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Action News investigation: Colleges profiting from student meal plans (Part 1)

WTAE investigator Jim Parsons reports

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Action News investigation: Colleges profiting from student meal plans (Part 1)
WTAE investigator Jim Parsons reports
The price of college keeps going up, stretching families’ budgets to the breaking point, but it’s not just tuition running up the bill, it’s meal plans, too.Channel 4 Action News investigator Jim Parsons found how universities are profiting at the expense of students and their parents.At Penn State University, meal plans cost $3,700 to $4,700 a year, depending on a student’s choice.At the University of Pittsburgh, they range from $3,600 to $4,600. Meal plans at Slippery Rock University will run students $2,700 to $3,400.At schools Parsons examined, private vendors get paid in full, whether or not students actually eat the meals they've ordered at the beginning of the semester. The vendors also share their profits with the universities.Like most college campuses in Pennsylvania, students who live in dormitories at Slippery Rock University are required to buy a meal plan -- that's one-third of all students.At Slippery Rock, room and board costs more than tuition.“I definitely wasted money,” said freshman Lindsay Werkheiser.Freshman coeds, like Werkheiser, said they rarely use all the meals they're required to buy.“Do you think you ought to be able to carry over unused meals into the next semester?” Parsons asked her.“Yeah, definitely. Even into the next week would be awesome,because we can't do that either,” answered Werkheiser.At the end of the week, unused meals get forfeited.“Sometimes I make some other food, and then I just end up wasting those, so that's just wasted money right there,” said freshman Kaitlyn Barile.Parsons’ investigation revealed that state-owned universities are profiting from the meals they require students to buy meals that often are wasted. In fact, in their contracts with private food vendors, the schools get a percentage rebate on gross sales, and the vendors are required to pay profit-sharing commissions. In other words, the more meals the universities sell, the more money from students they get to keep.Slippery Rock University President Cheryl Norton said all profit-sharing monies are used to improve the university's dining facilities.“So there is an incentive for the university to sell more meals?” Parsons asked Norton.“We're not in the process of selling meals, we're in the process of providing a meal plan, and it's up to the student,” Norton answered.“Well, then why have a contract that builds in profit-sharing and rebates which gives the university a financial incentive to do this?” Parsons questioned.“Because the more meals are sold, the more we need to make sure that the wear and tear on the facility is taken care of,” Norton replied.Parsons chose Norton for an interview because Slippery Rock has the highest revenue from its food service contractor at $4.5 million since 2008 in rebates, profit-sharing and other revenue incentives.At Indiana University of Pennsylvania, rebates and profit-sharing have put more than $4 million in the bank. Clarion, California and Edinboro universities each took in $1.9 million.“There is no reason why students should be forced to buy into the university-sponsored meal plan for meals they won't want to use. That's just an added cost, forcing parents to pay more, forcing parents to make decisions they don't want to have to make,” said Nathan Benefield, of the Commonwealth Foundation in Harrisburg.While students and their parents are forking over $3,000 a year for meals, the universities are requiring food service vendors to give them freebies. They're getting free meal cards that can be used several times per week, all year long.Indiana University of Pennsylvania gets six free meal cards, while Edinboro receives eight, California University of Pennsylvania gets 17 and Slipper Rock gets 25.Clarion requires its food vendor to give the school 50 free meal cards. One goes to its president, who makes $220,000 a year, another to a vice president earning $182,000.When asked why she needs a free meal card, Norton told Parsons, “Because they want me to get to know those students,” but Norton said she doesn’t use the card.As for the two free meal cards that go to the athletic department at Slippery Rock?“Oftentimes, people see the athletic department as special, different, get the kind of perks that the average student doesn't,” said Norton. “We don't want them to be seen as special, different, elite.”“But they are. They're getting a free meal card. Why is that?” Parsons asked.“But that's two out of the 25 being given,” Norton said.Parsons asked Norton why Slippery Rock doesn't give some of those free meal cards to needy students on campus.“That's a really interesting suggestion. I'll take that under consideration,” said Norton.While Slippery Rock received a lot of attention, Parsons emphasized that every state university in western Pennsylvania does the same thing, and just like Slippery Rock, IUP and Cal U charge more for room and board than they do for tuition.As for Pitt and Penn State, they declined to open their books for Parsons’ reporter.Next: Read Part 2 of Jim's report

The price of college keeps going up, stretching families’ budgets to the breaking point, but it’s not just tuition running up the bill, it’s meal plans, too.

Channel 4 Action News investigator Jim Parsons found how universities are profiting at the expense of students and their parents.

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At Penn State University, meal plans cost $3,700 to $4,700 a year, depending on a student’s choice.

At the University of Pittsburgh, they range from $3,600 to $4,600. Meal plans at Slippery Rock University will run students $2,700 to $3,400.

At schools Parsons examined, private vendors get paid in full, whether or not students actually eat the meals they've ordered at the beginning of the semester. The vendors also share their profits with the universities.

Like most college campuses in Pennsylvania, students who live in dormitories at Slippery Rock University are required to buy a meal plan -- that's one-third of all students.

At Slippery Rock, room and board costs more than tuition.

“I definitely wasted money,” said freshman Lindsay Werkheiser.

Freshman coeds, like Werkheiser, said they rarely use all the meals they're required to buy.

“Do you think you ought to be able to carry over unused meals into the next semester?” Parsons asked her.

“Yeah, definitely. Even into the next week would be awesome,because we can't do that either,” answered Werkheiser.

At the end of the week, unused meals get forfeited.

“Sometimes I make some other food, and then I just end up wasting those, so that's just wasted money right there,” said freshman Kaitlyn Barile.

Parsons’ investigation revealed that state-owned universities are profiting from the meals they require students to buy meals that often are wasted. In fact, in their contracts with private food vendors, the schools get a percentage rebate on gross sales, and the vendors are required to pay profit-sharing commissions. In other words, the more meals the universities sell, the more money from students they get to keep.

Slippery Rock University President Cheryl Norton said all profit-sharing monies are used to improve the university's dining facilities.

“So there is an incentive for the university to sell more meals?” Parsons asked Norton.

“We're not in the process of selling meals, we're in the process of providing a meal plan, and it's up to the student,” Norton answered.

“Well, then why have a contract that builds in profit-sharing and rebates which gives the university a financial incentive to do this?” Parsons questioned.

“Because the more meals are sold, the more we need to make sure that the wear and tear on the facility is taken care of,” Norton replied.

Parsons chose Norton for an interview because Slippery Rock has the highest revenue from its food service contractor at $4.5 million since 2008 in rebates, profit-sharing and other revenue incentives.

At Indiana University of Pennsylvania, rebates and profit-sharing have put more than $4 million in the bank. Clarion, California and Edinboro universities each took in $1.9 million.

“There is no reason why students should be forced to buy into the university-sponsored meal plan for meals they won't want to use. That's just an added cost, forcing parents to pay more, forcing parents to make decisions they don't want to have to make,” said Nathan Benefield, of the Commonwealth Foundation in Harrisburg.

While students and their parents are forking over $3,000 a year for meals, the universities are requiring food service vendors to give them freebies. They're getting free meal cards that can be used several times per week, all year long.

Indiana University of Pennsylvania gets six free meal cards, while Edinboro receives eight, California University of Pennsylvania gets 17 and Slipper Rock gets 25.

Clarion requires its food vendor to give the school 50 free meal cards. One goes to its president, who makes $220,000 a year, another to a vice president earning $182,000.

When asked why she needs a free meal card, Norton told Parsons, “Because they want me to get to know those students,” but Norton said she doesn’t use the card.

As for the two free meal cards that go to the athletic department at Slippery Rock?

“Oftentimes, people see the athletic department as special, different, get the kind of perks that the average student doesn't,” said Norton. “We don't want them to be seen as special, different, elite.”

“But they are. They're getting a free meal card. Why is that?” Parsons asked.

“But that's two out of the 25 being given,” Norton said.

Parsons asked Norton why Slippery Rock doesn't give some of those free meal cards to needy students on campus.

“That's a really interesting suggestion. I'll take that under consideration,” said Norton.

While Slippery Rock received a lot of attention, Parsons emphasized that every state university in western Pennsylvania does the same thing, and just like Slippery Rock, IUP and Cal U charge more for room and board than they do for tuition.

As for Pitt and Penn State, they declined to open their books for Parsons’ reporter.

Next: Read Part 2 of Jim's report