Higher education institutions slowed campus renovations and capital spending in 2024, a new report finds.
Construction data and research firm Gordian is unveiling the next installment of The State of Facilities in Higher Education—a comprehensive needs-based analysis of higher education institutions and facilities. This 12th edition reveals a cautious landscape in which many colleges are reevaluating their physical footprint, cost structures and long-term investment strategies.
While the 2024-2025 academic year saw a 4.5% spike in student enrollment, long-term forecasts predict a 13% decline in high school graduates between 2025 and 2041. Combined with a drop in international student enrollment, many institutions are facing a shrinking pool of students and a need to realign facilities and infrastructure with enrollment trends.
Throughout the nation, facilities on higher education campuses are aging and lack financial support for what the report calls the “inevitable entropic demands of buildings and their systems.” As is natural with all campus buildings beyond a service life, they must be repaired, renovated or replaced.
The report indicates that deferred capital renewal costs on campuses have risen to over $140 per gross square foot (gsf), reflecting a 2% increase from last year. This rise represents a larger jump from just under $125/gsf in 2022. This escalation shows a growing backlog in essential maintenance and upgrades across campuses.
This backlog is compounded by a 32.5% funding shortfall, which continues to represent a barrier to sustainability and growth on campuses. While down from the previous year’s 34%, operational spending rose by 4.5% over the last year, outpacing inflation and lagging behind pre-pandemic levels.
Despite shortfalls, the report does indicate areas of growth for campuses. Approximately 27% of institutions are expanding at an average rate of growth of 3%. Though expansion projects are generally at schools that have not yet been burdened by high repair and replacement costs.
Gordian’s data shows that institutions are factoring long-term operational costs into decisions about facility upgrades. While some campuses are enhancing facilities to meet new programming needs, many are also exercising caution due to uncertainties in funding and future enrollment.
The federal government is reportedly reassessing its role in education financing, with potential changes to financial tools and support systems that could directly affect campus infrastructure investments in the years ahead.
The State of Facilities in Higher Education report also includes discussions on emerging influences on campuses nationwide. This year, higher education institutions are looking ahead to the future of artificial intelligence (AI) and the impacts AI will have on education.
The growth of free AI tools, such as ChatGPT in 2022 and builds by Apple, Google, Microsoft in 2024, will allow educational facilities to research and explore AI, seeking to enhance communications, content creation and operations.
Approximately 11% of institutions that responded to the survey are actively implementing AI tools in facilities management, with an additional 53% exploring AI applications, according to the report. This trend reflects a growing interest in leveraging technology to enhance operational efficiency and address staffing shortages.
“One goal is self-managing buildings,” Alosanar founder Emmanuel Daniel said in the report. “Buildings that know what they need, when they need it and can call out for help at such times. Benchmarkable buildings that can compete with each other, learn from each other and optimize their own performance in service of the people and the systems inside them would be a tremendous step forward.”
Notably, the current state of AI does not allow for this level of management, as institutions still require a surplus of data to properly implement these integrated systems, according to the report.
The State of Facilities in Higher Education report draws from a database of over 43,000 campus buildings and spaces and more than $13.5 billion in capital and operating budgets at higher education institutions. Gordian collaborates with these institutions, including APPA – Leadership in Educational Facilities and the National Association of College and University Business Officers, to create a comprehensive report, analysis and outlook of campuses for industry stakeholders.
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