The inflation rate for colleges and universities in the fiscal year that ended June 30 was 0.9 percent — less than half the 2.3 percent rate in 2009 and a continuation of a decelerating trend that began in 2008, a new report from the Commonfund Institute finds.

Calculated every year since 1983, the Higher Education Price Index 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. Since 2002, the index has been calculated using a regression equation that assigns different weight to each factor, with faculty and clerical salaries and fringe benefits weighted the most heavily.

This year's index (23 pages, PDF) found that the 2010 HEPI was slightly lower than the 1 percent Consumer Price Index for the same period. The chief cause of the deceleration in the index, according to the report, was a decline in prices in the categories of supplies and materials and utilities, which offset modest increases in other, more heavily weighted areas. The biggest increase in 2010 was in the category of fringe benefit costs, which were up 2.1 percent in 2010, down from a 3.6 percent rise in 2009.

Geographically, the 2010 HEPI ranged from a high of 1.8 percent in the West South Central region to a deflationary -1.2 percent in the East South Central region. In all regions, the index exhibited a continuation of the slowdown in higher education inflation that has been observed for the past two years.