Financing Higher Education: How Education Cooperatives Are Changing the Game

Confusion. Lack of concrete information. Uncertainty.

Colleges and universities are in unknown territory right now. Already dealing with the enrollment cliff and rising costs, academic institutions are now worrying about dramatic changes to government policies and funding mechanisms.

In just one week in April:

• The federal government put $9 billion of Harvard contracts and grants under review.
• DOGE directed the National Institutes of Health to cut $2.6 billion in NIH research grants.
• Major changes were proposed to Title IV student aid
• Research grants at Princeton and Brown were threatened following similar actions against Columbia and the University of Pennsylvania.

These are just some of the major challenges that get the headlines. As institutions worry about whether they’re next, it’s become nearly overwhelming. Most colleges and universities may have no choice but to go through restructuring for financing higher education, leading to layoffs, program cuts, and significant cost reduction.

Serious belt tightening requires a thorough review of expenditures. It requires an even more strategic approach to spending and provides an opportunity for procurement leaders to solidify their reputation as problem-solvers. Partnering with an education cooperative like E&I Cooperative Services can be part of the solution, helping colleges and universities be proactive in saving money and helping their institutions navigate these challenging times.

Education Cooperatives Produce Significant Savings

Public and private education institutions spend a combined $702 billion a year on goods and services. Imagine if you could shave just 5% off of that total. That would add up to savings of more than $35 billion. Now, consider that an education cooperative can often save 10% to 15% on the costs of goods and services. Applied against multiple spending categories, it can add up quickly.

By combining the purchasing needs of its members, cooperatives can achieve larger volume discounts. For example, E&I aggregates demand from nearly 6,000 academic institutions to solicit competitive bids, typically resulting in large-scale savings.

As financing higher education becomes more challenging, an education cooperative also provides additional benefits, including:

• Lower administrative overhead: Cooperatives handle the RFP process, competitive solicitation, contract negotiation, and compliance checks to streamline procurement.
• Better terms and conditions: Deep insight into member needs helps produce contracts that are more favorable to higher ed.
• Strategic partnerships: Cooperative contracts represent big business for suppliers, so they are more likely to work collaboratively and provide greater value.
• Spending insights: By analyzing spending data, you can uncover ways to bring more spend under contract and leverage cooperative contracts to reduce costs.
  
  

E&I Cooperative Services offers its members a no-cost Strategic Spend Assessment (SSA). Procurement specialists analyze spend and find ways to save, such as consolidating suppliers to reduce admin time and lower costs.

A good example of this is The State University of New York (SUNY) System which was looking to find $100 million in operational cost savings. They identified maintenance, repair, and operating (MRO) products as one area to consolidate. Across the system, they were utilizing more than 6,000 different suppliers for various services at their 64 campuses. Using E&I’s Grainger contract, SUNY was able to:

• Achieve better pricing on each line item in the portfolio
• Expand MWBE partnerships for greater diversity
• Work with Grainger to create market baskets of commonly purchased items to identify additional savings opportunities.
  
  

Partnering with E&I Cooperative Services can also generate revenue. Some contracts have rebates for purchasing. As a nonprofit organization, E&I invests proceeds back into the cooperative and also shares them with members in the form of patronage refunds based on member purchasing volume. In 2024, E&I distributed $3.35 million in cash to members.

Drive Greater Value and Reduce Costs

If you are looking for an education cooperative to help you reduce costs, there is only one member-owned, nonprofit cooperative that focuses solely on the education sector, and that’s E&I. This focus provides deep insight into the unique needs of higher education, helping drive greater value and produce contracts that align with institutional needs.

Many of the procurement professionals at E&I have come directly from higher education, giving them hands-on knowledge of the challenges to help guide operations. Category specialists also have a deep understanding of particular types of goods and services. This expertise helps source suppliers that can meet the stringent requirements of higher ed for compliance, diversity, sustainability, and more.

View available contracts at E&I Cooperative Services or learn more about the benefits of becoming a member.