98% of state support for higher education goes to public institutions. State Direct Appropriations for Higher Education. This means having an understanding of the billions of dollars made available through spending programs and the tax code. State funding has decreased continually for the past two decades and most recent federal tax reform and financial aid administrative actions have further diminished overall higher education funding and access. These aid programs benefitted 5 million student in FY2016, an increase from 700,000 in FY 2011, and the Department of Education set a goal of 7 million student IDR loans for FY 2017. The federal government plays a critical role in providing financial support for higher education. Because these expenditures allow taxpayers to reduce their income taxes, they reduce federal revenue and are similar to direct government spending. Ninety-eight percent of state and 73 percent of federal higher education funding flows to these institutions. Local funding of $9.2 billion largely supports the general operating expenses of community colleges. Policymakers across the nation face difficult decisions about higher education funding. In 2013 the federal government spent nearly $76 billion on higher education, while states spent about $3 billion less, according to the "Federal and State Funding of Higher Education" study. The value of federal tax expenditures for higher education is $29 billion larger than it was in 1990 in real terms. A new study points out that state funding cuts for colleges over the past 30 years may be a result of increased welfare spending and changing public perceptions of higher education. 3 Tax on Endowments Became Law, Chronicle of Higher Ed, March 8, 2018. State governments spent $87 billion on higher education in 2017. However, higher education is unlike these other areas, where there are generally federal-state funding matches or states are required to maintain a certain funding level to receive federal dollars. FEDERAL FUNDS FOR HIGHER EDUCATION. The critical result is decreased access to higher education opportunity. When a revenue problem develops due to recession, state support declines. States, by contrast, provided only $840 million in loans that year, less than 1 percent of the federal amount. Historically, states have provided a far greater amount of assistance to postsecondary institutions and students; 65 percent more than the federal government on average from 1987 to 2012. In addition, it will be necessary to think about the implications of parity and whether funding strategies will require changes in order to reach desired outcomes. Included in the brief are policy and practice changes that address meeting college attainment goals and ensuring affordability for low and middle income students. 1 Overview States and the federal government have long provided substantial funding for higher education, but changes in recent years have resulted in their contributions being more equal than at any time in at least the previous two decades. Schools in New York spent $23,091 per pupil, the highest tally of any state, followed by the District of Columbia, Connecticut, New Jersey and Vermont. Indiana University’s Lilly Family School of Philanthropy estimates that 80 percent fewer taxpayers would itemize for charitable giving under the new law which will directly reduce the level of charitable donations overall2. For example, North Carolina’s and Wyoming’s constitutions stipulate that public institutions should be as close to free as possible, and schools in both states receive above-average state revenue and below-average net tuition revenue. During the past two decades, state and federal funding trends have significantly reduced student access to higher education programs. In higher education, states can, for the most part, cut spending without a loss of federal support. Public colleges and universities educate 68 percent of the nation’s postsecondary students. The federal government mainly provides financial assistance to individual students and specific research projects, while state funds primarily pay for the general operations of public institutions. Higher education was the third-largest area of state general fund spending in 2013 behind K-12 education and Medicaid. 40-year career includes President of Wayne State University, Founding Provost of Khalifa University in Abu Dhabi, the founding Dean College of Public Health The University of Nebraska Medical Center, as well as the Executive Vice President and Provost for the University of Nebraska. The Inspector General’s report noted that the problem is due to the increased income-driven repayment (IDR) loans, which allow students to repay their loans over an extended time period in correlation to their actual income. Federal funding variation stems from differences in students’ financial needs and in the types of research conducted in each state, among other factors. Federal Education Funding Sources . State Funding Cycles • Higher education funding is cyclical. This brief outlines the current structure of federal and state higher education policies and funding that emerged consequently. In early March a new bill, “The Don’t Tax Higher Education Act,” was co-sponsored by Rep. John Delaney, Democrat of Maryland, and Rep. Bradley Byrne, Republican of Alabama. With the temporary increase in funding for the federal highway trust fund set to run out by May 2015, states and localities are again facing the prospect that shortfalls in the fund could delay or reduce the federal money they rely on for transportation projects. Policymakers, meanwhile, are deciding whether to restore funding after years of recession-driven cuts billion larger than it federal and state funding of higher education. In personal income 1.2 million ( 8 percent ) furthermore, US trends in during! Of funding provided by states and the United Arab Emirates cost, of states! By the power of knowledge to solve today 's most challenging problems 1 provides an overview the! 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