Shining the light on campus dining cards

Public records reveal students leave thousands of dollars unspent on their meal plans and campus debit accounts each year. Some schools appear to anticipate unused meals as a revenue-generator.

A visit to the dining hall is a daily part of the college experience for most freshmen. Parents buy a meal plan at the start of each term with the idea that it’s a down payment on food for their eager young scholar. But what new students and their parents may not realize is that much of 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 major universities. The purpose of the unscientific sampling — done as a part of Sunshine Week 2012 — was to call attention to the growing practice of “cashless” campus transactions and the issues raised when students are required to prepay for goods or services they may not use.

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

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

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

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

In fact, many schools have multiple accounts linked to a single 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 on campus. Some of the schools, including WSU and Georgia Tech, have agreements with off-campus vendors to accept these “student bucks” as well.

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

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

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

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

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

Adkins said he thinks most colleges do offer refunds for unused 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 outside contractors to manage their card or dining account systems, though some did charge outside vendors a fee for the right to accept student account money as payment.

Several did purchase proprietary software to help manage their card accounts – the two most common among the schools we surveyed were Blackboard Transact and CBORD Odyssey.

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

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

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

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

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

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

State law regulates how a business is supposed to treat a consumer’s unclaimed money, such as cash left in a safe-deposit box in a bank or stocks left in an account with a stockbroker (for example, if the owner moves away and leaves no contact information, or dies). If a rightful owner cannot be found, then the money must be turned over to the state to be held in an “unclaimed property fund” in case the owner turns up. (The legal term for this process is “escheat.”)

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

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

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

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

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

Of the 11 requests sent by SPLC staff, two were denied outright, with the universities claiming no such records existed. In both cases, a follow-up request was sent clarifying that “stored value cards” includes any prepaid card issued by the university. Both schools responded that they had the records.

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

Obtaining records from Texas A&M proved particularly challenging. The school initially responded Feb. 23 that, “TAMU does not provide or contract with anyone to provide a stored value system to Texas A&M University students.” When an SPLC reporter sent a clarified request, the university responded by saying it was seeking an opinion from the state attorney general’s office. It’s a process under Texas public records law which allows a government agency to get the AG’s opinion on whether certain records can be withheld. The process also puts the agency’s obligation to fill a request on hold while the attorney general drafts an opinion.

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

Three of the universities asked for clarification about the records requests, then promptly provided the records. Most schools responded to the mid-February requests by the end of that month or early March. The University of Rhode Island took the longest time, requesting an additional 30 days provided by the state public records law, and providing the records on April 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 University charged $105.06 to produce a three-page document with the total amounts of unused dining dollars.

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

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

Contributors to this report include Brian Schraum, Nick Glunt, Emily Summars and Frank LoMonte of the SPLC staff, and student journalists Samantha Sunne (Missouri), Pam Selman (Wisconsin) and Andrew Averill (Wisconsin).

reports, Spring 2012