Insights
Sep 29, 2025 _ insights
Don’t Cut Ambition, Sharpen Your Strategy: 4 Practical Strategies for Better Cost Certainty on Higher Education Capital Projects
Higher education is at a financial crossroads. Declining enrollment, reduced state and federal funding, and rising construction costs are putting unprecedented pressure on universities to do more with less. Four-year college enrollment is projected to shrink by as much as 15% between 2025 and 2029—except in the Southeast, which will see only modest growth (+3%). Meanwhile, construction costs have surged nearly 20% since 2019 and will continue to rise with inflation, labor shortages, and tariffs on materials. Competition for students is also forcing universities to invest more heavily in scholarships, freeze tuition, and enhance the student experience, which limits the dollars available for capital projects. One certainty in this changing landscape? Business-as-usual budgeting for campus capital projects is no longer a viable option.
University leaders need new tools to adapt, not by cutting ambition, but by sharpening strategy. These four practical tips are worth considering:
- Engaging users early in future-forward planning & programming.
- Creating an accurate and achievable budget.
- Building in time to properly reconcile the estimate after each phase.
- Hiring the right design team.
1. Engaging users early
Engaging early in future-forward planning and programming on projects can reduce costly surprises down the road. Before setting a budget, work with a small, well-rounded group (from deans and administrators to the end-users) to establish clear, measurable objectives that align with university and departmental leadership. Beyond this small group, engaging a broad spectrum of stakeholders early through surveys, interviews, and even virtual or augmented reality walkthroughs ensures better scope alignment with real user needs.
Build in futureproofing by asking deans about their goals for the program’s pedagogy and studying what peer institutions are doing to distinguish their programs. Instead of landing on a single program, develop a range of “good-better-best” program options to study the range of potential outcomes. Discussing the pros and cons of each leads to a healthy discussion that can illuminate differing opinions and ultimately lead to alignment on a preferred solution. Future-forward planning also must consider the lifespan of a building. It’s not enough to just consider costs for decisions made today; the full project life-cycle costs (like predicted energy use intensity) of decisions must also be considered.
Initial budget options from a recent study at the University of Cincinnati, illustrating the range of good-better-best options and their associated life-cycle costs and predicted energy use intensity
2. Creating an accurate & achievable budget
Creating an initial budget that is accurate and achievable will better withstand future budget check-ins throughout the project’s phases. Budgeting in a vacuum by relying solely on traditional $/sf modeling is no longer sufficient when costs are shifting so rapidly. These initial budgets must include appropriate escalation factors, contingency costs for both design and construction, and third-party validation from estimators or construction managers who track market data in real time. If the initial budget isn’t achievable from the start, it can lead to painful cuts later that compromise project vision.
Utilizing Target Value Design (TVD) is another tool that university leadership should consider. TVD creates buckets of costs based on materials or systems like exterior envelope or mechanical systems. It’s a way to evaluate smaller components of a whole project to see where costs are misaligned to the budget. TVD can help keep projects within budget through comparisons with past, similar projects; tying cost estimates to real market data; and analyzing cost drivers of specific components rather than resorting to blanket square-footage or quality cuts. This leads to better dialogue and decision-making about whether the cost is bringing value to the project.
Target Value Design in action: this example illustrates three similar projects and their prices categorized by systems.
3. Building in time
Building time into design schedules for detailed estimating and reconciliation at each phase reduces the risk of unpleasant surprises downstream, such as missed scope, misalignment on quality expectations, and budget increases. The design schedule is often compressed, causing the estimation phase to be the first to be cut between project stages. As the design team moves forward with the next phase, the risk of exceeding the budget increases with additional work.
Discovering that you need to make cuts to the project scope mid-phase can create extra work and pressure on the design team to make changes while also progressing on the development of the set. Ultimately, if not managed properly, this can lead to additional costs in undefined scope, errors, and omissions. In today’s uncertain construction cost environment, a better strategy is to maintain the estimating phase and adjust other phases or consider multiple release packages.
4. Hiring the right design team
Hiring the right design team with a proven track record of on-budget, on-time delivery is critical, as is looking for firms that bring innovative approaches to cost savings. Quality can be achieved at any price point with a team that uses creative problem-solving. Case in point: a recent dining facility renovation at the University of Cincinnati achieved six-figure savings through collaboration with fabricators to optimize the milling of custom feature wall panels—an innovation that maintained technical standards, cut costs, and achieved the distinctive look the client desired for the space.
The image above illustrates the progression of cost-saving measures from initial concept to execution. The numbers represent the total cost for the tile feature wall.
Quality is achievable at any cost. While it may be easier to do with bigger budgets, the more challenged a budget is the more creative your team must be to help you maximize your design dollars.
The process must be tailored to the problem. A different approach led to the right cost-saving solution for customized walls in the University of Cincinnati’s Digital Futures research facility. For this facility, UC wanted the space to express the ingenuity and collaboration of the research taking place there. To achieve this, while maintaining cost, UC students were invited into a design competition. The winning team also got to enhance their fabrication skills by helping to produce the custom wall panels featured in the space.
This strategy helped reduce project costs while also providing a learning and collaboration opportunity for students, allowing them to leave their mark on a university project.
The image above illustrates the progression of cost-saving measures from initial concept to execution. The numbers represent the cost per square foot and total cost for the wood feature wall.
It’s no longer business as usual for higher education capital projects. The path forward is not about cutting ambition but about sharpening strategy. By embracing more accurate estimating tools, fostering open dialogue with stakeholders, leveraging innovative delivery models, and insisting on accountability at every stage, universities can maximize the effectiveness of their capital dollars. In today’s environment, successful institutions won’t be those that build the biggest or flashiest projects, but those that align capital construction with financial reality—delivering spaces that meet student needs, uphold academic missions, and preserve institutional trust.
Zachary Zettler, AIA is a principal and director of higher education at GBBN. With over 20 years of experience designing campus spaces, Zachary is a trusted advisor to university clients and a recognized leader in higher education design. Zachary’s work includes University of Cincinnati’s MarketPointe and Marian Spencer.
