In my previous post The Commercialization of American Higher Education – Part II I ran out of time and space to finish the argument proving that campus housing is indeed an auxiliary enterprise.
In 2014, The Washington Post ran an article that reported that “there were 87 colleges across the country that require full-time students to live on campus their first year of college.” Interestingly, The Post did not indicate their source of information. I checked the catalogs of 86 of the 87 institutions. I couldn’t check the catalog of one of the institutions because it closed in 2016 due to low enrollment and lack of funds. It no longer maintains a website. What I discovered about the other 86 institutions was quite informative.
In their catalogs, all 86 of the remaining institutions stated that they required all full-time, first-year students to reside on campus. However, 56 of the institutions indicated that students could petition for an exception to this rule. The 30 institutions that did not indicate any policies for exceptions included two experimental colleges, the five federal-military academies, seven Catholic, male religious-vocational colleges or seminaries, and 16 Orthodox Jewish rabbinical yeshivas or seminaries. Students at the military academies are considered members of the armed services and are on-call 24/7/365 in case of an emergency. Their training must take that into account. Catholic religious-vocational institutions duplicate the living conditions that their graduates must undertake in their church service, i.e., a celibate, monastic life. Orthodox Jewish Collegiate Yeshivas and Seminaries are restricted to young, unmarried males, who must dedicate themselves solely to their studies. Older or married Jewish students desiring to be rabbis attend a Kollel. The 56 institutions that permitted petitions for exceptions included one Tribal college, three public colleges, three state-related military academies, and 49 private institutions.
In 2017, U.S. News and World Report published an article with self-reported institutional information that the magazine had gathered for their annual Best College Report. One item in the report was the percentage of full-time, first-year students who reside on campus. In 2017, they listed only 13 colleges which reported 100% of first-year students living in college housing. All but one of these 13 institutions were from The Washington Post list. When I checked the catalog of the one college that wasn’t included by The Post, I discovered that they require married students to live off-campus. Apparently, they either had no first-year married students or they misrepresented their data to the U.S. News and World Report.
The other 12 institutions were divided into two groups of six colleges each. The first group consisted of the five federal military academies and one experimental college which, accordingly to its catalog, did not accept petitions for waiver of the residency requirement. The second group of six colleges consisted of five private institutions and one state-related military academy. All of these six accepted petitions for waiver of the residency requirement, including the state-related military academy. Is it possible that they had no waiver petitions for 2017, or that they didn’t grant any that they did receive? I think “not.” Could the 100% figure be due to round-off error? How likely is that?
As I stated in my previous post, the research is overwhelming. Students who reside on campus tend to do better on average and get a more complete educational experience than students who reside off-campus. Is there any other reason why colleges would want students to reside on campus? Prior to the year 2000, there was a very simple explanation. Many schools could make money on residence halls. This is why campus-housing outsourcing firms lined up at the doors of colleges to offer their services. There was money to be made in campus housing. As Mark Twain said in his 1892 novel The American Claimant, “there’s gold in them thar hills.”
For many years, residence halls were among the easiest and cheapest campus structures to build. The designs were fairly standard and construction was straight forward, not like specialized academic spaces. Once built, major modifications were not as frequent as updates to other campus structures. All of my full-time employment experience in the academy was prior to 2009. During the decades leading up to Y2K, a college with a good credit rating could fund construction costs for residence halls through low-interest bonds.
If you have been reading my posts about the 21st-century crises facing American higher education, you know that I believe, as a whole, it is in a state of turmoil and chaos. However, working on this post has made me realize that the once-solid ground under campus housing has cracked wide open. How deep into the resulting fissure have colleges fallen in the past decade? For the four decades, I was intimately involved in the planning aspects of campus housing and in the oversight of campus housing managers. During that time, if campus housing was handled properly, the institution did not lose money in this area.
This is no longer the case. In my research for this post, I discovered the Annual College Housing Report published by the Magazine College Planning & Management. Paul Abramson was in charge of the collection and analysis of the data for the report. In his 2008 report, he concluded that the “…cost of residence hall construction is rising and rising rapidly.” In the same report, he continued by stating that the median residence hall built in 2008 would cost almost $26M.
In subsequent reports, by 2013, the median cost of a new residence hall had risen to more than $39M. In 2019, it is estimated that the median cost of a residence hall will be close to $56M. Those numbers blow what we were doing in the 20th century and the very early years of the 21st century right out of the water.
The last residence hall construction project which I helped plan was completed in 2006, two years after I left that institution. The planning process began in 2003. This residence was designed to house 192 students. The total cost was $3.1M. Our cost of $16,146 per bed was less than half of the median cost per bed of all new residence halls during the period 2003 to 2006.
According to Abramson’s data, our residence hall should have cost us approximately $11.5M. We built it for $3.1M. How could we build our residence hall for less than one-third of what other colleges were spending? There were two primary reasons.
The first was the fact that our whole institution had come together and adopted a Facilities Philosophy. Three of the main tenets of this philosophy were the following:
Enlightened frugality: [Our] University operates within a world of limited resources. All financial expenditures for the physical plant must support the mission of the institution. This requires that all solutions to physical planning be comprehensive, with nothing considered in isolation. Issues of building placement, traffic, and parking, engineering systems, natural systems, and aesthetics must be woven together to form a tapestry of buildings and spaces that foster a university culture. Buildings can and should be attractive, but not ostentatious. They should be functional, and not pretentious. They should be designed and built to last, but should not look or feel austere. Buildings and outdoor spaces should exhibit grace, dignity and elegant simplicity.
Form follows function: This expression is an architectural maxim that connotes the idea that all spaces, indoor or outdoor, should be designed and constructed with an express purpose in mind. Learning spaces should be designed and built-in terms of the learning that will occur in those spaces. Community spaces should be designed and built with community in mind. This tenet places the priority on the planning and the delineation of intended uses or purposes for given spaces. Planning comes before the design and construction of the space.
Common language: [Our] University should have a common architectural language that should be readily seen throughout the campus. Although there should be common themes, these ideas may be expressed differently in different venues. Each new venue should tie into the existing campus vocabulary, but at the same time should be encouraged to bring in new expressions.
Building off these common tenets kept us on the same track and reduced the possibility of wild deviations in designs across campus.
The second reason we were able to hold construction costs in check was that we had developed solid working relationships with two architectural firms, three construction firms, and numerous vendors who understood us and worked with us.
The story of the 192-bed residence hall exemplifies how the tenets of our facility philosophy and working relationships helped us. This new residence hall intended for juniors and seniors was a deviation in design from our typical residence hall. Instead of central hallways with two- or four-person suites on either side, the interior was based on a new design. The exterior of the facility fit in with all of our other buildings on campus. The new vocabulary introduced was a series of balcony hallways overlooking central lounges. Six-person suites were accessed from the balcony hallways. This design answered the desire of our juniors and seniors for more communal, gathering spaces.
In addition to construction costs, we normally budgeted annual maintenance, housekeeping, and utility (MHU) costs of 10% of total construction costs, or $310,000 in this example. Since this residence hall cost $3.1M, financing it with a 2% bond meant that we could pay off the entire initial cost plus accrued interest in eight years with annual payments of $450,000. We could also pay off half of the entire MHU costs for those eight years. By maintaining an occupancy rate of 95%, in another four years, we paid off the entire MHU for all 12 years. From that point on we were making more than $400,000 annual profit from this building.
Since we normally assumed a life expectancy on residence halls of 20 years before a major renovation was required, this profit accumulated for eight years. At the point we needed a major renovation, we would reset the clock and start the process over again. In my 40+ years in the academy, I only saw two residence halls decommissioned. One was converted to faculty offices and the other was condemned and demolished to make room for a completely new residence hall.
American higher education as a whole is speeding toward more white water ahead. The current is running too fast for anchors to work. Some colleges are “up the creek without a paddle” and heading for the giant waterfall. Other colleges have supercharged engines onboard that can possibly keep them out of harm’s way if the captain applies the engines at the appropriate time and turns the rudder in the correct direction.
It’s happened again. I’ve run out of time and space to finish my discussion of outsourcing, auxiliary enterprises, and the sale of institutional assets. I will continue my discussion of auxiliary enterprises next week in my post, The Commercialization of American Higher Education – Part IV.