Inflation at U.S. colleges and universities rose 1.9 percent in fiscal year 2020, a decline from FY2019's 3.01 percent rate and the lowest reading since the 1.5 percent registered in FY2016, an annual report from the Commonfund Institute finds.

Calculated every year since 1983, the Commonfund Higher Education Price Index (24 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. According to the index, higher education inflation in fiscal year 2020 was the lowest since FY2016's 1.5 percent rate, and significantly below the three-year average of 2.9 percent.

The analysis also found that costs rose for six of the eight cost components in FY2020, including faculty salaries — the most heavily weighted component of the index — up 2.7 percent; administrative salaries (1.5 percent); clerical costs (3.2 percent); fringe benefits (2.9 percent); miscellaneous services (2.8 percent); and service employees (4 percent). The only categories that saw declines were utilities, down 15.7 percent, and supplies and materials, down 3.5 percent. The FY2020 inflation rate for administrative salaries, faculty salaries, supplies and materials, and utilities were below their respective five-year averages, while the rate for clerical salaries, service employee salaries, fringe benefits, and miscellaneous services was higher.

According to the report, overall inflation rates by region ranged from 0.6 percent in the Mid-Atlantic (New Jersey, New York, Pennsylvania), to 2.9 percent in New England (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont), to 3.6 percent in the West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota) region. Increases in faculty salaries ranged from 1.2 percent in the East South Central (Alabama, Kentucky, Mississippi, Tennessee) region to 5 percent in the West South Central (Arkansas, Louisiana, Oklahoma, Texas) region, and rose 3 percent at private institutions and 2.8 percent at public institutions.