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It's not stupid, it's just not the norm yet.This is stupid to me. U of Michigan can do some type of exchange student arrangement with UCLA or some other school in LA. Public schools should stay in their lanes, or boundaries, as it were.
It is interesting that it's a state school. I wonder if it's still the same entity, or a different one for tax purposes. From what I know, LA doesn't have great MBA options (USC and UCLA are good, not great), but has plenty of money and people wanting MBAs. MBAs are profitable to the school since many tuitions are paid for by employers, professors can be adjunct, and graduates make lots of money.
Higher education is changing. It's better to be out in front. Schools will be closing or having to go downstream for lesser talent as the student population drops. Northeastern will now have a Manhattan branch, Dresel has a branch in Sacramento, Carnegie Mellon in Silicon Valley. I know none of these are state schools.
It would be short-sighted for state schools not to focus on future trends. Michigan has already realized that it's stupid to subsidize out of state students when kids want to come to their school regardless of price. Michigan's out of state tuition/fees and living expenses are over $80k which is on par with most good and elite private schools. UVa is similar. Michigan population is shrinking (or growing negligibly). The university needs to think outside the box.