Two Decades of Change in Federal and State Higher Education Funding

Recent trends across levels of government

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Two Decades of Change in Federal and State Higher Education Funding
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Figure 1 Higher Education Is Overall a Small Part of Federal Spending but the Third-Largest Category in State Budgets Postsecondary education funding as a share of total federal expenditures ($3.98 trillion), FY 2017

Other
federal
spending
Federal spending on major
higher education programs
across all agencies
Federal spending 98 2
Major categories of state general fund spending, state FY 2017
Billions of dollars
Elementary and secondary education 283
Medicaid 156
Higher education 78
Corrections 53
Public assistance 9
Transportation 5
All other 209

Note: These data include funding that flows to public, nonprofit, and for-profit higher education institutions and their students, excluding federal loans and tax expenditures. See the technical appendix for more details.

Sources: Pew’s analysis of data from the U.S. Office of Management and Budget, “Historical Tables”; U.S. Department of Education, National Center for Education Statistics’ Integrated Postsecondary Education Data System; U.S. Department of Education, “FY 2017 Budget Request” and “State Funding History Tables”; National Science Foundation, National Center for Science and Engineering Statistics, “Survey of Federal Funds for Research and Development Fiscal Years 2016-17”; U.S. Department of Veterans Affairs, “FY 2017 Budget Submission”; and National Association of State Budget Officers, “2018 State Expenditure Report”

Figure 2 Federal and State Investments Are Both Sizable, but Differ in Nature Spending categories by level of government, academic year 2017
General purpose appropriations State research, agriculture, and medical education appropriations State financial aid grants Other federal grant programs Federal veterans educational benefits Federal research funding Other federal financial aid grants Federal Pell grants
Federal 3.0 2.2 13.6 26.5 1.7 27.7
State 66.0 10.2 11.0
Local 10.5

Note: These data include spending that flows to public, nonprofit, and for-profit higher education institutions and their students, excluding loans and tax expenditures. Numbers may not add up due to rounding. Federal numbers have been adjusted from federal fiscal years (October to September) to academic years; state data are unadjusted because both state fiscal and academic years run from July to June. See the technical appendix for more details.

Sources: Pew’s analysis of data from the U.S. Department of Education, National Center for Education Statistics’ Integrated Postsecondary Education Data System; U.S. Department of Education, “FY 2019 Budget Request” and “State Funding History Tables”; Department of Veterans Affairs Budget in Brief Volume III, “Benefits and Burial Programs and Departmental Administration,” fiscal year 2019; National Science Foundation, National Center for Science and Engineering Statistics, “Survey of Federal Funds for Research and Development Fiscal Years 2016–17”; State Higher Education Executive Officers Association, “State Higher Education Finance,” fiscal year 2018; and National Association of State Student Grant and Aid Programs, “48th Annual Survey Report on State-Sponsored Student Financial Aid: 2016-2017 Academic Year”

Figure 3 Federal and State Higher Education Spending Shifted Significantly During and After the Great RecessionTrends in major expenditure categories, academic years 2007-17, adjusted for inflation
year Federal Pell grants Federal research funding Federal veterans educational benefits State general purpose appropriations State research, agriculture, and medical education appropriations State financial aid grants
2007 16.18690398 27.59481281 3.915086191 68.19603692 11.95337175 9.038259555
2008 19.10085585 26.96004558 3.934391584 70.43937727 12.54922392 9.182823454
2009 29.78706062 31.98564033 4.567033045 68.04527345 11.88829561 9.637271047
2010 37.41998011 32.82394481 8.577286967 66.5197958 11.18698414 9.896403297
2011 37.1507632 29.15669625 11.11764008 61.87817036 10.84985406 10.07861471
2012 34.07957855 27.59447852 11.59731774 56.90827318 10.21534353 9.957273689
2013 33.0445128 25.89747852 12.8234955 56.56186351 10.27292 10.0216091
2014 31.4003444 26.06066289 13.44573195 59.83529799 10.3862089 10.22870059
2015 29.08539509 26.14409015 13.80681928 63.04148119 10.25424003 10.74037453
2016 27.01669073 26.63307976 14.14615361 64.36554239 10.28363808 10.92704045
2017 27.68750991 26.36745254 13.64558348 65.968 10.23597091 10.978581

Note: Data include spending for public, nonprofit, and for-profit higher education institutions and their students, excluding loans and tax expenditures. See the technical appendix for more details

Sources: Pew’s analysis of data from the U.S. Department of Education, “State Funding History Tables,” fiscal years 2007-17; National Science Foundation, National Center for Science and Engineering Statistics, survey of federal funds for research and development, fiscal years 2007-17; State Higher Education Executive Officers Association, “State Higher Education Finance,” fiscal years 2012-17; National Association of State Student Grant and Aid Programs, annual survey report on state-sponsored student financial aid, academic years 2007-17; U.S. Department of Veterans Affairs, “Annual Budget Submission,” fiscal years 2008-19; National Bureau of Economic Research, “U.S. Business Cycle Expansions and Contractions”

Figure 4 Federal and State Higher Education Funding Converged Shortly After the Recession Revenue per full-time equivalent student flowing to colleges and universities, by level of government, state FY 2000-15, adjusted for inflation
Academic Year Federal revenue State revenue
2000 3676 7345
2001 3948 7663
2002 4216 7168
2003 4443 6632
2004 4621 6245
2005 4636 6113
2006 4435 6130
2007 4336 6359
2008 4243 6426
2009 4432 5957
2010 5019 5219
2011 5111 4980
2012 4877 4585
2013 4704 4604
2014 4555 4890
2015 4544 5099

Note: Data include funding for public, nonprofit, and for-profit higher education institutions and their students, excluding loans and tax expenditures. See the technical appendix for more details.

Sources: Pew’s analysis of data from the Delta Cost Project Database, based on original data from the U.S. Department of Education, National Center for Education Statistics’ Integrated Postsecondary Education Data System; National Bureau of Economic Research, “U.S. Business Cycle Expansions and Contractions”

Figure 5 Most Pell and Research Dollars Go to Public Institutions, While More Veterans’ Benefit Funding Flows to Private Ones Distribution of funds for major federal higher education programs by institution type, academic year 2017
Public
enrollment
Private
nonprofit
enrollment
Private
for-profit
enrollment
Federal spending 70 23 7
Public Private nonprofit Private for-profit
Pell 70.3 15.4 14.4
Research 60.9 37.3 0.0
Post-9/11 GI Bill 36.7 28.6 34.7

Note: Data are adjusted to academic year. See the technical appendix for more details.

Sources: U.S. Department of Education, National Center for Education Statistics’ Integrated Postsecondary Education Data System; U.S. Department of Education, Office of Federal Student Aid, “Title IV Program Volume Reports”; National Science Foundation, “Higher Education Research and Development Survey,” fiscal year 2016; U.S. Department of Veterans Affairs, “Post9/11 GI Bill Data,” http://www.va.gov/transparency/Post-9-11-GI-Bill-Data.xlsx

Figure 6 The Post-9/11 GI Bill Has Driven Increases in Veterans’ Education Benefits Federal spending on veterans’ higher education programs, FY 2007-17, adjusted for inflation
Year Post-9/11 GI Bill Total of other programs
2006 0.00 3.88
2007 0.00 3.93
2008 0.00 3.94
2009 0.18 4.59
2010 6.22 3.63
2011 8.37 3.18
2012 9.04 2.57
2013 10.69 2.53
2014 11.11 2.41
2015 11.57 2.33
2016 11.82 2.41
2017 11.06 2.39

Notes: The “Total of other programs” section includes seven different programs. Data are adjusted for inflation using the U.S. Bureau of Labor Statistics’ Consumer Price Index and presented in constant 2017 dollars.

Sources: Department of Veterans Affairs Budget in Brief Volume III, “Benefits and Burial Programs and Departmental Administration,” fiscal years 2008-19; National Bureau of Economic Research, “U.S. Business Cycle Expansions and Contractions”

Figure 7 Federal Student Borrowing Grew Sharply After the Recession and Has Since Been Declining Value of loan issuances, academic years 2007-18, adjusted for inflation
Year Unsubsidized Stafford Subsidized Stafford Parent PLUS Grad PLUS Perkins Loans
2007 29.69 30.50 9.91 2.55 1.97
2008 32.56 34.59 9.15 3.66 1.64
2009 46.33 37.86 8.81 4.96 1.10
2010 52.64 43.04 10.06 6.43 0.93
2011 52.82 45.47 11.86 7.79 0.96
2012 51.54 44.53 12.16 8.21 1.04
2013 60.24 29.64 10.47 8.11 1.08
2014 58.03 27.73 10.79 8.50 1.23
2015 54.45 25.47 11.07 8.62 1.20
2016 52.00 23.53 12.26 9.07 1.07
2017 50.84 22.05 12.80 9.82 0.90
2018 48.96 21.00 12.82 10.32 0.80

Note: Includes loans that flow to students attending public, nonprofit, and for-profit higher education institutions.

Sources: Pew’s analysis of data from the College Board, “Trends in Student Aid 2018,” based on original data from the U.S. Department of Education, National Student Loan Data System; National Bureau of Economic Research, “U.S. Business Cycle Expansions and Contractions”

Figure 8 Federal Support for Postsecondary Education Via the Tax Code Expanded Substantially Around the Recession Value of higher education tax benefits, FY 2000-17, adjusted for inflation
Year Billions of 2017 Dollars
2000 13.45
2001 13.28
2002 15.87
2003 16.90
2004 16.83
2005 18.75
2006 19.12
2007 16.55
2008 19.87
2009 23.66
2010 32.23
2011 38.04
2012 36.17
2013 32.93
2014 35.64
2015 33.26
2016 33.02
2017 40.48

Note: Data include tax expenditures that flow to students attending public, nonprofit, and for-profit higher education institutions. See the technical appendix for more details.

Sources: Pew’s analysis of data from the U.S. Department of the Treasury as presented in the Office of Management and Budget, “Analytical Perspectives: Budget of the United States Government,” fiscal years 2002-19; National Bureau of Economic Research, “U.S. Business Cycle Expansions and Contractions”

Figure 9 Federal and State Funding Account for Significant Shares of Public College and University Budgets Total revenue for public institutions, by source, FY 2017
Revenue
Self-supporting operations 90.80
Net tuition and fees 79.53
All other 37.35
Private gifts, investment revenues, and endowment income 36.17
Local revenue 15.91
Federal revenue 50.10
State revenue 82.32

Note: Data include operating and nonoperating revenue received by public higher education institutions. Just under 1 percent of all such institutions report their funding using the standards of the Financial Accounting Standards Board and may not include Pell Grants under federal revenue. For more information see the technical appendix.

Source: Pew’s analysis of data from the U.S. Department of Education, National Center for Education Statistics’ Integrated Postsecondary Education Data System

Figure 10 Public Institutions Rely on Federal, State, and Other Major Funding Sources at Varying Levels Across States Composition of revenue per full-time equivalent student, by state, FY 2017
State Federal revenue State revenue Local revenue Net tuition and fees Private gifts, investment returns, and endowment income Self-supporting operations All other
Michigan 5948.23 5338.23 1615.50 12119.82 8711.96 16639.15 1458.63
Oregon 6705.06 6346.93 2113.61 9181.07 3932.06 20054.99 2769.75
Utah 5042.39 7779.56 20.86 6461.60 3495.53 26705.65 1335.83
District of Columbia 7152.00 24556.05 1575.56 10883.38 2087.40 224.35 3937.02
Hawaii 9692.68 20013.58 0.00 7473.66 1669.77 3595.49 6561.90
Pennsylvania 5299.37 5150.02 416.42 13854.08 5592.56 16785.55 1652.96
Iowa 5278.44 7174.36 1247.45 8131.16 3235.00 20364.49 3042.30
Alaska 8647.08 20265.49 1069.00 7734.13 3876.07 2687.50 3453.11
Vermont 7130.08 3769.07 0.00 20257.95 6916.83 6568.83 1598.46
New Mexico 7110.99 10648.69 3244.24 3650.74 2114.61 15680.78 3739.93
Connecticut 3769.19 14889.23 12.14 8573.79 1066.91 10658.14 6846.40
Texas 4205.71 7004.22 3140.18 6056.52 7398.15 5768.91 9126.70
Kentucky 4693.35 8230.57 206.16 7429.83 1982.03 16981.60 3091.75
Wyoming 4023.18 17291.55 1980.53 3949.64 4285.94 3349.34 7042.61
Alabama 5301.14 7666.05 73.09 9304.88 3581.88 14010.37 1676.29
Washington 6387.77 7409.47 711.39 7790.52 4624.63 11383.92 3285.06
Delaware 5068.17 8486.28 221.78 14446.71 7070.76 4914.30 1326.16
Ohio 3375.13 6208.89 568.70 10161.79 4526.82 13629.87 1693.41
Colorado 9362.75 2769.25 511.96 11206.28 3693.73 9317.90 2931.98
Virginia 4382.43 6519.50 82.03 9954.35 4866.52 11240.73 2294.51
Illinois 4467.93 5511.52 3565.65 7798.78 1407.72 6551.80 9954.92
California 4395.27 8641.74 2979.85 5017.64 2094.28 11144.68 4618.72
Arkansas 4066.84 8933.10 404.54 5535.85 1998.63 14267.57 3018.38
Nebraska 4535.06 10320.35 2326.91 6360.01 5243.07 6074.81 2966.19
United States 4706.71 7733.84 1494.27 7471.15 3397.83 8530.63 3509.29
Maryland 7196.85 9178.21 1993.59 8193.66 1838.84 5207.62 2826.66
Massachusetts 4448.56 10075.24 72.85 9516.48 1805.22 4354.34 5926.33
Mississippi 5160.77 8729.21 564.45 5528.78 1411.57 11747.92 2903.25
North Carolina 5297.03 12518.49 831.98 5948.08 3304.39 5781.33 1441.35
Oklahoma 4090.83 7368.17 2544.51 6996.22 2596.64 7996.21 2788.40
New Hampshire 3522.87 4310.85 104.76 12253.68 4078.50 7168.61 2285.94
North Dakota 4815.63 9548.16 199.85 8537.53 1941.15 5632.41 2371.36
New York 4312.15 10446.63 2123.74 5208.84 1087.19 6245.96 2966.48
Wisconsin 4653.43 6806.08 2523.47 6978.44 3763.73 3959.25 3448.55
New Jersey 3706.09 8100.47 901.62 9405.52 1891.73 5256.30 2740.96
Indiana 4210.39 7359.86 28.72 10617.54 3408.92 4045.33 2083.91
Missouri 3268.17 5702.06 945.88 6577.95 2835.92 10352.43 1642.96
Minnesota 4491.71 8783.01 357.64 7409.31 4279.44 4548.46 1247.04
Montana 6354.85 7081.13 294.84 8318.19 1911.05 4079.25 2832.93
South Carolina 4397.49 6514.18 492.34 10267.60 2374.93 4328.29 2333.11
Kansas 3981.41 6223.22 2290.29 7210.32 1703.18 4986.01 2214.00
West Virginia 3553.49 7008.16 76.92 8778.00 2650.71 3893.11 1613.95
Rhode Island 4120.66 6342.80 0.00 9407.75 688.42 4446.96 2344.24
Arizona 4421.82 3283.08 3680.07 9420.65 2064.05 2318.27 2092.90
Georgia 5018.81 7339.04 85.18 6947.70 2272.40 4121.22 1334.09
Maine 3876.33 9341.19 0.00 6862.10 2094.25 3672.41 1232.97
South Dakota 4479.12 6469.62 40.77 7626.80 1860.52 3792.09 2567.49
Tennessee 3978.84 9339.05 165.79 6312.58 2017.90 2828.10 1995.87
Louisiana 3761.99 5676.67 12.80 7341.28 4160.64 3348.92 1976.46
Idaho 4169.92 8627.53 580.03 6760.30 1577.90 2595.77 1121.12
Nevada 3631.15 8064.74 372.97 5541.75 2103.05 2560.42 1048.38
Florida 4057.12 7980.11 143.16 4513.89 2494.29 1666.75 1338.66

Note: Federal revenue in Pennsylvania and Delaware is understated because of those states’ use of Financial Accounting Standards Board accounting standards. Colorado’s net tuition and fees are overstated and its state revenue is understated because of the way data are captured in the source.

Source: Pew’s analysis of data from the U.S. Department of Education, National Center for Education Statistics’ Integrated Postsecondary Education Data System