Reforming University Dining Plans: A Debit-Card Proposal

Overview of Current Dining Plan Structure

Freshmen and members of the Corps of Cadets at the university are required to select a dining plan prior to attending. Should a student fail to select a plan by the first of August, they are automatically assigned to the Good Bull plan, which includes 120 meals — approximately seven to eight meals per week. Each plan created by university dining has three tiers. The various dining plans include: (1) Old Army; (2) Good Bull; and (3) Non-Reg. The number of meals varies, ranging from approximately two hundred meals to ninety meals each semester. The Old Army meal plan is the most expensive, costing $2,070.00, and provides the student with $500.00 in dining dollars each semester. At the lower end of the spectrum, the least expensive plan costs $1,090.00 and provides $300.00 in dining dollars, or ninety meals per semester.

Statement of the Problem

The problem experienced by students under the current dining plan structure is that dining dollars remaining at the end of the fall semester may be carried over to the spring semester only if the student purchases the same dining plan in both semesters. Dining plan meals, however, do not roll over — leftover meals are simply lost. Meals are not eligible for conversion into dining dollars, and dining dollars cannot be exchanged for cash.

Background: National Context of College Meal Plan Issues

According to Kaib (2014), university meal plans "are just like Obamacare — across America, college kids are ripped off by campus meal plans" (p. 1). Students are reported to be faced with "limited choices, high prices, and business monopolies on campuses. The quality is low, the cost is high, and lines are far too long" (Kaib, 2014, p. 1). Campus officials at American University, for example, decided not to renew their food-service vendor contract following years of complaints. A new company was contracted based on promises of better food and service, with university officials assuring students that conditions would improve — however, that has not been the case. Campus dining across the United States is anything but a free market; on-campus dining has been described as "essentially a duopoly," with food vendors and local businessmen running dining outlets on campus, and students with meal plans paying more for their food than cash-paying customers purchasing the same items.

It is reported that since students who have meal plans "are typically somewhat insulated from the costs" — due to college loans and parental support — they are invariably overcharged by university dining departments. For example, students at American University holding the 150 meal-swipe plan pay in excess of $13.00 per meal. That plan can be used to purchase burger meals, Subway sandwiches, chicken tender meals, and other food options; clearly, however, these same meals would cost far less than $13.00 if purchased with cash. These types of problems are experienced by students at universities across the country.

The Massachusetts Daily Collegian reported in January 2013 that "students are losing almost $2.00 for every swipe they use at [on-campus] outlets" (Kaib, 2014, p. 1). Notably, the United States Department of Agriculture reports that the cost to feed a family of four healthily ranges between $146.00 and $289.00 per week, whereas students on the Value Meal Plan at American University pay in excess of $153.00 per week for food for themselves alone. Students are therefore spending enough to feed a family of four per week on their individual meals under the university meal plan.

A report published by Consumerism Commentary notes that for students to realize a meal plan's full value relative to its price, they must "eat every meal and use every point, and that's not a realistic expectation" (Kaib, 2014, p. 1). Kaib (2014) further explains:

"The meal swipe system at most universities is similar to health insurance, in the sense that it creates a third-party payer market. The person making the transaction, the student, doesn't respond to market incentives because they aren't the ones paying for the food. Prices for the meal plans are included in the overall bill that students or parents have to pay. And because it is on top of other expenses, it is easy to overlook the huge expense of these plans. Students who live on campus are often individually mandated to purchase a plan, which sounds a lot like Obamacare, doesn't it? Just as distortions occur in the healthcare market because of third-party payer, so too are distortions present with on-campus dining. Because they are being overpaid for lower-quality food, food service providers have little economic incentive to improve quality or lower costs." (p. 1)

Porter (2010) reports that according to the Wesleyan University business office, "simple calculations reveal that students with meal plans pay more for each meal than those who pay with cash" (p. 1). A full meal plan costs approximately $1,809.00 per semester. As Porter (2010) details:

"At this rate, the Block 150 plan, which is the most popular, costs $10.23 per meal. The Block 200 plan costs $8.55 per meal. This semester, 94% of residential students selected one of these two plans. Only 3% of residents selected the 23 Meal plan, which costs $6.03 per meal and limits students to using one meal per meal time. For those who pay cash, dinner in the Baldwin dining facilities costs only $7. Breakfast and lunch are even cheaper at $5 and $6, respectively. Wildcat allows students to mix-and-match entrees, sides, and drinks, but the most expensive combination would cost no more than $7.72 if paid with cash. The priciest meal on the menu at Mario's totals $7.07. The resident district director for Pioneer College Caterers, Chris Lampson, acknowledged the discrepancy between the price paid by students and the à la carte price." (p. 1)

It is noted that missed meals were factored in so that costs could be kept down; however, the school's prices are not based on a per-meal basis.

Landes (2014) reports that college meal plans offer genuine convenience: "A student's food costs are wrapped into each semester's tuition bill, allowing them to focus on academics and college activities rather than finding the money for each meal. Many colleges offer similar meal plan choices, and the two most popular options are plans that offer either three meals a day or two meals a day. In addition to the ability to swipe a card to qualify for a meal, many dining plans offer points to be used for additional food expenses, whether in a dining hall, a campus fast food establishment, or a convenience store" (p. 1).

However, meal plan prices vary considerably between schools, and meal plans are "expensive, and most students don't take full advantage of them" (Landes, 2014, p. 1). Landes (2014) notes that at some schools, two meal plans may cost the same amount, with the difference lying in the number of "points" one receives for extra meals. The following table provides examples of meal plan costs at several universities.

Figure 1: Meal Plan Costs at Selected Universities (per semester)

College — Two Meals per Day / Three Meals per Day
Ithaca College — $2,882 / $2,992
Rutgers University — $2,035 / $2,190
SUNY Potsdam — $2,185 / $2,250
West Chester University — $1,189 / $1,281
Yale University — $2,600 / $2,600

Source: Landes (2014)

Many universities require students living on campus to sign up for a meal plan because these prices "not only pay for the food, but help defray the college's costs of running dining halls on campus, and all students share these costs regardless of whether they use the dining halls" (Landes, 2014, p. 1). The majority of universities allow the student to choose between a two-meal-per-day plan and a three-meal-per-day plan, with additional options that offer fewer meals combined with varying amounts of flex or meal points.

Williams (2013) reports that "only one-third of 3,400 U.S. college students say they're satisfied with their meal plans, found a survey by food industry research firm Technomic. But schools are finding that to address the problem, they need to go beyond simply improving what winds up on diners' plates" (p. 1). According to food service consultant David Porter, "Sometimes it's not the food itself that can make or break a school's dining program; it's where and how it's available on campus" (Williams, 2013, p. 1).

Porter, who heads a firm specializing in university campus dining, notes that "more college and university administrators are reexamining their school's dining plan to better fit the modern student, and as a result keep enrollment and recruitment high" (Williams, 2013, p. 1). A positive dining environment has been shown to affect recruitment numbers, retention rates, and alumni relations. Studies have demonstrated "that when freshmen have a positive social experience and make friends at school, they are more likely to return as sophomores. Sitting down together and sharing a great meal is central to that" (Williams, 2013, p. 1).

Williams (2013) identifies five trends for ensuring a positive on-campus dining experience:

(1) Operating on students' time. Dining halls that are open for only a few hours often result in students being unable to use their plans, making the meal plan a waste of money. Williams (2013) notes that since the beginning of the 2013 spring semester, two food trucks "created especially by Bon Appétit have been hitting four highly populated spots along two routes on campus between 10 a.m. and 5 p.m. The trucks, which have been well-received, have rotating menus, with tacos, sliders, and vegetarian options now the most popular choices" (p. 1).

(2) Providing a four-star experience. Porter reports witnessing "four-star restaurants and high-end food courts on campuses — with high-quality food as well as seating, flooring, and lighting selected to create the right ambiance" (Williams, 2013, p. 1). Washington State University, working with Bon Appétit, added Ibby's Restaurant in 2008, which Dining Services Manager Paul Schimmele describes as a great addition to the campus. The institution also has three large cafeteria-style dining halls and more than a dozen smaller eateries to serve its 14,000-plus undergraduate and graduate student population (Williams, 2013).

(3) Following up on feedback. Consultation with student organizations and faculty members is essential. The dining department has also held food forums and met with students in small groups. Schimmele reports that in recent forums, students expressed satisfaction with the dining updates that have been made (Williams, 2013).

(4) Population tracking. Data on student population assists in formal decision-making. When a university has a diverse international student population, there is a correspondingly wide range of food preferences that must be addressed (Williams, 2013).

(5) Maintaining the right food mix. Every university has a unique culture and mix of nationalities, so the appropriate food mix varies from one institution to another (Williams, 2013).

References

Kaib, J. (2014). Here's why college meal plans suck. The College Fix. Retrieved from http://www.thecollegefix.com/post/16235/

Landes, L. (2014). How a college meal plan wastes money. Consumerism Commentary. Retrieved from http://www.consumerismcommentary.com/how-a-college-meal-plan-wastes-money/

Porter, S. (2010). Meal plan costs surpass cash prices with Pioneer. The Sojourn, Indiana Wesleyan University. Retrieved from http://www.iwusojourn.com/wp-content/uploads/archive/fall2010/Issue%205.pdf

Williams, L. (2013). Location, variety take priority in meal planning. University Business. Retrieved from