Universities have found a new way to make up for all the lost money. The latest buzz is dining fees being raised. University of Tennessee this year Tennessee imposed a $300-per-semester dining fee on about 12,000 undergraduate students. This extra money will help them to finance a $ 177 million student union and also help them achieve the position of “Top 25” Public Universities. To get rid of this expensive campus food, students have started opting for other options such as having huge breakfast or avoiding spending money in campus. Mr. Michael Miceli, who is a linguistic major, says that the thought of borrowing more money panics him to the core. He is among those 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.
Long Term Contracts That Benefit Both The Contractor And The University
Tennessee has a contract with its dining vendor, Aramark. It is an example of how universities are minting money and trying to make up for losses. Universities all over the nation are trying to get lucrative deals with giant dining contractor. These contractors offer commissions and signing bonuses. The amounts received from these helps to pay for campus improvements and academic programs. This is a new model of raising money is highly beneficial for the universities. It helps them replace the lost revenue as state funding for higher education is still below pre-recession levels.
The contract that Tennessee had with Aramark runs through 2027. Till then, Tennessee will get 14 percent of all food revenues plus $15.2 million in renovations. These renovations will be used to improve dining facilities, limestone cornices, clay-tiled roofing and copper gutters and for other repairs that form a part of campus reconstruction plan.
Stringent Terms & Conditions Govern the Contract
Even University of Virginia has a contract with Aramrark. The contract expands over a period of 20 years and will run through 2034. The University of Virginia recently got a $70 million contribution from Aramark, in addition to $19 million in renovations and another $19 million increase in annual commissions. Texas A&M announced a 10-year deal in 2012 with Chartwells. Chartwells is a subsidiary of the British-based Compass Group. Texas A&M received some whopping amounts of money that included a $22.7 million signing bonus and $25 million in capital investments.
The cost of all these contracts is borne by the students and is burning a hole in their pockets. It increases the expenses students have to make to get their college done. “When you keep tacking on this stuff, the cost of the plan goes up”, said Tom Mac Dermott. Tom is a dining consultant who works with universities. The contracts also reveal that all the money does not constitute an individual’s food. Colleges also use the money to create academic programs and scholarships, fund special “training tables” to feed athletes, pay for meals for prospective students touring campus and shore up their balance sheets. But the contracts are very strict and cannot be terminated. Some contracts have the clause that if they are terminated in between the period than a pro rata portion of the money must be repaid.
Though students can refund their money if they do not want to be part of the plan, but most of the students give in due to the temptation of the junk food. But some students find the price exhorbitant and unaffordable.
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