Shining the light on campus dining cards

A visit to the dining hall is a daily part of thecollege experience for most freshmen. Parents buy a meal plan at the start ofeach term with the idea that it’s a down payment on food for their eager youngscholar. But what new students and their parents may not realize is that muchof that money often goes unspent – and in many cases, there are no refunds.

In cooperation with student journalists in several states,the SPLC used public records to sample the dining card practices at majoruniversities. The purpose of the unscientific sampling — done as a part ofSunshine Week 2012 — was to call attention to the growing practice of“cashless” campus transactions and the issues raised when students are requiredto prepay for goods or services they may not use.

Our findings revealed students forfeit many thousands ofdollars every year in unused meal and debit dollars – though what the schooldoes with that money varies widely by location.

At the University of Nevada-Reno, for example, students leftmore than $47,000 in campus dining value unspent in 2009 alone. At WashingtonState University, students left $43,000 unspent during the 2009-2010 schoolyear – at rival University of Washington, students forfeited more than $90,000during the same time period.

Exactly what happens to that unused money varies from schoolto school. Under UW policy, all unused dining dollars are forfeited at the endof the academic year and become property of the university. WSU allows funds tocarry over to the following fall semester, so long as the student remains inthe residence hall system. Neither school offers refunds.

Rutgers University allows students to receive refunds ofunused balances in excess of $25, for as long as 18 months since the last useof the card. At the University of Wisconsin, students automatically receive arefund for unused dining dollars over $20. Balances under $20 are transferredto another account on the student card – which operates similar to a debitcard.

In fact, many schools have multiple accounts linked to asingle student ID card. Most have dining accounts linked to prepaid meal plans,in addition to a debit account of money that can be used at other locations oncampus. Some of the schools, including WSU and Georgia Tech, have agreementswith off-campus vendors to accept these “student bucks” as well.

From the records obtained by the SPLC, unspent money onthese “debit” accounts seemed far more likely to be refundable or transferredinto holding accounts as unclaimed property.

At both Washington schools, for example, unspent cash isheld for two years during which students can request refunds. UW closesaccounts after a student stops enrolling for five quarters, holds the money fortwo years, then turns it over the state as unclaimed property. Similarly, WSUwaits for accounts to be inactive for 12 months, then places any unused fundsin escrow for another year. However, at the end of that two-year period, WSUautomatically processes the balance as a donation to the university foundationin the student’s name.

Records show the WSU Foundation received more than $48,000in unused card “donations” between 2009 and 2011.

Lowell Adkins, executive director of the NationalAssociation of Campus Card Users – which represents administrators who overseecard programs – confirmed that refund policies are all over the map.

“Some schools ask the student to request it, some schoolsrefund it all,” he said.

Adkins said he thinks most colleges do offer refunds forunused dollars over a certain threshold, like $20 or $25.

That was true of debit accounts reviewed in the SPLC audit,but not of meal plans.

None of the schools covered by the requests used outsidecontractors to manage their card or dining account systems, though some didcharge outside vendors a fee for the right to accept student account money aspayment.

Several did purchase proprietary software to help managetheir card accounts – the two most common among the schools we surveyed wereBlackboard Transact and CBORD Odyssey.

Mississippi State also contracted with Blackboard to recruitand manage off-campus vendors who accept its MoneyMate debit account. Theprogram, called BbOne, costs the university a $5,000 per year flat fee.Blackboard, for its part, charges merchants a fee to participate in theprogram, then sends a percentage of that money back to the university.

More schools are entering into contracts with banks andother financial institutions as part of their card programs. Some offer creditcard features and bank debit accounts by “co-branding” student cards. Adkinspredicts the trend will only grow in the coming years, and may put more moneyin the hands of both universities and banks.

“Clearly the banks are going to have an opportunity to see arevenue stream out of that, ultimately,” he said. “But banks, in order to havethat opportunity, usually provide some incentives to the school.”

That can include help marketing the cards, assisting withthe distribution of financial aid, even having employees in the university cardoffice, Adkins said.

Student journalists at the University of NorthCarolina-Chapel Hill conducted their own investigation and found that 25percent of all meals purchased through dining plans went wasted each semester.In fact, a school official suggested to the Daily Tar Heel that theuniversity actually budgets around the idea that meals will go unused.

Scott Myers, UNC’s director of dining and vending, told the TarHeel that if students were to eat every meal they purchased, priceswould go up.

State law regulates how a business is supposed to treat aconsumer’s unclaimed money, such as cash left in a safe-deposit box in a bankor stocks left in an account with a stockbroker (for example, if the ownermoves away and leaves no contact information, or dies). If a rightful ownercannot be found, then the money must be turned over to the state to be held inan “unclaimed property fund” in case the owner turns up. (The legal term forthis process is “escheat.”)

The money that a customer prepays for a product or a servicecan also (depending on state law) be treated as unclaimed property. So, undersome state laws, the money left over on a stored-value card such as a meal-plancard may have to be escheated to the state.

For example, New Jersey in 2010 passed a very broadunclaimed property law that applies to all types of stored-value cards. The lawsays that, after a card has had no activity for two years, it is assumed to beabandoned and – along with the last known address of the buyer – the remainingcash value must be transferred to the state Department of the Treasury.

There are no known court cases testing whether a college isviolating state unclaimed-property laws by keeping the money left on studentmeal cards instead of turning it over to the state.

The SPLC and its partner student journalists sent recordsrequests to 13 schools in mid-February. Twelve ultimately produced records.

The requests sought contracts and financial recordsassociated with “stored value cards” issued to students, including the amountof unspent money for the past two fiscal years.

Of the 11 requests sent by SPLC staff, two were deniedoutright, with the universities claiming no such records existed. In bothcases, a follow-up request was sent clarifying that “stored value cards” includesany prepaid card issued by the university. Both schools responded that they hadthe records.

Washington State, for example, first responded that “WSUdoes not issue any type of card on which value is stored. We offer stored valueplans. The distinction is subtle but clear.”

Obtaining records from Texas A&M proved particularlychallenging. The school initially responded Feb. 23 that, “TAMU does notprovide or contract with anyone to provide a stored value system to TexasA&M University students.” When an SPLC reporter sent a clarified request,the university responded by saying it was seeking an opinion from the stateattorney general’s office. It’s a process under Texas public records law whichallows a government agency to get the AG’s opinion on whether certain recordscan be withheld. The process also puts the agency’s obligation to fill arequest on hold while the attorney general drafts an opinion.

Five days later, TAMU announced it was withdrawing itsrequest for an opinion and providing the records. The response consisted ofPDFs of a campus dining brochure, pages from the university catalog and twospreadsheets of data. The spreadsheets listed dollars amounts by account codeand were largely indecipherable.

Three of the universities asked for clarification about therecords requests, then promptly provided the records. Most schools responded tothe mid-February requests by the end of that month or early March. TheUniversity of Rhode Island took the longest time, requesting an additional 30days provided by the state public records law, and providing the records onApril 3. The University of Nevada–Las Vegas responded April 2.

Only three of the universities charged fees for the records.Mississippi State charged $48.30 for labor and copying. Georgia Tech Universitycharged $105.06 to produce a three-page document with the total amounts ofunused dining dollars.

The University of Massachusetts at Amherst charged by farthe highest fee. It provided general policy information and the terms andconditions for its campus UCard at no cost, but estimated it would cost $327.56to provide the records containing the unused card balances. Alternatively,UMass offered to provide “general ledger” documentation for $141.05. The SPLCopted not to pay for the documents, given that the university automaticallyprovides refunds for unused card dollars over $10.

The schools that were part of this project included: theGeorgia Institute of Technology, Georgia Southern University, Mississippi StateUniversity, Rutgers University, Texas A&M University, University ofMassachusetts–Amherst, University of Missouri, University of Nevada–Las Vegas,University of Nevada–Reno, University of Rhode Island, University ofWashington, University of Wisconsin–Madison, and Washington State University.

Contributors to this report include Brian Schraum, NickGlunt, Emily Summars and Frank LoMonte of the SPLC staff, and studentjournalists Samantha Sunne (Missouri), Pam Selman (Wisconsin) and AndrewAverill (Wisconsin).