The annual Commonfund Higher Education Price Index (HEPI) report was released for 2019 showing that inflation for U.S. colleges and universities rose 2.5 percent in fiscal year 2019, a decline from last fiscal year’s 2.91 percent rate and in line with the five-year average of 2.4 percent.
HEPI is an inflation index designed specifically for use by institutions of higher education. Compiled from data reported by government agencies and industry sources, HEPI measures the average relative level in the price of a fixed market basket of goods and services purchased by colleges and universities each year through current fund educational and general expenditures, excluding research. A more accurate indicator of cost changes for colleges and universities than the CPI, HEPI is used primarily to project future budget increases required to preserve purchasing power.
With compilations dating back to 1961, HEPI offers nearly 60 continuous years of higher education inflation data. It is an essential tool enabling schools to determine increases in funding necessary to maintain both real purchasing power and investment. In 2005, Commonfund Institute assumed responsibility for the index and the proprietary model used to calculate HEPI’s values from Research Associates of Washington, D.C.
- In 2015, the American Association of University Professors (AAUP) began using a new methodology that was not directly comparable with the past; therefore, data on faculty salaries and fringe benefits, was excluded from the 2016 and 2017 HEPI reports. The conversion has been completed and data on faculty salaries and fringe benefits is now included. Additionally, due to this modification, the FY2018 HEPI number has been restated to 2.9 percent (from 2.8 percent).