Saga, continued: skipped meals lower tuition
Block plans still make you pay more for added flexibility, but the equation changes soon
Joy Pavelski
Issue date: 9/11/08 Section: News
For students looking at their semester bill, it seems you buy more meals for less money with a traditional meal plan. But that analysis misses hidden costs and trends that ultimately influenced meal provider Saga, Inc.'s prices for block plans.
Last week, The Collegian reported the cost of the new plans as nearly one and one half times the cost of a regular plan. True? That depends on two things: whether students actually eat all the meals they purchase and how food prices fit within the overall Hillsdale College budget.
At the end of the day, the 179 students who chose a block meal plan this semester still purchased fewer possible meals for a higher price. But because most students don't eat all the meals they buy, the hypothetical price difference between block and non-block plans might disappear once students walk into the dining hall.
Calculating flexibility
Saga, Inc., General Manager Kevin Kirwan finally stopped spinning around Knorr Family Dining Hall - he's worked 60-hour weeks since school began - long enough to explain some 'Saganomics' to The Collegian.
When deciding block plan prices this year, Saga examined how students actually eat meals, rather than how they project they will eat meals when purchasing a plan. Students on the 19-meal plan usually only eat 13 to 14 meals per week, Kirwan said. Students with a 15-meal plan typically eat 11 to 12 meals per week, and for students with a 10-meal plan it's nine.
So students who think they pay $6.75 for one meal from 19 per week actually only pay that if they eat every single meal Saga offers. Any meals you skip increase the cost of meals you do eat. Given that scenario, block meal plans actually compare in price to regular meal plans.
"We were trying to give students the flexibility they wanted with the amount of meals they already used," Kirwan said. "In order to make this fair, the plan has to be equal."
Food costs have jumped substantially for the college since moving into the Grewcock Student Union and its Knorr Family Dining Hall, Chief Administrative Officer Ken Cole said Tuesday. That is because students eat more in Grewcock than in the old dining hall, and because freshman class sizes keep increasing.
Saga negotiates a contract with the college each spring, and loses money if actual costs exceed projected costs. This happened last year, Cole said. Neither institution wants that repeated.
Meals feed tuition
A savvy student might now decide never to skip a meal again. After all, you paid for it, and might as well eat it. This, however, may not actually be the wisest strategy.
Saga makes much of its profit on meals students buy but don't eat, Cole said. So when students actually eat all their meals, Saga must raise prices or lose money. If students narrow Saga's profit margin this way - or by purchasing a block meal plan, which acts similarly - Saga must eventually raise prices beyond its past pattern of raising at roughly the average of the Consumer Price Index.
This is already happening. Room and board is going up at least 8 percent next year because of increased student union costs, Cole said.
"The more [meal cost] we absorb," Cole said, "the higher tuition would be."
The largest student employer on campus with 150 student workers, Saga and Hillsdale work closely, and have for years.
"For the next couple years, I would not entertain an outside bid [for food service] because we need to see how Grewcock works out," Cole said. He said this is because Saga provides quality for a good cost, has a first-class catering program and helped develop the student union.
So, in one way, those meals you don't eat mean lower future tuition. But since that's only true if everyone continues skipping meals, perhaps your best strategy is to eat more meals now and complain less when you get a steeper school bill next year.
Only a test
Members of the college administration told Student Federation's meal plan committee they would try something new with meal plans for a year, then re-evaluate, said junior Amy Grace Goodrich, who chaired the meal plan committee. After all the number juggling, it's easy to see why try and amend is better than do or die.
"Changing meal plans is a big deal, especially at a small school where meal plans have been the same for so long," Goodrich said. "So we're happy with the progress and will continue to work on the plans."
Mostly happy about required meal plans:
Why can't Hillsdale students choose not to buy a meal plan? Because to make any meal plan cost effective, hundreds of students must participate. "One hundred students couldn't pay enough to cover the costs of meal services," Chief Administrative Officer Ken Cole said.
How happy are we about that? From 256 students surveyed by the Student Activities Board in Feb. 2008:
Knorr Family Dining Room is: Inefficient - 20%
Satisfactory - 53%
Efficient - 27%
Quality of food is:
Unsatisfactory - 20% Satisfactory - 59%
Very Good - 21%
Last week, The Collegian reported the cost of the new plans as nearly one and one half times the cost of a regular plan. True? That depends on two things: whether students actually eat all the meals they purchase and how food prices fit within the overall Hillsdale College budget.
At the end of the day, the 179 students who chose a block meal plan this semester still purchased fewer possible meals for a higher price. But because most students don't eat all the meals they buy, the hypothetical price difference between block and non-block plans might disappear once students walk into the dining hall.
Calculating flexibility
Saga, Inc., General Manager Kevin Kirwan finally stopped spinning around Knorr Family Dining Hall - he's worked 60-hour weeks since school began - long enough to explain some 'Saganomics' to The Collegian.
When deciding block plan prices this year, Saga examined how students actually eat meals, rather than how they project they will eat meals when purchasing a plan. Students on the 19-meal plan usually only eat 13 to 14 meals per week, Kirwan said. Students with a 15-meal plan typically eat 11 to 12 meals per week, and for students with a 10-meal plan it's nine.
So students who think they pay $6.75 for one meal from 19 per week actually only pay that if they eat every single meal Saga offers. Any meals you skip increase the cost of meals you do eat. Given that scenario, block meal plans actually compare in price to regular meal plans.
"We were trying to give students the flexibility they wanted with the amount of meals they already used," Kirwan said. "In order to make this fair, the plan has to be equal."
Food costs have jumped substantially for the college since moving into the Grewcock Student Union and its Knorr Family Dining Hall, Chief Administrative Officer Ken Cole said Tuesday. That is because students eat more in Grewcock than in the old dining hall, and because freshman class sizes keep increasing.
Saga negotiates a contract with the college each spring, and loses money if actual costs exceed projected costs. This happened last year, Cole said. Neither institution wants that repeated.
Meals feed tuition
A savvy student might now decide never to skip a meal again. After all, you paid for it, and might as well eat it. This, however, may not actually be the wisest strategy.
Saga makes much of its profit on meals students buy but don't eat, Cole said. So when students actually eat all their meals, Saga must raise prices or lose money. If students narrow Saga's profit margin this way - or by purchasing a block meal plan, which acts similarly - Saga must eventually raise prices beyond its past pattern of raising at roughly the average of the Consumer Price Index.
This is already happening. Room and board is going up at least 8 percent next year because of increased student union costs, Cole said.
"The more [meal cost] we absorb," Cole said, "the higher tuition would be."
The largest student employer on campus with 150 student workers, Saga and Hillsdale work closely, and have for years.
"For the next couple years, I would not entertain an outside bid [for food service] because we need to see how Grewcock works out," Cole said. He said this is because Saga provides quality for a good cost, has a first-class catering program and helped develop the student union.
So, in one way, those meals you don't eat mean lower future tuition. But since that's only true if everyone continues skipping meals, perhaps your best strategy is to eat more meals now and complain less when you get a steeper school bill next year.
Only a test
Members of the college administration told Student Federation's meal plan committee they would try something new with meal plans for a year, then re-evaluate, said junior Amy Grace Goodrich, who chaired the meal plan committee. After all the number juggling, it's easy to see why try and amend is better than do or die.
"Changing meal plans is a big deal, especially at a small school where meal plans have been the same for so long," Goodrich said. "So we're happy with the progress and will continue to work on the plans."
Mostly happy about required meal plans:
Why can't Hillsdale students choose not to buy a meal plan? Because to make any meal plan cost effective, hundreds of students must participate. "One hundred students couldn't pay enough to cover the costs of meal services," Chief Administrative Officer Ken Cole said.
How happy are we about that? From 256 students surveyed by the Student Activities Board in Feb. 2008:
Knorr Family Dining Room is: Inefficient - 20%
Satisfactory - 53%
Efficient - 27%
Quality of food is:
Unsatisfactory - 20% Satisfactory - 59%
Very Good - 21%
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