How is education funded in the United States?

Until fairly recently, the vast majority of funding for came from two sources: the students themselves, and State governments. As I’ve pointed out in previous posts, the last year or so has seen some desperate maneuvering by State legislatures to cut the higher education bill (see here and here, for example). But this has been going on for a decade and a half, with a real crescendo around the time of the global financial crisis. A new report from the Pell Trusts provides overwhelming evidence of a massive shift in funding from States to Federal government. Now, since most of this shift is in Pell grants — the major Federal support given to low-income students — perhaps this is no surprise, what with a major recession and all. However, what the recent battles have shown is that the trend towards Federal dependence is not reversing, and States are refusing to pick up the slack again in improving economic circumstances, but rather have taken advantage of Federal funding to permanently reduce their higher education budgets.

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