the idea of privatizing the University. The Legislative Commission on Government Efficiency was charged with cutting the state’s higher education budget, and the fourth suggestion on its list was to cut the University loose from its annual $327 million drain on the state budget and making it a private school.
This possibility obviously has quite a few hurdles to clear before it can become reality, the biggest of which may be the constitutional amendment required to let the University go. On the other hand, a private University of Michigan would also have many opportunities that a public university would not. These include offering more financial aid, giving Michigan taxpayers a much-needed break and allowing the University to resume its preferred policies toward minority enrollment and same-sex benefits.
One of the biggest concerns about the University becoming a private institution is the elimination of its significantly discounted in-state tuition rates offered to state residents. With 60 percent of students at the University paying in-state tuition rates — and the discount about $23,000 per person per year — this concern is well-justified. But at the same time, the increased tuition rates would enable the University to offer more generous financial aid options. If the University were to raise all residents’ tuition to out-of-state levels, it would obtain more than $504 million in additional revenue, much more than the $327 million the University gets from the state. The additional $187 million could then be used to substantially subsidize the attendance costs of low-income students who so desperately need aid even to pay in-state tuition rates. The University currently spends only $184 million on financial aid.
Discounted tuition rates should be determined based on who needs them most rather than who lives in the state. The Office of Financial Aid’s website states that the University “does not have sufficient funds to meet the full demonstrated financial need of nonresident students directly.” And yet it does bend over backward to help residents of Michigan. This system, in which the University especially focuses on in-state residents, seems antiquated. In an era of globalization, when students frequently travel across the country to attend college, why is the University still focusing on serving local residents instead of the local and national communities equally?
The common justification for this discrimination is somewhat valid: Michigan residents pay taxes to the state that fund the University. But this doesn’t make much sense — why should taxpayers who aren’t attending the University pay for those who are? A better system of financing is one in which the University charges equal tuition to all and offers financial aid based on need, not residency. This way, the University can be accessible to those living outside the state, and taxpayers who have nothing to do with the University won’t be forced to pay for it.
Another benefit of a private University of Michigan would be the end to discrimination against the LGBT community and minorities. Separating itself from the state would allow the University to also separate itself from the state’s bans on same-sex benefits and affirmative action at public institutions. Not only would the University be able to attract the best out-of-state students, but it would again be able to attract LGBT faculty who may currently feel dissuaded from coming to the University because of the ban. At the same time, the University would be able to continue its legacy of racial diversity and be able to take race into account in its application process. In terms of reaching out to minority students and LGBT faculty, the University’s status as a public institution has forced it to adopt policies against these groups.
The University is stuck in a system in which it is forced to give priority to residents of the state instead of treating all students equally. This structure also seems to be hindering it from attracting the diversity it desires for its campus. A private structure for the University seems to have many benefits, including the ability for the University to offer the financial aid that students need. In the end, the fact that the University is a public institution is preventing students from coming here, whether they be a minority, gay or from out-of-state.
Patrick Zabawa can be reached at pzabawa@umich.edu.