Colleges are confronting accelerating operating costs as Commonfund’s Higher Education Price Index showed 3.6% sector inflation for 2025, outpacing prior decades’ expectations. Institutions face higher utilities, technology and labor costs while tuition revenue is under pressure from falling traditional‑age enrollments and shifting demographics. Those budget strains helped push at least 15 nonprofit colleges to close in 2025 and prompted credit‑rating agencies to warn of a negative outlook for parts of the sector. Analysts from Fitch and consultants flagged "hidden costs" such as deferred maintenance, rising healthcare expenses and volatility in research funding as key contributors to fiscal stress. Boards and finance officers are being urged to model stress scenarios, prioritize cash preservation and explore programmatic realignment — or face further consolidations and institutional exits from the market.