Campus facilities are a growing concern for colleges and universities challenged by declining enrollment and rising costs, according to Gordian’s 2025 State of Facilities in Higher Education report.
Now in its 12th year, the report warns that aging buildings and deferred maintenance will continue to put pressure on institutions that are limited in funding. “Our data once again indicate that campus facilities will remain a tremendous drag on any school not financially prepared … act or be acted upon,” the report states.
Enrollment cliff, budget pressures and facilities challenges
Higher education leaders have long expected a drop in students starting in 2025—that reality is now here. A 13% decline in high school graduates is expected between now and 2041.
The report notes that tuition-dependent schools may need to reduce staff, property and programs to survive. “Most sustaining models involve reimagining the institution as a smaller place,” the report says, while others may face a merger or closure.
Investment and maintenance shortfalls
While renovation funding rose 26% from 2022 to 2023, inflation continues to offset gains. The report notes a 32.5% gap between what schools are investing and what’s needed to maintain their buildings.
Deferred maintenance remains high, with campuses averaging more than $140 per gross square foot in backlog, according to the report.
“Without those capital renewal dollars, it is not possible for a building to stay in adequate condition,” the report warns.
Operating budgets strained by facilities demands
Facilities operations spending rose 4.5% this year but rising costs—including salaries, supplies and maintenance—keep narrowing the margin. Utility spending dropped 3.3% but other areas grew by about 6.3%.
Staffing remains a concern, especially as facilities employees are asked to manage more space. This “represents a likely reduction in resiliency or capacity to address unplanned adverse conditions,” the report suggests.
AI adoption still slow
Artificial intelligence is making its way into higher education facilities operations but many campuses are proceeding with caution. Only 11% are actively using AI and 53% are exploring its potential. Key barriers include limited skills, system integration issues and unclear returns on investment.
College leaders must be proactive
Still, some leaders see promise. “Now is the time to think differently about your future,” says Tom Rodgers, chief facilities officer at Penn State. “Don’t be afraid of the technology. It’s going to enhance what you are doing and will make your decisions better, today.”
The report encourages college leaders to stay informed, plan ahead and explore emerging tools like AI. The risks of delay are growing, especially as facilities continue to age and budgets remain tight.
“The best outcomes will arise only if we step forward to join in the creation of the future that will serve us best,” the report concludes.
