Following her first day of class last week at the University of Missouri, Baylee Oldham strode back to her dorm, a recently renovated double room featuring two loft beds. Oldham, an MU freshman, will pay $5,750 for the academic year to live in Gillett Hall on the Columbia campus.
MU students today experience a much bigger financial burden for college education than students did a decade ago, as access to financial aid mismatches the growing cost of housing. The MU campus housing department generates revenue from student rent, which rose dramatically in the past decade. The increasing cost of attending college and the state of financial aid for college students has added financial pressure for families.
Department budget leads to less affordable campus housing
The annual rate of an average double room like Oldham’s has almost doubled from about $3,000 in 2004, according to an analysis based on a dataset supplied by the MU Department of Residential Life.
Although MU’s campus housing price is comparable to other public universities in the Midwest, the department’s newest budget indicates the rising rate comes from skyrocketing costs.
The department’s fiscal year 2014 budget anticipates $40.4 million worth of revenue from contracts between July 1, 2013 and June 30, 2014, or more than twice the $19,451,828 brought in from contracts in fiscal year 2005. The department relies mostly on room contracts with students for revenue.
Frankie Minor, MU’s director of Residential Life, said the primary source for the price increase was the cost of renovations and new construction of residence halls. He said operating costs such as utilities, furniture and employee benefits have also gone up over time.
The department’s budgets showed that projected utilities expenses increased from $2.3 million to $5.3 million in the past 10 years’ budgets. The total amount of salaries, wages and benefits for the department’s employees rose 69 percent, from $7.2 million to $12.2 million, over the same period of time.
Minor said the increase of salaries and benefits was due partly to growth in the number of staff members as the department built new residence halls, and to the significant rise of health insurance costs.
Financial aid lags growth of expenses
It’s not just housing costs climbing for MU students. The budgeted costs for full-time undergraduate Missouri residents attending MU increased from $15,153 in the 2003 academic year to $23,501 in 2012. As costs have climbed over the last decade, the number of undergraduate students to apply for financial aid has soared.
More MU undergraduates with high family income are applying for financial aid due to rising college expenses. The number of MU undergraduates with family income of more than $100,000 who filed the Free Application for Federal Student Aid, or FASFA, tripled between the 2003 and 2012 academic years, according to the University of Missouri System Undergraduate Financial Aid Summary Reports.
The report suggested there are more students from higher-income families that have financial need, according to LaShonda Carter-Boone, senior research analyst at MU Institutional Research and Planning. She said students from higher-income families who did not have a financial need in the past might have it now due to rises in budgeted attendance cost.
The need for student aid is surging, but a family’s ability to pay for college has shrunk, said MU professor Stephen Ferris, director of the Financial Research Institute. While the recent financial crisis wore down the value of assets invested to cover college expenses, the increasing costs of university education created a greater demand for financial support, Ferris said.
For some students and parents, financial aid is not a reasonable choice.
Jeni Kren supports her twin daughters, who are seniors at MU and have not applied for any financial aid. They live at Pear Tree Village, an apartment complex south of the Columbia campus, and their rent there is more affordable than it would be in residence halls.
Kren said her daughters did not apply for financial aid because their family income would exclude them from anything but loans.
“We probably would not qualify,” she said, “but it is a strain with out-of-state tuition.”
Kren’s biggest concern is that her daughters don’t have any debt at graduation, at least not as undergraduates.