In 2025, higher education institutions across the United States are grappling with unprecedented financial and operational challenges. Budget deficits, staffing shortages, and rising operational costs are converging to create a perfect storm for procurement professionals. According to a recent report, 30–40% of universities are now facing budget deficits, many in the hundreds of millions of dollars, requiring innovative procurement and cost management approaches.
Amid these pressures, cooperative purchasing organizations (CPOs) like OMNIA Partners, Sourcewell, TIPS, and E&I Cooperative Services are emerging as vital allies. By leveraging collective buying power, these organizations enable educational institutions to achieve cost savings, streamline procurement processes, and mitigate staffing constraints.
The Financial Squeeze on Higher Education
The financial challenges confronting higher education are multifaceted. While state funding for higher education rose by 4.3% for FY 2025, gains were largely offset by inflation, with 20 states seeing declines in state support. Additionally, operational costs—from wages and benefits to utilities and compliance—continue to outpace inflation. Demographic pressures further exacerbate the situation, with the number of high school graduates in the U.S. projected to decline steadily over the next 15 years.
These financial strains are leading institutions to implement hiring freezes, reduce staff travel, and reconsider existing contracts and services. A recent survey found that 42% of higher education institutions anticipate IT budget decreases in the 2025–2026 academic year, with a median of 8% in expected budget decreases.
Cooperative Purchasing: A Strategic Solution
Cooperative purchasing offers a strategic avenue for institutions to navigate these challenges. By aggregating demand across multiple entities, CPOs negotiate contracts that provide significant cost savings and operational efficiencies. To cement financial and operative security, cooperative contracts for education are competitively solicited and compliant with public purchasing rules and regulations, ensuring transparency and legal adherence.
Key Benefits:
- Cost Savings: Leveraging the collective buying power of numerous institutions results in lower prices for goods and services.
- Time Efficiency: Access to pre-negotiated contracts accelerates the procurement process, reducing administrative burdens.
- Compliance Assurance: Contracts are vetted to comply with legal, transparent, and ethical guidelines, aligning with institutional and governmental regulations.
- Resource Optimization: With limited staffing, institutions can rely on the expertise and support provided by CPOs to manage procurement activities effectively.
Leading Cooperative Purchasing Organizations
OMNIA Partners: Offers an extensive portfolio of contracts for higher education, enabling institutions to achieve their strategic goals through efficient procurement processes.
Sourcewell: Provides hundreds of competitively solicited cooperative contracts ready for use by colleges and universities, helping them save time and money.
TIPS (The Interlocal Purchasing System): Facilitates cooperative purchasing for educational institutions, offering access to competitively priced contracts across various categories.
E&I Cooperative Services: A member-owned, nonprofit procurement cooperative delivering solutions and services to the education community, with no membership fees or minimum purchase requirements.
Real-World Impact
Institutions that have embraced cooperative purchasing report tangible benefits. For example, universities have achieved significant cost reductions in areas such as IT, facilities management, and office supplies by utilizing contracts from CPOs. These savings enable institutions to reallocate funds to critical areas, such as student services and academic programs.
Moreover, the streamlined procurement processes facilitated by CPOs alleviate the workload on limited procurement staff, allowing them to focus on strategic initiatives rather than administrative tasks.
As higher education institutions continue to face financial and operational pressures, cooperative purchasing emerges as a viable solution to navigate these challenges. By partnering with organizations like industry providers, institutions can achieve cost savings, ensure compliance, and optimize limited resources. In an era where doing more with less is the norm, cooperative purchasing stands out as a strategic approach to sustain and enhance educational missions.
