Fewer Students Opt Out of UC Fee

The percentage of students opting out of the newly increased student activities fee fell from 16.9 percent last year to 15.9 percent this academic year, increasing the Undergraduate Council’s budget by more than $100,000.

Mary Jo Keaney, a supervisor at the Student Receivables Office (SRO), said that last year 6,659 undergraduates were billed and 1,129 opted out of the $35 fee, while so far this year, 1,046 out of 6,566 students have chosen not to pay the higher $60 fee.

“There is no remarkable difference in the number of students waiving the [council] fee from last year to this year,” Keaney said.

Because of the small change in students opting out of the charge, the $25 fee increase will result in a council budget of $331,200 this year, as opposed to a $193,550 budget last year.

Last May, the council passed a bill to increase the fee from $35 to $60 during the 2004-2005 year and then to $75 the next year after a student body referendum and approval from the Faculty Council. Thirty-five percent of students voted in the referendum. Of those undergraduates, 53.2 percent supported the proposed fee hike that would provide more money for student groups and campus social events.

“I think that students are trusting the UC to step it up this year and I’m confident that we’ll be able to do just that,” Council President Matthew W. Mahan ’05 wrote in an e-mail. “If we weren’t doing our job I think that the opt-out rate would have been double what it was.”

But former council representative Joshua A. Barro ’05 attributed the low opt-out rate to confusion over the electronic termbill. On the paper termbill, the default option was to pay the fee and on the new electronic version—first issued this summer—there was no place to opt out of paying the fee.

“The electronic termbill had no option to opt out and didn’t even tell you that you could opt out,” said Barro, who was a primary opponent of the fee increase and resigned from the council immediately after the referendum. “Students shouldn’t have to jump through hoops to opt out of [the fee].”

Harvard Professor of Economics David I. Laibson ’88, who has done extensive research on the effects of default options on human behavior, said that recent studies of 401(k) retirement plans have found that about 90 percent of employees invest money in the plan when it is the default option, while only 30 percent enroll when it requires an active choice.

“One effect is that the default has an implicit message that this is the recommended option,” Laibson said. “The other effect is that it is harder to unravel the default than to simply accept it.”

Laibson said that this effect combined with the fact that oftentimes only a student’s parents see the termbill could lead to a low opt-out rate.

The increase in the council’s budget has also raised some concerns about the organization’s ability to manage the new money. Council Secretary Jason L. Lurie ’05 pointed to the council’s bounced checks last spring as evidence that the organization needs better fiscal management.

According to council bank statements that Lurie allowed The Crimson to read, the council bounced 95 checks in the late spring and in the early summer, resulting in $1,873 in overdraft fees. The checks bounced due to delays in the transfer of funds from Harvard to the council’s bank account, a pile-up of grant requests at the end of the spring and poor monitoring of the council’s available funds.

But Council Vice President Michael R. Blickstead ’05 said he is confident that the council will be able to handle the increased budget.

“I am personally going to write strict financial guidelines for the treasurer. I am also going to propose adding assistant treasurers to aid in record-keeping, and I am going to work with the University to see if we can expedite the process of getting money into our bank account,” Blickstead said.

Keaney and several council officers said they were uncertain of how late students can choose to opt out of the fee.

“July through September is when people can normally waive the fee,” Keaney said. “If somebody were to request it retroactively, I am sure we would do it, but I don’t recall offhand if it has happened.”

—Staff writer Evan M. Vittor can be reached at evittor@fas.harvard.edu.