Launched in December of 2023, the new Free Application for Federal Student Aid (FAFSA) form was intended to significantly streamline and simplify the processes used to award federal student aid. Unfortunately, the rollout has been anything but streamlined, leaving millions of students in limbo, wondering whether they will be able to start or continue attending college in the coming semesters. USA Today reported that only 5 million applications have been completed compared to 17 million completed in the same period last year. As of April, 27% fewer high school seniors have applied for FAFSA. The obvious effects are less students attending college in the fall and following semesters and we are still waiting to see how this will impact enrollment overall or if this impact will be temporary.

Assuming the FAFSA issues will be resolved soon, demand for affordable housing remains high and institutions are scrambling to find short and long-term solutions. University systems have historically planned for 25%–30% on-campus housing for traditional freshman and sophomore populations. With the demand outweighing supply, students are being forced into the housing market war where skyrocketing prices are creating significant financial challenges, especially amongst transfer and graduate students. Forbes recently reported, “student housing is now among the most in-demand commercial real estate asset classes, and as demand has continued to outstrip supply, student housing has become more and more expensive...With an estimated 20.5 million enrollments by 2027, the top 175 American universities [are] only able to house 21.5 percent of their undergraduates in on-campus housing.” Despite the enrollment cliff issues, housing remains a need and a sector component of sustained construction need.

Increased automation, safety, and adoption of AI in experimentation are driving unmanned labs and the expansion of computational research capabilities and associated infrastructure. Of respondents to SCUP’s Campus Facility Inventory Report, “71 percent of participants are either likely or extremely likely to expand computational research facilities in the next year,” an increase of 10%. Increases in conventional and new wet lab spaces were north of 18% and show continued demand. 40% indicated the likely addition of fabrication / makerspace capabilities.

In our last report, we mentioned strength for Agricultural Sciences, Engineering, Biological/Biomedical Sciences, Health Sciences and Physical Sciences. Within the Physical Sciences segment, several major facility and program initiatives associated with Quantum research are taking hold across the country and universities are committing significant capital and creating initiatives to get into the game. The science offers some world-changing technologies and applications across a broad spectrum of industries, estimated to drive more than $3.5 Trillion in economic growth. Colorado recently announced it secured federal designations as a Regional Technology and Innovation hub focused on advancing quantum technology.

Women’s athletics are finally getting the recognition and spotlight the athletes deserve. Stars like Caitlin Clark drove record-breaking viewership in March Madness this year with revenue exceeding $1B. This explosive interest is driving up overall revenues and showing the real intent behind Title IX within university athletic programs. Although Athletics and Recreation slipped a few slots on the SCUP Campus Facility Inventory for Planned Changes, 51% of respondents indicated updating or adapting facilities and 32% indicated desires for building new athletic facilities.

Collegiate sports has experienced an unprecedented change in the last few years primarily centered around Name, Image and Likeness (NIL). The June 2021 Supreme Court ruling against the NCAA has created a College Collective Chaos where some extraordinary “pay for play” deals are emerging. A potential unintended consequence is that funds traditionally aligned for University athletic facility portfolio work are seeing a redirection to specific athletes. Last quarter we reported on some of the positive impacts Athletic programs provide as an additional institutional financial leverage (Deion Sanders-CU) and this space will be an interesting watch for the next several years.