The Facts on Federal Education Spending
November 9, 2006
Sweeping victories in the midterm elections have put Democrats
in charge of the 110th Congress. After twelve
years out of power, what will Democrats seek to accomplish in
federal education policy?
One common theme in their recommendations has been to increase
spending on both K-12 and postsecondary education. The
Democratic Party's 2004 criticized President Bush for "breaking his
word" on No Child Left Behind and "providing schools $27 billion
less than he promised, literally leaving millions of children
behind." The platform also criticized the Bush administration
for not providing enough federal funding for higher education and
student loans, charging that "President Bush tried to charge more
for student loans and eliminate Pell Grants for 84,000
Actually, federal education spending has grown dramatically over
the past six years under President Bush and the Republican
Congress. But more importantly, whether it's Republicans or
Democrats increasing federal funding, more federal dollars have not
improved American education in recent decades.
Consider K-12 education spending. Annual U.S. Department
of Education spending on elementary and secondary education has
increased from $27.3 billion in 2001 to $38 billion in 2006, up by
nearly 40 percent. According to the department, annual
spending on the Title I program to assist disadvantaged children
grew by 45 percent between 2001 and 2006. In 2007, the
department will spend 59 percent more on special education programs
than it did in 2001.
Unfortunately, there's little reason to believe even these
dramatic funding increases will lead to improvements in student
learning in American schools. Since the early 1970s,
inflation-adjusted federal spending per pupil has doubled.
Over that period, student performance has not markedly improved,
according to the long-term National Assessment of Educational
Progress (NAEP), which is designed to measure historical
Under a Republican-controlled Congress, federal spending on
higher education has increased almost as dramatically as K-12
spending over the past six years. For example, annual
Department of Education spending on federal Pell Grants grew from
$8.7 billion in 2001 to $13 billion in 2006, nearly 50 percent
growth. The federal government spends considerably more on
higher education today than it did during the Clinton
administration. According to the College Board, federal
funding for higher education in 2004-2005 totaled $90 billion, a
real increase of 103 percent over ten years.
An increasing number of students receive federal subsidies for
higher education. For example, 5.3 million students received
federal Pell Grants in 2005, an increase of 44 percent over ten
years. In all, in 2006 more than 10 million Americans will
receive various federal subsidies for higher education.
Unfortunately, as with K-12 spending, there's little evidence
that federal spending on higher education is achieving its
objective. Quite simply, college tuition is becoming more
expensive each year. According to the College Board, the
total cost of tuition and fees at four-year private and public
colleges increased by 5.9 percent and 7.1 percent, respectively,
during the 2005-06 school year.
According to economist Richard Vedder, college tuition costs
increased by 295 percent between 1982 and 2003, a growth rate
higher than health care costs (195 percent), housing (84 percent),
and all items (83 percent). In his book, , Dr. Vedder
argues that increased federal spending on higher education has
contributed to rising tuition costs. In other words, federal
subsidies are not making higher education more affordable because
colleges and universities simply consume this additional source of
These are important lessons that policymakers and taxpayers
should keep in mind during the 110th Congress.
Calls for more funding for public schools and subsidies for college
tuition may be popular on the campaign trail, but simply increasing
federal funding for education is not the answer. If it were,
we should have seen better results by now.
Dan Lips is an Education
Analyst at the Heritage Foundation www.Heritage.org.