College costs are about to get even higher. The Higher Education Price Index is forecasting inflation for U.S. colleges and universities to increase by 2.6% for this fiscal year. The forecast takes into consideration the average relative price of goods and services purchased by colleges through educational and general expenditures, excluding research.
Last year, the Higher Education Price Index estimated the inflation for 2018 at 2.8%.
Colleges and universities have depended on the Higher Education Price Index for nearly 60 years to determine the budget increases in funding necessary to keep their real purchasing power and investment, so the data is influential and trusted by academia. Commonfund Institute, an independent investment management firm, has assumed responsibility and control of the index since 2005.
“As an intentionally designed inflation measure, HEPI allows schools to more accurately plan for future budget increases rather than depending on generic measures like the Consumer Price Index (CPI),” said Cathleen Rittereiser, Executive Director for Commonfund, in a press release from the firm.
The CPI has the inflation rate at 2% for the 12 months ended April 2019.
Interestingly enough, documented tuition hikes are trending higher than both metrics.
The College Board reports that between 2008-09 and 2018-19, published in-state tuition and fees at public four-year institutions rose at an average, inflation-adjusted rate of 3.1% per year, compared with average annual increases of 4.1% and 4.2% over the two prior decades.
As society continues to put pressure on high schoolers to pursue a four-year degree, college costs seem to rise at an artificially quick clip, which results in college graduates getting a progressively smaller return on investment from their education. According to a report from Burning Glass Technologies, a job market analytics software company, 43% of college graduates are underemployed in their first job.
Meanwhile, many lucrative open positions that don’t require a four-year degree are left unfilled. Last year, even NPR reported high shortages in skilled trades.
Societal pressures like the “college for all” movement, which serve to increase the perceived value of higher education, are actually reducing it, all while lining the pockets of colleges and universities.
Brendan Pringle (@BrendanPringle) is writer from California. He is a National Journalism Center graduate and formerly served as a development officer for Young America’s Foundation at the Reagan Ranch.
