But it also faces a unique challenge, given its size and the needs of the state. UC doesn't have the same options as many other state systems, observes James J. Duderstadt, president emeritus of the University of Michigan, which he helped shepherd through its transition from full state support. Michigan's shrinking population of young persons allowed the university to ramp up its out-of-state population paying full freight (now more than 35% of undergraduates) while insulating state residents from rising tuition and fees.
Systemwide, out-of-state residents today account for only 7.6% of UC undergraduates. It's doubtful whether raising that percentage much more is politically tenable, given the overwhelming in-state demand for slots. Some experts also question whether UC really has enough appeal to attract a large cadre of nonresidents at private-university tuition rates, especially as seats in the most popular classes become scarcer. Facilities and other amenities would have to be upgraded, cutting into the profit margin from out-of-staters.
Nor will it be easy to supplement state funds from private sources, one of Yudof's goals. Most private contributions to universities, says Jane Wellman, director of the Delta Project, a Washington think tank on higher-education issues, target specific programs, not the general educational functions that are most affected by cutbacks in Sacramento. "Privatization means raising tuition," Wellman says. "There is no other major source of revenue."