Opinion: Non-essential fee opt-out would spell disaster for student societies

Student fees constitute substantial portion of most student groups’ operating budgets

Opinion: Non-essential fee opt-out would spell disaster for student societies

Alongside proposed changes to the Ontario Student Assistance Program and tuition fees, the Ford government has announced the Student Choice Initiative (SCI), which would allow students to opt out of fees outside of “essential campus health and safety initiatives.” With these changes, student societies across U of T could face significant declines in revenue that would hinder their ability to continue their basic operations.

While the kinds of services to be designated non-essential will be determined by universities, we can still speculate as to which services could face significant decreases in revenue, should students opt out of paying their fees.

University-operated services are almost certain to be marked essential. Kinesiology & Physical Education is responsible for the gyms and playing fields on campus, as well as a variety of sport programs. Hart House operates its titular facility, from which a number of student organizations operate. UTM and UTSC students pay dramatically reduced fees for these two programs, but also pay for athletic fees on their campuses. Student Services provides Accessibility Services, Health Services, Career Services, and a wide variety of other similar services.

Last year, the aforementioned services levied about $840, just over half of an average Arts & Science student’s levy. It’s hard to imagine the university designating any of these services as non-essential, as they are critical for maintaining campus facilities and providing basic services to students. Furthermore, and on a more cynical note, the university will be experiencing a revenue shortfall with the proposed 10 per cent tuition cuts for certain domestic students, so why would it give students the opportunity to opt out of additional sources of revenue?

As the largest student-run political bodies on campus, student unions seem likely to fall under the category of “organizations [students may] not support” targeted by the SCI. The University of Toronto Students’ Union (UTSU) and other campus unions make up the bulk of the remaining fees for Arts & Science students. Through these unions, students pay about $330 for health and dental benefits, out of which they can already opt out.

Assuming that these are classified as non-essential, the UTSU and the University of Toronto Mississauga Students’ Union’s fees currently represent 94 per cent of a UTM student’s non-essential fees, while the Scarborough Campus Students’ Union fees represent 91 per cent of a UTSC student’s non-essential fees. The percentage that the UTSU’s levy comprises of a UTSG student’s non-essential fees varies according to their college, and ranges between 17 to 63 per cent.

Fees for college student societies — which include college-specific student unions — vary dramatically, with Trinity College and Victoria College collecting yearly fees over $400 per student while other colleges average about $70. Colleges’ unique student societies would also likely be categorized as non-essential by the provincial government.

So what does a large-scale opt-out look like? Since the SCI has no real precedent, it’s hard to estimate how many students would actually choose to opt out of fees, or which organizations they would choose to continue financially supporting. While students can already refund levies to some organizations, the majority do not opt out — whether they are unaware of the option, or feel that it is too much of a hassle to do so.

With the SCI, there is certainly some incentive to opt out — the average Arts & Science student at UTSG could save $450 should they opt out of all fees that might presumably be deemed non-essential, out of $1,500 in total incidental fees. If most students opt out, then student unions and societies would be forced to come up with new revenue sources and slash services.

Let’s use the UTSU as an example in a worst-case scenario and make some predictions using its 2017–2018 actuals about a revised budget. In 2017–2018, student fees — including optional Health and Dental fees — represented $17.9 million, or around 95.3 per cent, of the UTSU’s overall revenue.

What kind of measures would need to be taken if it all disappeared? In 2017–2018, the union had a net income of around $409,000, but had its levy been opt-out, it could have had a net loss of $1.4 million instead. What’s more, if UTM students vote for the UTMSU to separate from the UTSU, an additional source of revenue would be lost.

While it is unlikely that all students currently paying the UTSU’s levy would actually opt out of paying were the option available, one would expect the UTSU — and other student societies — to take preemptive action to guard against potentially significant decreases to revenue if their services are deemed non-essential by U of T.

The UTSU could stop funding clubs entirely, which, in 2017–2018, would have saved it approximately $241,000. Removing all financial assistance programs saves another $101,000. Payroll cuts, decreases in advocacy and government work, and debt could potentially bridge the remainder, assuming the UTSU can maintain its current revenue sources. Even with all these drastic — and improbable — measures, the union would still struggle to break even on potential losses.

All of this is not to mention the capital costs involved in the Student Commons project. Continuous delays mean the union have been unable to charge an operating levy, which would have generated approximately $250,000 in revenue in 2018–2019. Based on these projections, had the Student Commons opened last September, the UTSU estimates that it would have yielded a net income of around -$47,000. Without student fees, this would have been around -$778,000. Although this is a worst case scenario, students opting out of the Student Commons make it increasingly likely that the union could have to default on the project, meaning that the U of T administration would seize control of the building.

The UTSU, with its operating surplus last academic year and alternative sources of revenue, is already in a far better position than most smaller student societies, but even then, an opt-out option would lead to significant financial struggle. Without incidental fees, most student societies will have difficulty carrying out their basic functions, and it is not difficult to envision many of them ceasing to operate altogether.

U of T can already feel lonely and isolating — if the student societies that bring us together fall apart thanks to the SCI, we will all feel even less connected.

How non-essential fees at U of T work — and how they could change next year

Provincial government’s new Student Choice Initiative may make some of U of T’s ancillary, incidental fees opt-out

How non-essential fees at U of T work —  and how they could change next year

Among the sweeping changes to postsecondary education fees that the provincial government rolled out last Thursday is the Student Choice Initiative (SCI), which may enable students to opt out of “non-essential non-tuition fees.”

According to Ontario Minister of Training, Colleges and Universities Merrilee Fullerton, “These fees often get allocated to services students do not use or to support organizations they do not support.” Fullerton added that the new initiative will bring “predictability and transparency” to non-tuition fees.

The provincial government has defined essential non-tuition fees to include “walksafe programs, health and counselling, athletics and recreation and academic support.” Parliamentary Assistant to the Minister of Training, Colleges and Universities David Piccini told The Varsity that universities and colleges will determine which non-academic fees are essential “at their discretion.” U of T’s statement did not mention how this determination would be made. The government’s seemingly lax approach to regulating the initiative may mean that U of T could decide to make no changes to how ancillary or incidental fees currently work.

There are two main forms of mandatory non-tuition fees at U of T — ancillary fees and incidental fees. Ancillary fees are governed by the 1995 Policy on Ancillary Fees, while incidental fees are governed by the 2003 Policy for Compulsory Non-Academic Incidental Fees.

In 2018–2019, the university is estimated to have received $210.8 million in ancillary and incidental fees. This equates to approximately 7.9 per cent of the university’s operating revenue. At the end of the 2017–2018 academic year, it projected that it would receive $217 million in 2019–2020 and $223.3 million in 2020–2021.

Ancillary fees

At U of T, ancillary fees are fees charged to pay for services, materials and activities not supported by operating grants, capital grants or tuition fees. These include fees for capital projects, course equipment, course field trips, library fines, non-credit course fees, and, for international students, the University Health Insurance Plan. A 2013 report revealed that there were nearly 1,000 unique ancillary fees as of the 2012–2013 academic year, “consistent with most Ontario universities.” Changes to existing ancillary fees are determined by the Vice-President University Operations Scott Mabury. The introduction and removal of ancillary fees must be voted on by the Business Board.

As non-credit courses do not factor into the university’s tuition fees, they will not be subject to the provincially mandated 10 per cent cut to tuition. These non-credit course fees range from $50–15,000.

There are three forms of ancillary fees: compulsory fees, fully refundable deposits, and optional fees.

Compulsory fees refer to course and program required fees. This includes course field trips, lab equipment and manuals, course or program application fees, and access to ACORN. Most course textbooks are not considered compulsory as they can be borrowed through the library system. There is no framework for students to opt out of compulsory ancillary fees.

Fully refundable deposits include access to fobs required to enter certain buildings or classrooms. Students receive their full deposits upon return of the items at the end of the corresponding academic term or program. Optional fees consist of any fines or penalties that students accrue, including late library and deferred exam fees.

Under the Policy on Ancillary Fees, certain ancillary fees — namely required course equipment and field trip fees — are charged on a cost-recovery basis, meaning that the university cannot profit.

Incidental fees

U of T’s incidental fees are a subcategory of ancillary fees. These include athletics, Hart House, Health Service, Student Services Fees and various campus-wide and divisional student societies. Incidental fees are charged to all U of T students except for students enrolled in non-credit courses, students in the Additional Qualification Program of the Ontario Institute for Studies in Education, and Arts & Science students over 65.

Incidental fees require student societies to pass a vote among their constituents. These fees are collected by the university and distributed to the respective societies. The framework for establishing incidental fees was created in 1996 by Governing Council, the University of Toronto Students’ Union, the Graduate Students’ Union, and the Association of Part-time Undergraduate Students.

To illustrate the effect of an opt-out option on all non-essential incidental fees, The Varsity calculated changes to incidental fee revenues, using the latest available 2017–2018 fees.

In 2017–2018, each of the 13,073 full-time undergraduate Arts & Science UTM students would have paid a minimum of $1,373.82 across 13 incidental fees. If the SCI were mandatory, the same student would have paid a minimum $839.06, roughly 61 per cent of the actual minimum. If every student opted out of all possible fees, a mandatory SCI would have seen UTM and its student groups lose approximately $6,990,917.48.

The 12,147 full-time undergraduate Arts & Science UTSC students in 2017–2018 had to pay a minimum of $1,501.34 across 11 incidental fees. Enforcing the SCI would have reduced the minimum to $813.24, or 54 per cent of then-minimum incidental fees. Under the conditions that every student opted-out of all possible fees through the initiative, UTSC and its student groups would have lost approximately $8,358,350.70.

The minimum UTSG students could have paid in incidental fees in 2017–2018 ranges between an estimated $1,088.63 and $1,800.15, depending on college and program. While UTSG colleges and programs have different incidental fees, essential incidental fees are identical across all full-time undergraduate and graduate programs. In 2017–2018, this consisted of $370.58 for KPE Co-Curricular Programs, Services and Facilities, $303.08 per year for Student Life Programs & Services, and $172.76 per year for Hart House — which provides athletics and recreation. As such, all full-time undergraduate and graduate UTSG students could pay a minimum of $846.42 under a mandatory SCI.