Proponents of education reform in Michigan have explored various proposals to solve some of the most pressing problems facing the state’s public school system. Two of those problems are a lack of adequate incentives for schools to improve and student overcrowding.

School choice advocates have proposed to introduce market incentives into education by reducing political and financial barriers to parents’ ability to choose among a full range of government- or privately funded schools. According to this proposal, the resulting competition for student "customers" would spur all schools to improve. Public schools that lost students to privately funded ones would have to innovate to retain students and the state funding that goes with them.

Reformers concerned about student overcrowding have suggested that private schools could be used to reduce the load on the public school system without the need for new taxes to construct additional government schools. "Excess" students from public schools could be transferred over to existing, privately funded schools to help reduce class sizes and maximize resources.

Both of these proposals, however, are predicated on the ability and willingness of privately funded schools to accommodate additional students. To date, little research has been done to determine whether or not private schools 1) have the resources and capacity to take on more students, and 2) would be willing to participate in proposals to reduce public school overcrowding or expand their facilities to accept a growing number of families empowered with the ability to choose schools outside of the public system.

The findings of this Mackinac Center for Public Policy study reveal that privately funded schools in fact could have accommodated nearly 56,000 additional students, or more than three percent, of Michigan’s public school enrollment in the 1998-99 school year. These same schools also reported a willingness and ability to accommodate additional students and to expand in the future if demand required it.

The results of the study suggest that proposals to expand parental choice in education or use privately funded schools to ease overcrowding in government schools could be both practical and efficient.