The federal government allocated approximately $138 billion on education in fiscal year 2013. Calculating that figure is challenging. Federal programs administered by the U.S. Department of Education appear in two separate parts of the federal budget, and other agencies administer large programs as well. Furthermore, measuring spending on the federal student loan program is not straightforward, and the government provides significant subsidies for higher education in the form of tax benefits.
Therefore, the $138 billion figure includes the annual appropriation for the U.S. Department of Education, spending for the U.S. Department of Education not subject to annual appropriations (i.e. mandatory spending), school meal programs administered by the U.S. Department of Agriculture, the Head Start program in the Departments of Health and Human Services, the forgone revenue and spending on education tax benefits for individuals, the cost of the subsidy the government provides on all student loans disbursed in a single year, and military and veterans education benefits.
The federal government spent a total of $3.7 trillion in fiscal year 2012. That means the approximate $138 billion in education spending accounts for less than 4 percent of the entire federal budget.
|Federal Education Spending, FY 2013 ($ billions)|
|Dept. of Education: Appropriation||65.7|
|Dept. of Education: Mandatory (excludes student loans)||15.9|
|School Nutrition Programs*||14.9|
|Head Start Programs*||8.0|
|Education Tax Expenditures for Individuals||21.0|
|American Opportunity Tax Credit (Refundable)||6.5|
|Student Loan Subsidies (Newly Disbursed Loans)**||-5.5|
|Servicemembers Education Benefits*||0.5|
|Veterans Education Benefits*||11.1|
|Sources: New America Foundation; U.S. Departments of Education, Health & Human Services, Agriculture, Defense, and Veterans Affairs; White House Office of Management and Budget; Congressional Budget Office|
|*Post-sequester figures are not available; uses pre-sequester FY 2013 allocations.|
|**Reflects fair-value accounting method.|
Department of Education Appropriation
Nearly all federal education programs are funded through the annual appropriations process, but a few, such as student loans, are funded on an ongoing basis through mandatory spending. The appropriations for the Department of Education totaled $65.7 billion in fiscal year 2013, accounting for 5.5 percent of the $1.2 trillion in total appropriations funding across all federal agencies that year.
|Source: White House Office of Management and Budget|
Numerous programs make up the $65.7 billion fiscal year 2013 appropriation for the U.S. Department of Education. The majority of funding went to just three programs: Elementary and Secondary Education Act Title I Grants to Local Education Agencies, the Individuals with Disabilities Education Act (IDEA) State Grants, and the Pell Grant program for college students. Collectively these three programs received $53.0 billion in fiscal year 2013.
|Source: U.S. Department of Education Budget Tables|
A relatively small number of federal education programs are funded through mandatory spending. Budget figures for the largest of these, federally-subsidized student loans for postsecondary education, are difficult to compare to programs funded through the appropriations process. This is because the budget reflects student loan costs under a special set of accrual accounting rules that are meant to show the lifetime costs of loan cohorts in present value terms. More information on federal student loan budget rules can be found here. The main programs other than student loans that regularly receive mandatory funding include a part of the Pell Grant program and Vocational Rehabilitation state grants.
Department of Education Appropriation Since 2000
After the passage of the No Child Left Behind Act in 2002, appropriations for some federal education programs grew rapidly from fiscal years 2001 through 2004. Specifically, Elementary and Secondary Education Act Title I Grants to Local Education Agencies and IDEA State Grants were allocated significant funding increases. Additional funding for the Pell Grant program also contributed to overall appropriations increases for federal education programs. The rate of growth slowed later in the decade, however, and funding actually declined in nominal terms from 2006 to 2008. In fiscal year 2009, significant funding increases for new and existing education programs were included in economic stimulus legislation, the American Recovery and Reinvestment Act of 2009, causing a rapid one-year increase in federal spending.
|Source: President's 2014 Budget Request Historical Tables|