Observation

Like the proverbial deer in the headlights, institutions around the world are coping with reduced funding and often using similar tactics for cost containment and revenue enhancement.

• Publicly supported institutions understand that reduced state budgets will affect them for many years into the future. Thirty-five states are assuming reduced fiscal resources will be available in 2010, while 42 states were forced to reduce their previously enacted 2009 budgets.

• Community colleges have been hit the hardest and been very creative about when they offer courses (all night long) and even who pays for them (anyone who is willing to donate to support a course).

• Space management is becoming a key area of concern, as no one wants the continuing operational costs of new construction. Likewise, energy management is high on everyone’s list.

Our Thoughts

The Higher Education Price Index (HEPI), as well as tuition, continues to outpace the Consumer Price Index (CPI), even though it dropped from 5 percent to 2.3 percent. Some are asking if higher education will be the next ‘bubble’ to burst.

• The highest percentage increase came in administrative salaries at 5.4 percent, up from 5 percent the year before. Virtually all the other components of the index had lower increases this fiscal year than last.

• According to the National Center for Public Policy and Higher Education, over the past 25 years, average college tuition and fees have risen by 440 percent—more than four times the rate of inflation and almost twice the rate of health care costs.

• Tuition and fees at private colleges rose at the lowest rate in 37 years (4.3 percent), but still higher than the CPI, which was 3.8 percent in 2008.