Hike in housing fees outpaces tuition increases at many schools

'This is the untold story,' says one economist

At some colleges and universities the cost of room and board is rising faster than tuition is, NPR's Jill Barshay reports.

In the past five years, room and board prices at public four-year institutions have grown 9% above inflation. That rate is only slightly lower at private colleges, at 6% above inflation, according to the College Board.

Overall, housing prices grew about 20% at public and 17% at private institutions during the five-year time frame. By comparison, tuition rose 21% at public and 13% at private institutions in the same period.

"This is the untold story," says Richard Vedder, director of the Center for College Affordability and Productivity and an Ohio University economist. He points out that students who attend rural schools, in particular, often have few alternatives to university housing and many private colleges require students to live on campus for one or two years.

"I hate to use 'ripping students off.' But they're using their monopoly position to disguise the true cost of the price of college," Vedder says.

It is not possible to know if the institutions apply room-and-board revenue toward general operation costs, says Barshay, but there are clues. Nationwide, private universities reaped $600 million in revenue after costs from auxiliary enterprises last year, according to data from the National Center for Education Statistics. Public universities made $2.1 billion.

What's driving the price hike

University of Massachusetts (UMass) does not use housing fees to subsidize other costs, says spokesperson Ed Blaguszewski. Instead, he says, higher fees are used for:

  • Giving 3% annual raises to unionized dormitory and food-service employees;
  • Constructing new facilities and repairing old buildings; and
  • Switching to "sustainable" practices that cost more, such as using locally sourced food.

Experts say demand for luxury housing and gourmet meals are pushing up costs as well. For example, dining halls at UMass stay open until midnight regularly and have extended hours during exam weeks. Rated as No. 2 in the country for campus food by the Princeton Review, the university employs award-winning chefs.

That cost passes on to students. "Maybe I'm ungrateful. But I don't think it's worth the money," says Valerie Inniss, a UMass student who took out $11,500 in student loans this school year—none of which went to tuition.

Exceptions to the rule

Not all schools are increasing room and board prices, however. Purdue University has held theirs constant for the past three years, one of very few institutions to do so, says Barshay.

Beth McCuskey, vice provost overseeing housing and food, says she limits costs in three ways:

  • Centralizing dorm management;
  • Ensuring the five dining halls use the same recipes; and
  • Keeping up with building maintenance.

Ordering the same foodstuffs for each kitchen lowers procurement costs, she says, and streamlining dorm management allowed Perdue to limit the number of managers needed as well.

A major reason prices have stayed low is that the university reinvested in its buildings each year instead of deferring maintenance and allowing them all to become "antiquated at once," says McCuskey, who is also the VP of the Association of College and University Housing Officers International. In the past two decades, many schools were forced to "refurbish and build new," straining their budgets.

Avoiding construction of fancy accommodations helps as well, says McCuskey, who acknowledges her school built a luxury dorm. "There's been an arms race with housing, she says, adding, "It is very costly when you have one bathroom per person" (Barshay, NPR, 4/8).

The takeaway: At many colleges, the rise in price of room and board is outpacing tuition, reports NPR. For more on limiting facility and procurement costs, visit our University Spend Collaborative.

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