Costs at U.S. colleges and universities rose 4.0 percent in fiscal year (FY) 2023, down from 5.2 percent in FY2022, but still more than double the rate in FY2020, an annual report from the Commonfund Institute finds.

The results of the Commonfund Higher Education Price Index: 2023 Update (HEPI) (32 pages, PDF), are based on data addressing eight cost components: faculty salaries, administrative salaries, clerical costs, service employee costs, fringe benefits, miscellaneous services, supplies and materials, and utilities calculated annually by Commonfund since 1983.

Cost inflation rose in four of the eight components tracked by HEPI compared with FY2022, with both faculty salaries and administrative salaries increasing 4 percent and 4.1 percent, respectively. The costs for fringe benefits rose 2.8 percent and miscellaneous services rose 4.9 percent. HEPI components that saw a decrease in inflation rates in FY2023 included clerical costs (down to 5 percent); service employee costs (down to 6.4 percent); supplies and materials (7.5 percent, down from FY2022’s increase of 21.5 percent over FY2021); and utilities, which saw a 3.7 percent decrease following FY2022’s increase of 43.1 percent.

According to the report, this is the second straight year that the Consumer Price Index, showing an average 6.3 percent increase in general inflation, exceeded the targeted higher education costs measured by HEPI. The report also noted that while faculty salaries—which make up 35 percent of HEPI’s weighted average—rose nationwide in FY2023, when adjusted for inflation, real salaries continued to decline in real purchasing power, part of a steep 5-year trend not seen since 1982.

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