Background & Analysis

The Federal Education Budget Project’s background and analysis pages provide detailed information on federal PreK-12 and higher education programs and spending.

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Learn about the federal budget process and federal education programs below.

The federal government funds several higher education grant programs in addition to the Pell Grant Program. Those grant programs are explained below.

Federal Supplemental Educational Opportunity Grant (SEOG) Program

The SEOG Program provides federal funds for need-based grants directly to approximately 4,000 participating institutions of higher education. The government uses a statutory formula to determine how much each institution receives, and then universities and colleges are required to contribute institutional funds equivalent to 1/3 of the federal allocation. In contrast to Pell Grants and student loans, SEOG grants are campus administered. Recipient institutions have flexibility in deciding how to distribute the funds as long as they prioritize students with exceptional financial need. Students are typically awarded grants ranging from $100 to $4,000 per year, with the average award being $716 per year. The number and level of grants depends on the availability of funds at each school. For the 2012-13 school year, the program was allocated $696 million in federal funds.

In the 2011-12 school year, the City University of New York - Central received the largest SEOG disbursement at $10.4 million and the Cannella School of Hair Design in Illinois received the smallest at $512.

Federal Work-Study (FWS) Program

The Work-Study Program provides federal funds to institutions of higher education to support part-time employment for low-income students as part of their financial aid package. Students at participating institutions may be eligible for Work-Study aid based on their financial information submitted in the Free Application for Federal Student Aid (FAFSA). Institutions may use federal Work-Study funds to subsidize employment opportunities for students at either the school or with outside employers.

Congress sets total available funding for the Work-Study program through the annual appropriations process. The Department of Education allocates funds to each institution according to that school’s past funding levels under the program and the total financial need of eligible students enrolled in the school during the previous year. Approximately 3,400 institutions participate in the program. Usually, the participating school or employer must fund at least half of each student’s wages, which must be at least the federal minimum wage. Institutions of higher education determine a student’s Work-Study award based on the student’s financial need and the amount of funding the school receives through the program. The average award per student in fiscal year 2012 totaled $1,700 per academic year. Congress provided the program with $926 million in fiscal year 2013, roughly the same as it had in the previous five fiscal years.

In the 2011-12 school year, Berea College in Kentucky received the largest Work-Study grant at $11.7 million and Williamson Christian College in Tennessee received the smallest at $200.

Funding for Low-Income and Minority-Serving Institutions

Title III of the Higher Education Act of 1965 provides funds directly to institutions of higher education that serve low-income and minority students. Approximately $1.05 billion was made available for these initiatives in fiscal year 2013. Title III funds can be used by relevant institutions to improve academic quality through staff or curricula development, support administrative improvements, or expand fiscal capacity, for example by establishing endowment funds. Other activities such as construction, infrastructure improvement, and student services are also supported by Title III funds.

Institutions must demonstrate that they support low-income or minority students in order to be eligible for Title III funds. Title III, Part A aid generally goes to institutions at which a large percentage of the student body receives a Pell Grant or other need-based federal aid. A portion of Part A funds are also set aside for American Indian Tribally-Controlled Colleges and Universities. Title III, Part B aid is specifically for Historically Black Colleges and Universities. Hispanic-Serving Institutions can receive similar competitive grants under Title V of the Higher Education Act.

Higher Education Grant Programs 2011-12 Academic Year*
Program Funding (billions) Maximum Grant Average Grant Number of Recipients
Pell Grants $35.5 $5,550 $3,711 9,607,000
ACG $0 $750/$1,300** $0 0
SMART $0 $4,000 $0 0
SEOG $0.735 $4,000 $669 1,389,943
Work-Study $0.976 Varies $1,700 683,029
Aid for Minority-Serving Institutions $0.707 N/A N/A N/A
*Most recent year available from U.S. Department of Education for average grant amount and number of recipients.
**First-year students received $750, second-year students received $1,300.
Source: U.S. Department of Education; New America Foundation
Published Sep 3 2013 15:13