• Introduction
• Highlights
• References

This report attempts to provide a comprehensive picture of total federal financial support for education since fiscal year (FY) 1980.¹ In addition to Department of Education programs, the many other federal programs that support education are included. The report also includes other types of federal support that are sometimes overlooked.

This report puts federal education funding into three categories: on-budget funds, off-budget support, and nonfederal funds generated by federal programs.

On-budget funds are provided through programs funded by congressional appropriations. Although some consolidation of education programs in one federal agency was achieved with the establishment of the U.S. Department of Education in 1980, many large and significant federal education programs remain outside the Department. In addition, many federal programs involving education have other primary purposes. In order to account fully for all federal support for education, programs residing in other federal departments and agencies having significant educational components are included in this report, even if they have additional purposes.

Off-budget support is federal money that has been excluded from the budget by law. Off-budget support in this report consists of the loan capital that is provided directly by the federal government under the William D. Ford Federal Direct Student Loan (FDSL) program.

Nonfederal funds generated by federal programs result from federal loan guarantees and interest subsidies to support loan capital raised through various private and public sources. Nonfederal funds are also made available for education purposes when federal programs require matching funds or offer incentives and subsidies. Almost all such nonfederal education funds go to postsecondary education.

Education programs can be supported either by direct funding or by indirect funding mechanisms such as tax expenditures. In this report, federal tax expenditures include only reductions in tax revenue received by the federal government due to deductions, exemptions, and credits allowable in the tax code. Unless otherwise noted, tables and discussions of federal support in this report do not include federal tax expenditures.

To the extent possible, outlays were used in this report rather than obligations, with the exception of funds for academic research at institutions of higher education. Outlays are the actual amount of dollars spent. Obligations are spending commitments by the federal government that will require outlays either immediately or in the future.

Table A.—Federal on-budget funds for education, by level or other educational purpose, and off-budget support and nonfederal funds generated by federal legislation: Fiscal years 1980, 1989, 1990, and 1999

The federal government provides support for education well beyond programs funded through the Department of Education. Federal support for education, excluding esti-mated federal tax expenditures, was an estimated $115.6 billion in FY 99 (table A), an increase of $52.8 billion, or 84 percent, since FY 90. After adjustment for inflation, federal support for education increased 47 percent between FY 90 and FY 99.

For FY 99, on-budget federal funds for education programs were estimated to be $82.8 billion, an increase of 60 percent since FY 90 in current dollars² or an increase of 28 percent after being adjusted for inflation. Off-budget support and nonfederal funds generated by federal legislation (predominantly postsecondary education loans) were estimated at $32.8 billion, a rise of 193 percent in current dollars between FY 90 and FY 99 and 134 percent in constant dollars.

Between FY 80 and FY 99, after being adjusted for inflation, federal on-budget program funds for elementary and secondary education³ increased 24 percent; postsecondary education funds declined 18 percent; other education funds (which include funds for libraries, museums, cultural activities, and miscellaneous research) increased 87 percent; and funds for research at universities and university-administered research and development centers increased 66 percent.

Between FY 90 and FY 99, federal on-budget funds for elementary and secondary education increased 44 percent in constant dollars, postsecondary education funds increased 6 percent, other education funds increased 36 percent, and research funds at colleges and universities increased 22 percent.

In FY 99, Department of Education outlays totaled $34.5 billion (table B), reflecting an increase of 32 percent after being adjusted for inflation from FY 80 and an increase of 19 percent between FY 90 and FY 99. The Department of Education's share of total federal on-budget education funds rose from 38 percent in FY 80 to 45 percent in FY 90, and dropped to 42 percent in FY 99 (figure A).

Between FY 80 and FY 99, estimated federal tax expenditures, after being adjusted for inflation, increased 41 percent. Between FY 90 and FY 99, they went up 57 percent. Estimated federal tax expenditures' share of total federal support in education was 32 percent in FY 99.

Table B.—Largest providers of federal on-budget funds for education in fiscal year 1990, by agency: Fiscal years 1980, 1989, 1990, and 1999

Figure A.—Percentage distribution of federal on-budget funds for education, by agency: Fiscal year 1999

Over 58 percent of federal education support, excluding estimated federal tax expenditures, went to educational institutions in FY 99. Another 20 percent was used for student support. The remaining 22 percent went to banks and other lending agencies, libraries, museums, and federal institutions.

Schools and colleges derived 11 percent of their FY 99 revenues from the federal government, with the remaining revenues coming from state and local governments, individuals, and private organizations. Of the estimated $618.6 billion in direct expenditures by schools and colleges in FY 99, revenues from federal sources amounted to $67.4 billion and revenues from other sources amounted to $551.2 billion.

The estimated federal share of expenditures of educational institutions declined from 14 percent in FY 80 to 10 percent in FY 90 and 11 percent in FY 99. Among elementary and secondary educational institutions, the federal share declined from 12 percent in FY 80 to 7 percent in FY 90 and 8 percent in FY 99. Among institutions of higher education, the federal share declined from 18 percent in FY 80 to 14 percent in FY 90 and 15 percent in FY 99.

¹ Some data have been revised from Federal Support for Education: Fiscal Years 1980 to 1998 (Hoffman 1998) and Digest of Education Statistics: 1998 (Snyder 1999). In addition to the data covering FY 80 to FY 99, appendix tables in the full report include historical data from FY 65, FY 70, and FY 75.

² Current dollars are amounts that have not been adjusted for inflation. Constant dollars are amounts that have been adjusted by means of price indexes to eliminate inflationary factors and allow direct comparison across years. In this report, constant dollars were computed based on the federal funds composite deflator from the U.S. Office of Management and Budget (OMB 1999). The inflation index rose 99.3 percent between FY 80 and FY 99.

³ In this report, elementary and secondary education programs include adult and vocational education programs in the U.S. Department of Education as well as other training programs, such as those in the U.S. Department of Labor (the Job Corps and other job training programs) and those in the U.S. Department of Veterans Affairs.