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College Inflation Expected to Rise by 2.6 Percent in 2019

U.S. colleges and universities are expected to see a 2.6 percent rise in inflation during the current fiscal year, the Commonfund Institute, an independent investment management firm has revealed.

The estimate is part of Commonfund Higher Education Price Index (HEPI) which is calculated with information reported by government agencies and industry sources, based on data available year-to-date through April 30, 2019.

According to Commonfund, HEPI, often characterized as an inflation index, is used by higher education institutions to project future budget increases required to preserve purchasing power. It measures the average relative level in the price of goods and services purchased by colleges and universities each year through current fund educational and general expenditures, excluding research.

“Educational institutions rely on HEPI as a critical input to their financial planning and investment decisions each year,” Cathleen Rittereiser, executive director for the Commonfund Institute, said. “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).”

In order to enable higher education institutions to better predict their financial futures and plan their budgets, the firm is planning to regularly release HEPI estimates throughout the year.

“We observed a growing demand for more frequent HEPI forecasts and more granular data tailored to types of institutions and regions,” Rittereiser added. “We are excited to expand the HEPI offering for the investment and business officers that rely on it.”

The firm also plans to introduce regional variants of HEPI for nine geographic regions across the U.S. later this year.

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