Skyrocketing Refunds Pose Pricey Obstacle

The diverse and immensely valuable student organizations here at Stanford are facing the direst threat in years:  the ASSU’s refund process is poised to become extremely expensive and may jeopardize the very student organizations that rely on student money.

The ASSU disburses the vast majority of funds to Stanford’s myriad student groups, which serve the needs of the Stanford community. These monies are collected from Stanford’s undergraduate and graduate student bodies at the rate of $119 per student per quarter.

According to the ASSU constitution, students are entitled to receive refunds for this ‘tax’ up to the third week of the quarter. Students can request refunds from specific student groups through the ASSU, ostensibly so that students can choose which student groups to support on an ideological or otherwise basis.

Student associations are split into two groups – special fee applicants and general fee applicants. Organizations supported by the general fee are restricted to $6,000 in ASSU aid, with an exception up to $7,000 for community service groups.

Special fee groups are not limited to a specific amount. Special fee groups include the Stanford Band, Stanford’s radio station, KZSU, and the Stanford Daily, which relies on the ASSU for almost $60,000 in student fees.

Altogether, 51 organizations take advantage of the special fees process. The ASSU buffer fund is valued at approximately $450,000, but if refunds continue at their current rate this fund could be exhausted in as little as a year. The ASSU has a commitment to student groups to cover an assumed refund rate of 10% for each student organization. In past years, refunds have been below 10%, actually increasing the size of the buffer fund.

Any withdrawals past that 10% percent are usually taken out of the organization’s operating budget or reserve fund. In the recent past, refunds have been slightly over 10%, but the ASSU decided to cover the expenses anyway. Now, refunds are well above 10% and the ASSU has decided to follow the bylaws and not cover any refund amounts over 10%.

Costs have increased 23% over the past three years, from $96 in 2007 to $119 in 2010. One cause behind the rising costs of running Stanford’s student organizations is the budget process itself.

The Budget Process

Many groups easily gain approval for a large budget increases and an additional dispensation for inflation. According to Undergraduate Senator and Review Editor Alex Katz ‘12, “Historically, groups have found it very easy to add 10% and inflation to their budgets and get approval from the Senate.”

If a student group’s budget is poised to grow by more than 10% in a year, then the group merely needs 10% of the student body’s signatures to move the budget to the Senate. In a move to slow the growth of these student activity budgets proposed by Katz, the ASSU Senate passed a bill last week that removed the built-in 10% increase and now only provides for inflation.

Refunds on the Rise

The number of refunds is a second source of financial instability. The number of Stanford students exercising their right to a refund has increased from 408 in Winter Quarter of 2008 to 1132 in this quarter, and full refunds have increased from 119 to 379 over the same period

Why has the refund system ballooned in the past five years? Senator Anton Zietsman ‘12, Chairman of the Senate Appropriations Committee, explained, “An overall increase in the quarterly student fee coinciding with the economic downturn, as well as an increasing awareness of the refund process – due to certain initiatives led by the Conservative Society – have been the leading causes in the drastic increase in the refund rate this year.”

In the 1960s and 1970s, when the refund system was first implemented to give students a voice on ASSU spending, the refund rate rose quickly, forcing the ASSU to become more fiscally responsible.  Today, the refund rate is rising because the costs of the system are growing quickly, due to the budget process.

The prevailing economic conditions surely make the refund very attractive as well. Many students see the refund as an easily acquired $119, despite the fact that someone else is paying that tuition. The ASSU’s custom of making it out in the form of a check doesn’t aid this perception.

Finally, student awareness of this seemingly free money has undoubtedly increased in recent months. The Stanford Conservative Society passed out fliers throughout campus to raise awareness about the refund process.

Thomas Schultz ‘11, the President of the Stanford Conservative Society, explained, “The Stanford Conservative Society sought to increase awareness of the voluntary special fee refund program because most students do not even know it exists. Students deserve the ability to determine where our money goes. We view the refund as essentially akin to a tax cut and wish to empower students whenever possible.”

The ASSU’s Dilemma

The ASSU exists to serve the interests of Stanford’s students, including a rich and flourishing student activity scene. The current refund solution may not be enough to stave off a future shortfall.  In the coming months, Stanford’s students will see how well the ASSU’s efforts have fared.