Chapter 4: Federal Programs for Education and Related Activities

This chapter provides a summary of federal legislation and funding for education that describes the scope and variety of federal education programs. Data in this chapter primarily reflect outlays and appropriations of federal agencies. These tabulations differ from federal receipts reported in other chapters because of numerous variations in the data collection systems. Federal dollars are not necessarily spent by recipient institutions in the same year in which they are appropriated. In some cases, institutions cannot identify the source of federal revenues because they flow through state agencies. Some types of revenues, such as tuition and fees, are reported as revenues from students even though they may be supported by federal student aid programs. Some institutions that receive federal education funds are not included in regular surveys conducted by the National Center for Education Statistics (NCES). Thus, the federal programs data tabulated in this chapter are not comparable with figures reported in other chapters. Readers should also be careful about comparing the data on obligations shown in table 380 with the data on outlays and appropriations appearing in other tables in this chapter.

Federal on-budget funding for education increased 323 percent from fiscal year (FY) 1965 to FY 2008, after adjustment for inflation (table D and table 373). Between FY 1965 and FY 1975, federal on-budget funding for education increased 149 percent. After a decrease of less than 1 percent from FY 1975 to FY 1980, there was a further decrease of 16 percent from FY 1980 to FY 1985. Thereafter, federal on-budget funding for education generally increased. After adjustment for inflation, federal on-budget funding for education increased by 14 percent from FY 1985 to FY 1990, by 20 percent from FY 1990 to FY 1995, by 9 percent from FY 1995 to FY 2000, and by 36 percent from FY 2000 to FY 2008.

Table D. Federal on-budget funding for education, by category: Selected fiscal years, 1965 through 2008

Between FY 1990 and FY 2000, after adjustment for inflation, federal on-budget funding increased for three of the four major categories reported: elementary and secondary education (by 57 percent), other education (by 28 percent), and research at educational institutions (by 35 percent) (table D, table 373, and figure 18). During the same period, funding for postsecondary education decreased by 13 percent. Between FY 2000 and FY 2008, federal funding increased for each of the four major categories: elementary and secondary education (by 30 percent), postsecondary education (by 93 percent), other education (by 14 percent), and research at educational institutions (by 15 percent).¹ For FY 2009, federal program funds were estimated to be $82.9 billion for elementary and secondary education, $37.2 billion for postsecondary education, and $8.6 billion for other education programs (table 375). (FY 2009 data on research at educational institutions were not available at the time this publication was prepared).

After adjustment for inflation, off-budget support (federal support for education not tied to appropriations) and nonfederal funds generated by federal legislation (e.g., private loans, grants, and aid) showed an increase of 137 percent between FY 1990 ($18.1 billion in FY 2009 dollars) and FY 2000 ($43.0 billion in FY 2009 dollars) (table 373). In FY 2008, these same funds totaled $77.2 billion in FY 2009 dollars, an increase of 80 percent over FY 2000. In FY 2009, these funds were an estimated $86.4 billion.

In FY 2008, federal on-budget funds for education totaled $147.3 billion in current dollars (figure 19 and table 374). The U.S. Department of Education provided about 49 percent ($72.2 billion) of this total. Large amounts of money also came from the U.S. Department of Health and Human Services ($25.5 billion), the U.S. Department of Agriculture ($16.3 billion), the U.S. Department of Defense ($6.3 billion), the U.S. Department of Labor ($5.2 billion), the National Science Foundation ($4.6 billion), the U.S. Department of Energy ($4.6 billion), the U.S. Department of Veterans Affairs ($4.6 billion), and the National Aeronautics and Space Administration ($2.4 billion).

In FY 2008, educational institutions (including local education agencies, state education agencies, and degree-granting institutions) received an estimated 67 percent ($98.2 billion in current dollars) of federal program funds for education (table 376). Another 15 percent ($21.6 billion) was used for postsecondary student support. Other education organizations (including Head Start programs at child care centers, Job Corps and other vocational programs, adult basic education programs, and federal programs at libraries and museums) received 12 percent ($18.2 billion) of federal program funds for education. Federal institutions received 4 percent ($5.2 billion). Other recipients (including American Indian tribes, private nonprofit agencies, and banks) received 3 percent ($4.1 billion) of federal program funds for education.

Of the $75.1 billion in current dollars spent by the U.S. Department of Education in FY 2009, about 40 percent ($29.7 billion) went to local education agencies (school districts) and 11 percent ($8.3 billion) to state education agencies (table 377 and figure 20). About 19 percent ($14.1 billion) went to postsecondary institutions and another 19 percent ($14.3 billion) to postsecondary students. Smaller percentages (totaling 12 percent) went to federal institutions, other education organizations, and other recipients.

Chronology of Federal Education Legislation

A capsule view of the history of federal education activities is provided in the following list of selected legislation:

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