Though there are variations within each category, there are two basic types of student activity fees: mandatory (those that must be paid as a condition of enrollment) and voluntary (not a condition of enrollment, and with a mechanism to either opt out or opt in to paying the fee).
Mandatory
On most campuses, student activities are funded through a mandatory fee. The fees are pooled together in a general fund that is typically allocated to a wide variety of student organizations and activities by a student government, student association, or some other democratically elected student governing body. The campus administration then reviews and signs off on the student government’s recommendations. In some cases, a campus funding board that includes both students and non-students makes the fee allocations.
The majority of student activity systems are mandatory, though there is considerable variation in the amount of the fee and the number of groups funded through it. Some schools have chosen to have a small fee that funds fewer activities or that funds only a small part of student organizations’ budgets. Other schools have created a much larger pool of funding. In some cases, the campus has also chosen to make allocation decisions for the following academic year and then set the per-student fee based on the total of those allocations to ensure that large requests are well planned and that student organizations are not in a position of competing with each other for funds.
Voluntary
From the legal perspective, the most important thing to note about the variety of voluntary fee mechanisms is that by virtue of not being mandatory they remove many of the First Amendment questions surrounding student fees. In a voluntary program, no student is compelled to pay the fee and thus, as a general matter, there is no basis for claims of compelled association or speech. While that is a significant advantage to the voluntary fee systems, it comes at a price. Voluntary fee systems generate less revenue to fund student activities and provide less predictable funding for campus organizations.
In terms of the mechanics, there are a number of ways to institute a voluntary fee. The mechanisms that tend to provide the highest level of funding are refundable and waivable fee systems. In refundable systems, all students initially pay the fee, but then can request a refund for all or part of the fee. In a waivable system, the vast majority of students pay the fee, but there is a mechanism to opt out of funding an individual activity or the student fee as a whole. Because these fee mechanisms presume that most or all students will pay the fee, but also have an opt-out mechanism for those who consciously object, the participation rate will be higher than with other voluntary systems.
Two less common mechanisms for instituting a voluntary fee are a simple donation system and a “pledge system.” In a donation system, rather than assessing a fee per se, campuses provide an institutional mechanism for students to donate to organizations of their choice. Donation systems do not work to fund large-scale or resource-intensive programs for two reasons. First, there is no way to know how many other students will pay the fee, and thus there is no guarantee that the program will raise enough money to be viable. This uncertainty discourages students from making a donation. Indeed, donating to a program under these circumstances might be irrational, knowing that the donation would go into a pool of money that would likely never become big enough to fund the program in question. Second, regardless of the size of the program to be funded, donation systems suffer from the “free rider syndrome” – the hope that others will pay for something even if you do not.
The “pledge system” is an attempt to have a fee that is decided upon by the individual, yet retains an element of the community decision found in most fee systems. In a pledge system, students have the opportunity to pledge that they will donate to an organization if enough other students donate such that there will be sufficient funding to support the organization. These systems still have dramatically lower student participation rates than either a waivable or refundable system because students have to pro-actively seek out to pledge funding. However, the fact that there is some level of community decision involved and that there is some assurance that enough donations will come in to support the activity means that this system can be viable for larger projects under the right circumstances.
Back to 'Student Fees'