Inflation at institutions of higher education in the fiscal year ending June 30 rose 2.5 percent — down from a revised 2.9 percent in 2018 and 3.4 percent in 2017, an annual report from the Commonfund Institute finds.
Calculated every year since 1983, the Commonfund Higher Education Price Index (16 pages, PDF) is based on eight cost factors: faculty salaries, administrative salaries, clerical salaries, service employee salaries, fringe benefits, miscellaneous services, supplies and materials, and utilities. The 2019 index found that inflation at colleges and universities in FY2019 was in line with the five-year average of 2.4 percent, although the past three fiscal years have averaged 2.9 percent, compared with 1.7 percent over the first two years of the period.
In FY2019, inflation accelerated for three cost components — clerical costs, which rose 3.5 percent, up from 2.9 percent in FY2018; administrative salaries, which rose 2.4 percent, up from 2.2 percent; and service employee costs, which rose 4 percent, up from 3.4 percent. Fringe benefits saw the largest decline, rising only 2.4 percent, compared with a 3.5 percent increase in FY2018, while faculty salaries — the most heavily weighted component, at 35 percent of the index — increased 2 percent, down from 2.8 percent; utilities increased 0.9 percent, down from 1.7 percent; and supplies and materials increased 4.1 percent, down from 4.3 percent. The inflation rate for the miscellaneous services component remained unchanged from FY2018, at 2.4 percent.
According to the report, inflation over the five-year period was most volatile in the areas of utilities, with inflation ranging from -20.2 percent in FY2016 and -13.2 percent in FY2015 to 14.5 percent in FY2017, and supplies and materials, with inflation jumping 11.2 percent in FY2014, averaging declines of -3.4 percent from FY2015 to FY2017, and then rising in both FY2018 and FY2019. Data analysis by type of institution and by region was not available at the time of publication.