Costs at U.S. colleges and universities rose 2.7 percent in fiscal year 2021, up from 1.9 percent in FY2020 but essentially level with the five-year average of 2.6 percent, an annual report from the Commonfund Institute finds.

Calculated every year since 1983, the Commonfund Higher Education Price Index (28 pages, PDF) is based on eight cost components: faculty salaries, administrative salaries, clerical costs, service employee costs, fringe benefits, miscellaneous services, supplies and materials, and utilities. According to the FY2021 index, costs rose in all eight categories, although the rate of increase slowed in three: Faculty salaries, the most heavily weighted component of the index (35 percent), rose 1 percent, compared with 2.7 percent in FY2020; clerical costs (18 percent weight) rose 2.8 percent, down from 3.2 percent; and miscellaneous services (2 percent weight) rose 2 percent, down from 2.8 percent. The 1 percent increase in faculty salaries was the lowest since FY2002.

The cost of fringe benefits (13 percent weight) rose 4.1 percent, up from 3.2 percent, while service employee costs (8 percent weight) increased 4.3 percent, up from 4 percent; and administrative salaries (11 percent weight) rose 1.6 percent, up from 1.5 percent. The sharpest increase in costs was seen in utilities (7 percent weight), at 15 percent, compared with a 15.7 percent decline in FY2020. A similar mirror-image reversal occurred in supplies and materials (6 percent weight), where costs were up 3.5 percent, after a 3.5 percent decline the previous fiscal year. Utilities and supplies and materials showed the most significant deviations from the categories’ five-year averages of 3.3 percent and 1.8 percent.

According to the report, overall inflation rates by region ranged from 1.2 percent in the Mountain region to 2.8 percent in the Middle Atlantic region, while changes in faculty salaries ranged from a 2.5 percent drop in the Mountain region to a 1.5 percent increase in the Middle Atlantic region.

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