In a recent study, de Araujo and Murray (2010) find empirical evidence that living on campus leads to improved student performance, finding both immediate effects (GPA improves while the student lives on campus) and permanent effects (GPA remains higher even after moving off campus). Using the same dataset, we extend the analysis to explain why students that live on campus perform better. We examine two possible channels. First, we examine whether on-campus students are more likely to take advantage of university provided resources (libraries, tutors, computer technology, university sponsored extracurricular activities, etc) than off-campus students. Secondly, we examine peer influences and interactions, including collaborative studying with friends and/or classmates and engagement in drug and alcohol consumption. For both these channels, we look for evidence of immediate and permanent effects. We find significant peer-effect channels that explain the positive permanent effect of academic performance from living on campus, and find two channels that explain why students should immediately perform better while they live on campus, but the evidence does not point to utilization of university resources.