Forcing NJ Universities to Come Clean on All their Hidden Fees

Carly Sitrin | September 13, 2018 | Education
The cost of tuition at colleges and universities in the state is one thing. But many students are blindsided by extra ‘hidden’ fees and legislators are pushing for transparency

Credit: Creative Commons
College costs can be formidable, and families often get sticker shock when they realize they haven’t accounted for the many fees a school can apply. With technology, labs, books, parking, health insurance and other fees, the price of extras can reach as high as an additional $3,000.

In order to ensure that all costs of a New Jersey college education are clear from the outset, state legislators have submitted a bill (A-3625/S-2046) that would require institutions of higher education to break down their costs, including those hidden mandatory fees that get tacked on when tuition payments are due. A hearing on the bill is scheduled in Trenton for today.

“Too many of our graduates are suffering from sticker shock,” said state Sen. Shirley Turner (D-Mercer), who introduced a version of the bill back in 2016 and whose updated version passed the Senate unanimously. “Too often colleges do the bait and switch. They talk about what the tuition is, and students and families base their budgets on that — and, lo and behold, they are hit with a huge number of fees. If schools are going to charge fees, they should be upfront about it.”

The bill would require schools to develop a standard policy for documenting mandatory student fees for things like technology, gym and fitness, health insurance, campus facilities, and so on. Schools would have to establish separate funds in their budgets for each individual mandatory student fee and make information about those fees easily accessible to every student applying via a financial aid “shopping sheet.” The sheet would provide prospective students and their families with a breakdown of costs, loan options, and estimated debt that the student would incur if they chose a particular university.

The bill is in response to a revealing 2016 report by the state comptroller which audited three schools — The College of New Jersey, Kean University, and William Paterson University — for their allocation of student fees.

Mandatory fees were routinely obscured

The report found that, at these three institutions, mandatory fees were routinely obscured outside of the advertised tuition cost — even though the auditing team found that those fees account for approximately one-third of student bills. In fact, the report states that in fiscal year 2013, mandatory fees at those three schools pulled in more than $115 million combined.

“There are a tremendous amount of hidden costs,” Assemblywoman Pamela Lampitt (D-Camden) said, adding that some are revealed only after a convoluted web search across university pages and departments. “We want full disclosure for the students in New Jersey.”

Credit: WBGO
Sen. Shirley Turner (D-Mercer)
Both Lampitt and Turner said there is consensus among legislators that something must be done about these fees. Recent reports show the typical New Jersey college graduate racks up more than $28,000 in student loans and many claim that the New Jersey Higher Education Student Assistance Authority has done more to harm than help.

“It’s not in anybody’s interest for us to deceive our students and their families as to what the true cost of education is,” Turner said. “We have found that for students who are burdened with debt it really puts a damper on their financial futures. That’s something that they pay for dearly … it also plays into the ‘brain drain,’ where many students leave New Jersey to find education at better costs.”

Turner said when she first proposed the bill in 2016, it got a lot of pushback from colleges. She said schools are looking to fill enrollment quotas and when applicants see tuition continuing to increase at a high rate, it becomes harder for them to recruit new students and balance their budgets.

Reduction in state aid a factor in higher fees

“In all fairness, the state of New Jersey has not provided the same amount of aid as they have in the past,” Turner said. “The only place schools can go to get that revenue is charging tuition. But of course they don’t want to be the highest in tuition charges,” which is where those fees come in.

Indeed, a major use for those student fees is toward payment of the debt service on bonds for facilities and capital projects to keep up with enrollment increases.

Some universities have changed their policies in the wake of the 2016 comptroller’s report. For example, Kean University approved a new fee structure to reduce the overall number of fees from nine to four, rolling any eliminated fees into the tuition cost. TCNJ also no longer charges separate mandatory fees that partially fund expenses for the operating costs of health services, athletics, intramurals, campus wellness, fitness services, and computing access.

According to Luke Sacks, the head media relations officer at TCNJ, those costs are now fully incorporated into the tuition rate and “are clearly listed on the student’s account website.”

Michael Klein, the interim executive director of the William J. Hughes Center for Public Policy at Stockton University, who worked on an early draft of the bill in 2016, said that overall, New Jersey colleges are working to maintain affordable tuition costs while dealing with increasing enrollment and demands for more, higher-tech buildings.

Schools rely on the fees they charge students

He noted, like Sen. Turner, that because the state has cut appropriations for higher education since 2008 — it’s only one of nine states in the country to do so — the schools rely on the fees to keep them running and to keep tuition costs manageable. In 2017, the state appropriated almost $2,000 less per student than it did in 2001, and $1,000 less than before the Great Recession. New Jersey’s Secretary of Higher Education Zakiya Smith Ellis said that her office intends to examine how much the state supports postsecondary education.

Smith Ellis said schools should be upfront with students and their families about all the costs. “There are lots of reasons why tuition and fees can fluctuate but that doesn’t mean we shouldn’t be transparent with students,” she said. “We made the decision that students are on the hook for this money regardless of the reason, so we should be clear with them what the costs are.”

Student Loan Shopping Sheet: Click to expand/collapse
Klein raised concerns about the bill’s proposed financial aid “shopping sheet” which would be drafted by the state’s higher education department following the template of an established federal model which lays out the estimated total cost of attendance at various universities across the county. He said using state-specific language for such a document could make things more confusing for students and parents when they try to compare costs at institutions across state lines.

Smith Ellis, however, said as someone who helped write the federal template, she sees many opportunities for New Jersey to improve upon it, including design changes that would make it easier to read.

The Secretary noted that she is not taking a position for or against the bill, but she is “very excited about the concept of making college costs more transparent through a shopping sheet.”

Turner, meanwhile, said there is still much to be done to improve cost transparency not least because if students continue to incur massive amounts of debt, the state economy will suffer. She said legislators of both parties are eager to support the bill and that she’s optimistic Gov. Phil Murphy will sign it.

“I was like the Amen Corner when I testified in front of the Senate higher education committee,” Turner said. “So many members had experienced the same thing when paying for their children’s education. The time has certainly come and it should have come a lot sooner.”

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