Student Fees Drive College Costs, Campus Development

Since 2000, student fees have grown faster than tuition in percentage terms. Fees rose 95 percent at public four-year colleges (and 61 percent at private colleges), according to a study by Robert Kelchen, an assistant professor of higher education at Seton Hall University.

With tuition bills arriving as the fall semester starts, students and parents might notice a line with a pretty big number next to it: student fees.

During their college search, many prospective students tend to pay attention to tuition. But in the last decade, fees have started to make up a larger share of the overall bill, particularly at public campuses.

Since 2000, student fees have actually grown faster than tuition in percentage terms. Fees rose 95 percent at public four-year colleges (and 61 percent at private colleges), according to a study by Robert Kelchen, an assistant professor of higher education at Seton Hall University. Because the sticker price is often much lower at a public college than a private institution, the hike in student fees hasn't gone unnoticed.

"Student fees have traditionally been used to fund specific campus programs such as student unions and recreational facilities," Kelchen wrote in his study, "but the number and types of fees have increased substantially over the past two decades."

Those include technology fees, library fees, and athletics fees. Nearly half of all subsidies public universities provide to athletics programs come from student fees. Public colleges like using fees when they need to raise overall prices because they typically get to keep the revenue generated from fees, unlike tuition dollars which are sometimes funneled through state coffers. What's more, students usually get to vote on new fees or fee increases. Many of these measures easily pass because the students who vote mostly have graduated by the time the fees are in place.

As Kelchen noted in his study, fees are a popular way to pay for amenities, such as recreation centers and student unions, needed to keep up with competitors. This arms race on so-called consumption amenities - so named because they have no lasting value for students - helps attract relatively low-achieving, high-income applicants who do not receive large financial-aid packages, according to researchers, but raises the cost for everyone else, especially low-income students struggling to pay bills.

Even fees of a few hundred dollars can cause low-income students to quit school. A recent analysis by the 11 public universities in the University Innovation Alliance, including Michigan State, Ohio State, and the University of Texas, found that nearly 4,000 seniors with good grades are at risk of dropping out because they are carrying unpaid balances of less than $1,000. (This month, the alliance announced it is going to test the idea of micro-grants for students who are just short of paying their bill to determine if it helps them graduate on time.)

Whether fees will keep going up is unclear. On one hand, Kelchen found that some public colleges are using fees as a revenue source to pay for core operations that are no longer covered by state appropriations. On the other hand, there is evidence that colleges are tiring of the amenities arms race. Campus construction appears to be slowing.

"The last three years represent the three leanest years of new construction since at least 2000," said Jay Pearlman, an associate vice president at the higher education construction consulting firm Sightlines.

Perhaps students are frustrated with higher fees. More likely, colleges have built all the amenities they need for the next decade. After all, campuses only need one recreation center with a climbing wall, but they require multiple classroom buildings.

Higher education as an industry is also heading into a lean period of growth. Enrollment has fallen five straight years. Last spring there were 81,000 fewer high-school graduates than the year before. After decades of a fairly steady upward expansion in the number of high school graduates nationally, in the next decade only the South and to a certain extent the West will account for nearly all the growth in the high-school population. At the same time, the Northeast and Midwest - home to the highest density of colleges - show a continued and steady decline.

This demographic trend, along with an increase in the number of low-income students, will require colleges to compete more on price. And when that happens, prospective students and their families will likely pay more attention to all the ways they are being charged by schools, including the multitude of fees.

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