College Costs Creep Up in 2025

Key Points

• Increase: College expenses rose by 3.6% in the 2025 fiscal year, a slight increase from the 3.4% rise in 2024.
• Comparison: This is lower than the 4.0% jump in 2023, when schools were dealing with the fallout from the COVID-19 pandemic.
• HEPI: The Higher Education Price Index (HEPI) tracks these costs, focusing on goods and services that colleges and universities buy each year.

HEPI vs. CPI

• HEPI: Tracks costs specific to higher education.
• CPI: Tracks everyday consumer goods.
• 2025 Data: HEPI rose by 3.6%, while CPI only went up by 2.6%. This has happened in nine of the last 11 years.

Cost Categories

HEPI considers eight main cost areas:

1. Faculty pay (35%)
2. Clerical costs (18%)
3. Benefits (13%)
4. Admin salaries (11%)
5. Service worker pay (8%)
6. Utilities (7%)
7. Supplies (6%)
8. Other services (2%)

Most of these costs are tied to people, not things like food or clothes, which the CPI tracks.

2025 Fiscal Year Highlights

• HEPI: Higher than the average from the previous decade for the fifth year in a row.
• 2010-2019 Average: 2.2% annual HEPI.
• 2020-2024 Average: 3.4% annual HEPI, peaking at 5.2% in 2022.

Cost Category Increases

• Admin salaries: Rose by 4.8%, the highest increase.
• Faculty pay: Went up by 4.3%, the biggest jump since 1998.
• Utilities and service employee costs: Also saw big increases.
• Supplies and materials: Got cheaper, dropping by 0.2%.

School Type Increases

• Public four-year schools: 3.9% increase.
• Private nonprofit schools: 3.3% increase.
• Two-year public colleges: 4.6% increase, mostly due to faculty salary increases.

Faculty Salary Increases

• Public schools: 4.7% increase.
• Private schools: 3.6% increase.
• Two-year colleges: 8.7% increase.
• Master’s institutions: 5.4% increase.
• Doctoral universities: 3.1% increase.
• Private doctoral institutions: 4.9% increase.
• Private baccalaureate schools: 2.5% increase.
• Private master’s institutions: 1.4% increase.