It isn't just college tuition that's rising crazily. There's growing evidence that the prices of many other everyday items, such as hamburgers, are rising faster on college campuses than they are in the rest of the economy.
Why? Blame organic tofu, late-night pizzas, and bigger profits that are funneled to corporations or other parts of the university, say officials who run college dining services.
The College Board reported in late October that the average public university raised its tuition by more than $470 this fall, which is 6.6 percentage points greater than inflation.
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It also noted that the average price for room and board rose by more than $250 last year, at least 2 percentage points faster than the Consumer Price Index. Over the last decade, room and board charges have risen more than 24 percentage points faster than the average living costs of nonstudents.
Colleges say that student demands for fancier, bigger, and more technologically advanced living spaces have driven up dorm costs.
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There is no national survey of meal plan charges, because many colleges bundle room and board into a single bill. But many colleges across the country have raised meal plan contract prices far more than the 1.4 percent that food prices have eked up in the last year. Duke University and the University of Delaware, for example, raised their meal plans by more than 5 percent this year.
College officials and executives at the companies that manage campus dining facilities say there are seven major factors driving up the prices of college meal plans:
1. Fancier facilities. Colleges are replacing traditional cafeteria lines of aides spooning glop from steam tables with dining halls that feature chefs cooking students’ meals to order. "We don't call them cafeterias anymore. They really are restaurants," says Joseph Spina, executive director of the National Association of College & University Food Services. “One of the big trends is for colleges to hire executive chefs” from top culinary colleges, he adds.
2. More choices. "The days of students being fine with mystery meat and frozen vegetables are gone," says Maisie Greenawalt, vice president of Bon Appétit Management Company, which runs the dining services at about 80 private colleges. Students want many different ethnic, vegetarian, vegan, and religiously vetted options, she says. "Choice adds costs," she adds.
3. Better ingredients. Students are increasingly demanding organic, hormone-free and locally grown fresh foods, says Larry Moneta, Duke's vice president for student affairs. "Healthier products are more expensive," he says. Students are also pressuring college dining services that offer environmentally sensitive foodstuffs—such as fish—to buy from sources that sustain the ecosystem, Greenawalt says.
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4. Longer hours. Colleges are responding to students' hankerings for midnight pizzas and snacks by keeping dining halls open later. "It's nice to keep them on campus" instead of requiring them to venture out late at night, Spina says.
5. Restaurant services. A growing number of colleges are replacing the old "all-you-can-eat" buffets with restaurant-style charges for individual items. That reduces food waste and overeating. But it also requires colleges to hire more cashiers, which adds to labor costs, Greenawalt notes.
6. Profits for colleges. As states cut budgets, and private colleges scramble to find additional sources of revenue, many college officials are squeezing dining services for more of their profits. Ohio University's dining services, for example, contributed extra money to the college last year to help the reduce a budget gap, says Terry Conry, associate vice president. OU managed to limit its meal plan price increase to just 2 percent in 2010, he says. But, he adds, "We pay a significant portion of our revenues to the university…There is pressure everywhere."
[Read more about the impact of budget cuts on colleges.]
7. Profits for the vendors. Many colleges have turned operation of their dining services over to profit-seeking corporations such as Bon Appétit, Sodexo, or Aramark. Although the companies don't report how much they make from specific college contracts, they tell investors that managing college dining halls is quite profitable. The education sector "continues to show very solid top-line and bottom-line results,” Aramark chief financial officer Fred Sutherland told investors in May 2010, adding that "there is a lot of opportunity, particularly on the retail side inside our existing college campuses."
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