Inflation at institutions of higher education in the fiscal year that ended June 30 was 2.8 percent — down from 3.31 percent in 2017, which was the highest since 2008, a new report from the Commonfund Institute finds.
Calculated every year since 1983, the Commonfund Higher Education Price Index (HEPI) is determined by examining eight cost factors: faculty salaries, administrative salaries, clerical salaries, service employee salaries, fringe benefits, miscellaneous services, supplies and materials, and utilities. This year's index found that inflation at colleges and universities in FY2018 was higher than the 2.4 percent average for the preceding five fiscal years and the third highest over the last ten years.
While costs rose for all eight components tracked by HEPI, none rose as much as 2017's 14.5 percent increase in utility costs and 4.1 percent increase in fringe benefits, with increases ranging from 1.7 percent (utilities) to 3.4 percent (service employee costs). Faculty salaries — the most heavily weighted HEPI component, at 35 percent of the index — rose 3.2 percent, while the second-largest component, clerical costs, rose 2.9 percent, followed by fringe benefits (2.3 percent), administrative salaries (2.2 percent), supplies and materials (2.8 percent), miscellaneous services (2.4 percent), and utilities (1.7 percent).
According to the index, institutions of higher education in the West South Central region reported the largest average increase (3.7 percent), followed by those in the Pacific region (3.5 percent) and West North Central region (3.0 percent). Institutions in the Mountain region recorded the smallest increase (1.8 percent), with the average increase in other regions ranging from 2.2 percent to 2.8 percent.
The index also found that costs at public institutions rose 2.6 percent on average and 2.9 percent at private institutions, with the average at private doctoral institutions (3 percent) higher than at their public counterparts (2.5 percent) and higher at public master's degree-granting institutions (3 percent) than at private institutions (2.1 percent). Public two-year colleges saw an increase of 2.4 percent while private baccalaureate institutions recorded a 2.8 percent increase.