Higher Education Price Index Is Estimated to Drop but Still Exceeds Inflation

The organization that calculates the inflation rate for higher education said today that it estimates that the Higher Education Price Index for the 2009 fiscal year will be 2.8 percent.

While the figure for 2009 would be the lowest since 1999, when the increase was 2.4 percent, cost increases in higher education this year still appear to be on track to exceed those in the economy as a whole. For the 12 months ending March 31, the latest for which figures are available, the Bureau of Labor Statistics said that the Consumer Price Index decreased by 0.4 percent. It was first 12-month decrease since August 1995.

The Higher Education Price Index, commonly known by its acronym, HEPI, is based on costs for eight categories of goods and services on which higher education spends money. Personnel and related costs account for about 85 percent of those costs.

The estimated increase in those costs for 2009 is lower than the 3.6-percent rate of increase for the 2008 fiscal year that the Commonfund Institute published last July. A week later, it issued an addendum, citing a higher rate of 4.6 percent, which it said was a better reflection of colleges’ utility costs that year.

In announcing the 2009 HEPI estimate, Commonfund said it also planned to change the methodology it uses to calculate its index so that the statistics it relies on are all aligned to a June 30 fiscal year, which is typical for colleges. The organization plans to release its final HEPI figure for 2009 in July. —Goldie Blumenstyk