“I think this recent NYT article re. meal plan costs for students shows that many not-for-profit institutions aren’t any more virtuous than our government or for-profit institutions. I agree with the President…
This unnecessarily raises (essential food and education) costs for some of our poorest Americans.”, Mike Perry
December 5, 2015, Stephanie Sauldec, The New York Times
Meal Plan Costs Tick Upward as Students Pay for More Than Food
Fees from meal plans are helping to fund a $177 million student union at the University of Tennessee, Knoxville, already in progress. Credit Joe Buglewicz for The New York Times
KNOXVILLE, Tenn. — Before his 35-mile commute through Appalachian hills to classes here at the University of Tennessee, Michael Miceli eats a gigantic breakfast. It is his way of getting through the day without spending money on a campus lunch.
Food deprivation is merely one trick Mr. Miceli uses to minimize his college debt, now creeping past $22,000. So the $300 bill he got from the university this semester — for food — sent him into a tailspin.
“I was in near panic at the thought of having to borrow more money,” said Mr. Miceli, 23, a linguistics major.
For the first time this year, the University of Tennessee imposed a $300-per-semester dining fee on Mr. Miceli and about 12,000 other undergraduates, including commuters, who do not purchase other meal plans. The extra money will help finance a $177 million student union with limestone cornices, clay-tiled roofing and copper gutters, part of a campus reconstruction plan aimed at elevating the University of Tennessee to a “Top 25” public university.
Michael Miceli is among the 12,000 students who are being charged $300 per semester for a mandatory plan to use campus dining facilities at the University of Tennessee, Knoxville. Credit Joe Buglewicz for The New York Times
Tennessee’s contract with its dining vendor, Aramark, is just one example of how universities nationwide are embracing increasingly lucrative deals with giant dining contractors, who offer commissions and signing bonuses to help pay for campus improvements and academic programs. It is part of a new model of raising money through partnerships with private vendors, officials say, and with state funding for higher education still below pre-recession levels, a way to replace lost revenue.
Under its contract, which runs through 2027, Tennessee will get 14 percent of all food revenues plus $15.2 million in renovations to dining facilities.
In exchange for signing a 20-year contract that runs through 2034, the University of Virginia recently got a $70 million contribution from Aramark, based in Philadelphia — in addition to $19 million in renovations and annual commissions increasing to $19 million a year. Texas A&M announced a 10-year deal in 2012 with Chartwells, a subsidiary of the British-based Compass Group, that included a $22.7 million signing bonus and $25 million in capital investments.
Universities frequently announce the windfalls with great fanfare, but critics say the cost gets passed on to students and contributes to the expense of college. Tom Mac Dermott, a dining consultant who works with universities, said upfront payments were built into the price of the meal plans. “When you keep tacking on this stuff, the cost of the plan goes up.”
President Obama mocked gourmet college food in a speech in February at Ivy Tech Community College in Indianapolis, suggesting that it raised college costs. And meal plan fees are increasing annually at many schools, driven partly by demands that food be locally sourced, freshly made and hormone-free.
Yet the particulars of the contracts reveal that much of the meal plan cost does not go for an individual’s food. Colleges use the money to shore up their balance sheets, create academic programs and scholarships, fund special “training tables” to feed athletes, and pay for meals for prospective students touring campus.
Like many such deals, Texas A&M’s agreement with Chartwells comes with a catch, Mr. Mac Dermott said. If Texas A&M wants to cancel the deal, a pro rata portion of the money must be repaid.
“Suppose the operator isn’t doing well over time?” Mr. Mac Dermott said. “The university can’t get rid of them. The investments are made on the guarantee that if the contract is terminated by either party, the client will return the money. That’s not a gift.”
But Phillip Ray, A&M’s vice chancellor for business affairs, said there was no clawback if the contract were terminated for cause. “People say, ‘You’ve signed this big deal, now they own you,’ ” Mr. Ray said. “Not at all. We call the shots.”
In 2013, the year after A&M entered its agreement, several dining facilities there were temporarily closed by the county health department, which found rodent droppings and a roach infestation.
Other colleges have deals that offer sweeteners — renovations to the president’s house, private parties catered for employees, free meals for athletic officials in exchange for free football tickets.
These arrangements, which auditors have criticized, can create revenue streams outside the normal budgeting process for funding pet projects, raising the potential of abuse.
At South Carolina State University, a historically black institution, a 2014 audit found that students paid $343 a year in “hidden costs” for food. The money was rebated to the institution by its vendor, Sodexo, a French company, partly to pay for a $5 million wellness center, which was never built. The university, under new leadership, said it has ceased the practices described.
Students line up for meals at the presidential court dining facility on campus. Credit Joe Buglewicz for The New York Times
An audit this year at the University of Louisiana at Lafayette found that the food vendor catered free parties for children of a university employee while inflating bills to the university. In a response to the audit, the university said the employee had repaid the fees.
For food vendors, one of the critical components in turning a profit is a guaranteed revenue stream.
Hofstra University on Long Island announced in 2013 that it would require a minimum buy-in from all residential students. Brandeis University in Waltham, Mass., will require participation by even seniors who live in dormitories with kitchens next year, said Skyler Golann, chairman of the student dining committee.
“There’s definitely been a backlash,” said Mr. Golann, a sophomore from Hinesburg, Vt. Brandeis said the requirement would help pay to renovate dining halls without increasing tuition and other fees.
This is how mandatory meal plans have become a political issue, both on campus and off. The New Jersey General Assembly last year adopted a ban on mandatory meal plans, although it was never approved by the Senate.
“Some colleges were particularly egregious in requiring high-cost meal plans,” said Assemblyman Joseph P. Cryan, who sponsored the legislation. Meal plans at some private schools cost more than $3,000 a semester.
The mandatory meal plans that have created the biggest controversies are those imposed on students who live off campus. One of the first protests arose in Alabama, where students at several universities sued to block the plans, but the Alabama Supreme Court ruled against them in 2011.
Danny Evans, a Birmingham lawyer for the students, said that since his lawsuit, the idea has “gone viral,” spreading to other colleges. This year, in addition to the University of Tennessee, colleges ranging from Loyola New Orleans to Suffolk County Community College on Long Island — a commuter school with no dormitories — have announced mandatory commuter meal fees.
Responding to complaints, administrators said dining was important for commuters because it fostered campus community, citing studies showing that students with meal plans stay in school longer.
Administrators here at the University of Tennessee, where a $1,899-per-semester meal plan is mandatory for freshmen who live on campus, first floated the requirement that other students buy a $300-per-semester meal plan at a meeting two years ago. Grant Davis, a student who attended the meeting, at which Aramark served lobster ravioli, said, “We knew we were being greased.”
Students protested the plan, garnering more than 1,000 signatures practically overnight on a petition titled “Don’t Force Feed Us.”
Phase 1 of the new student union building, heralded as the cornerstone of a campus transformation, opened this year, with a Chick-fil-A, Subway, Qdoba Mexican Grill, Starbucks and several other restaurants.
Students can get refunds if they do not eat the food, but experience at other schools shows that most succumb to the fast-food temptations.
Mr. Miceli, a senior from Dandridge, Tenn., intends to ask for a refund.
Even so, he said, he regards the money as a loan to the university that he could not afford.
A version of this article appears in print on December 6, 2015, on page A1 of the New York edition with the headline: Colleges Pile Renovation Costs Onto the Plates of Students