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409

CHAPTER 4

Federal Programs for Education and Related Activities

This chapter provides a summary of federal fundsfor education to help describe the magnitude of thefederal fiscal effort and give some indication of thescope and variety of the education programs. Data inthis chapter reflect outlays and obligations of federalagencies. These tabulations differ from federal re-ceipts reported in other chapters because of numer-ous variations in the data collection systems. Federaldollars are not necessarily spent by recipient institu-tions in the same year they are appropriated. Insome cases, institutions cannot identify the source offederal revenues because they flow through stateagencies. Some types of revenues, such as tuitionand fees, are reported as revenues from studentseven though they may be supported by federal stu-dent aid programs. Some institutions that receivefederal education funds are not included in regularsurveys conducted by the National Center for Edu-cation Statistics. Thus, the revenue data tabulated inthis chapter are not comparable with figures reportedin other chapters. Readers should be careful aboutcomparing data on obligations shown in some tableswith data on outlays and appropriations appearing inothers.Federal on-budget funding for education showedsizable growth between fiscal years (FYs) 1965 and2002, after adjustment for inflation. Particularly largeincreases occurred between 1965 and 1975. After aslight increase from 1975 to 1980, there was a sub-stantial decrease from 1980 to 1985 (16 percent).Thereafter, federal on-budget funding for educationgenerally increased, showing a rise of 79 percentfrom 1985 to 2002, after adjustment for inflation(table 363).During the 1965 to 1975 period, after adjustmentfor inflation, federal funds for elementary and sec-ondary education rose by 207 percent, postsec-ondary education by 259 percent, other education by141 percent, and research at educational institutionsby 6 percent. Between 1975 and 1980, federal fund-ing for elementary and secondary education in-creased by 2 percent and research by 15 percent,but postsecondary education decreased slightly by 2percent and other education decreased by 35 per-cent. After declining 21 percent between 1980 and1985, federal funding for elementary and secondaryeducation programs rose by 104 percent between1985 and 2002. Postsecondary education decreasedby 25 percent between 1980 and 1985 and then in-creased 32 percent between 1985 and 2002. Be-tween 1985 and 2002, other education rose by 90percent, and research rose by 87 percent, after adjustment for inflation (table 363).Off-budget support and nonfederal funds gen-erated by federal legislation showed an increase inreal dollars between FY 1980 and FY 2002 (281 per-cent), but there were significant fluctuations through-out the period. These amounts tend to fluctuate be-cause of changes in interest rates and program legis-lation which affect the number and volume of studentloans. Between FY 1990 and FY 2002, these samefunds showed an increase of 158 percent (table363).According to FY 2002 estimates, $46.3 billion orabout 43 percent of the $108.0 billion spent by thefederal government on education came from the U.S.Department of Education. Large amounts of moneyalso came from the U.S. Department of Health andHuman Services ($22.9 billion), the U.S. Departmentof Agriculture ($11.9 billion), the U.S. Department ofLabor ($6.4 billion), the U.S. Department of Defense($4.7 billion), and the U.S. Department of Energy($3.6 billion) (table 364).Fiscal year 2002 estimates call for federal programfunds for elementary and secondary education to be$53.3 billion; for postsecondary education, $22.8 bil-lion; for research at universities and related institu-tions, $25.7 billion; and for other programs, $6.2 bil-lion (table 365).Almost 60 percent of total federal education sup-port, excluding estimated federal tax expenditures,went to educational institutions in FY 2002. Another19 percent was used for student support. Banks andother lending agencies received 7 percent, and mul-tiple recipients, including libraries, museums, andfederal institutions, received 13 percent (table 366).Between FYs 1990 and 2002, U.S. Department ofEducation obligations rose 67 percent, after adjust-ment for inflation. Funds for student financial assist-ance increased by $1.8 billion in 2002, a rise of 12percent since 1990. Funds for elementary and sec-ondary education were an estimated $21.2 billion in2002, an increase of 123 percent since 1990, afteradjustment for inflation. Funds for the disabled in-

410FEDERAL PROGRAMS FOR EDUCATION AND RELATED ACTIVITIES*The U.S. Department of Education as established in 1867 waslater known as the Office of Education. In 1980, under Public Law96–88, it became a cabinet-level department. Therefore, for pur-poses of consistency, it is referred to as the ‘‘U.S. Department ofEducation’’ even in those tables covering years when it was officiallythe Office of Education.

creased by 153 percent, to $11.7 billion, and fundsfor vocational and adult education increased 28 per-cent, after adjustment for inflation (table 367).Of the $46.3 billion spent by the U.S. Departmentof Education in FY 2002, about $19.7 billion went toschool districts, $8.3 billion to college students, $8.7billion to postseondary institutions, and $5.0 billion tostate education agencies (table 368).

Federal Education Legislation

A capsule view of the history of federal educationactivities is provided in the following list of selectedlegislation:

1787

Northwest Ordinance

authorized land grants forthe establishment of educational institutions.

1802

An Act Fixing the Military Peace Establishment of the United States

established the U.S. Mili-tary Academy. (The U.S. Naval Academy wasestablished in 1845 by the Secretary of theNavy.)

1862

First Morrill Act

authorized public land grants tothe states for the establishment and mainte-nance of agricultural and mechanical col-leges.

1867

Department of Education Act

authorized the es-tablishment of the U.S. Department of Edu-cation.*

1876

Appropriation Act,

U.S. Department of theTreasury, established the U.S. Coast GuardAcademy.

1890

Second Morrill Act

provided for money grantsfor support of instruction in the agriculturaland mechanical colleges.

1911

State Marine School Act

authorized federalfunds to be used for the benefit of any nau-tical school in any of 11 specified state sea-port cities.

1917

Smith-Hughes Act

provided for grants to statesfor support of vocational education.

1918

Vocational Rehabilitation Act

provided forgrants for rehabilitation through training ofWorld War I veterans.

1919

An Act to Provide for Further Educational Fa- cilities

authorized the sale by the federal gov-ernment of surplus machine tools to edu-cational institutions at 15 percent of acquisi-tion cost.

1920

Smith-Bankhead Act

authorized grants tostates for vocational rehabilitation programs.

1935

Bankhead-Jones Act

(Public Law 74–182) au-thorized grants to states for agricultural ex-periment stations.

Agricultural Adjustment Act

(Public Law 74– 320) authorized 30 percent of the annual cus-toms receipts to be used to encourage theexportation and domestic consumption of ag-ricultural commodities. Commodities pur-chased under this authorization began to beused in school lunch programs in 1936. TheNational School Lunch Act of 1946 continuedand expanded this assistance.

1936

An Act to Further the Development and Mainte- nance of an Adequate and Well-Balanced American Merchant Marine

(Public Law 74– 415) established the U.S. Merchant MarineAcademy.

1937

National Cancer Institute Act

established thePublic Health Service fellowship program.

1941

Amendment to Lanham Act of 1940

authorizedfederal aid for construction, maintenance, andoperation of schools in federally impactedareas. Such assistance was continued underPublic Law 815 and Public Law 874, 81stCongress, in 1950.

1943

Vocational Rehabilitation Act

(Public Law 78– 16) provided assistance to disabled veterans.

School Lunch Indemnity Plan

(Public Law 78– 129) provided funds for local lunch food pur-chases.

1944

Servicemen’s Readjustment Act

(Public Law78–346) known as the GI Bill, provided as-sistance for the education of veterans.

Surplus Property Act

(Public Law 78–457) au-thorized transfer of surplus property to edu-cational institutions.

1946

National School Lunch Act

(Public Law 79– 396) authorized assistance through grants-in-aid and other means to states to assist inproviding adequate foods and facilities for theestablishment, maintenance, operation, andexpansion of nonprofit school lunch pro-grams.

George-Barden Act

(Public Law 80–402) ex-panded federal support of vocational edu-cation.

1948

United States Information and Educational Ex- change Act

(Public Law 80–402) provided forthe interchange of persons, knowledge, and

411FEDERAL PROGRAMS FOR EDUCATION AND RELATED ACTIVITIES

skills between the United States and othercountries.

1949

Federal Property and Administrative Services Act

(Public Law 81–152) provided for dona-tion of surplus property to educational institu-tions and for other public purposes.

1950

Financial Assistance for Local Educational Agencies Affected by Federal Activities

(Pub-lic Law 81–815 and Public Law 81–874) pro-vided assistance for construction (Public Law815) and operation (Public Law 874) ofschools in federally affected areas.

Housing Act

(Public Law 81–475) authorizedloans for construction of college housing fa-cilities.

1954

An Act for the Establishment of the United States Air Force Academy and Other Pur- poses

(Public Law 83–325) established theU.S. Air Force Academy.

Educational Research Act

(Public Law 83–531)authorized cooperative arrangements withuniversities, colleges, and state educationalagencies for educational research.

School Milk Program Act

(Public Law 83–597)provided funds for purchase of milk for schoollunch programs.

1956

Library Services Act

(Public Law 84–597) pro-vided grants to states for extension and im-provement of rural public library services.

1957

Practical Nurse Training Act

(Public Law 84– 911) provided grants to states for practicalnurse training.

1958

National Defense Education Act

(Public Law85–864) provided assistance to state andlocal school systems for strengthening in-struction in science, mathematics, modernforeign languages, and other critical subjects;improvement of state statistical services;guidance, counseling, and testing servicesand training institutes; higher education stu-dent loans and fellowships; foreign languagestudy and training provided by colleges anduniversities; experimentation and dissemina-tion of information on more effective utiliza-tion of television, motion pictures, and relatedmedia for educational purposes; and voca-tional education for technical occupationsnecessary to the national defense.

Education of Mentally Retarded Children Act

(Public Law 85–926) authorized federal as-sistance for training teachers of the handi-capped.

Captioned Films for the Deaf Act

(Public Law85–905) authorized a loan service of cap-tioned films for the deaf.

1961

Area Redevelopment Act

(Public Law 87–27)included provisions for training or retraining ofpersons in redevelopment areas.

1962

Manpower Development and Training Act

(Pub-lic Law 87–415) provided training in new andimproved skills for the unemployed and un-deremployed.

Migration and Refugee Assistance Act of 1962

(Public Law 87–510) authorized loans, ad-vances, and grants for education and trainingof refugees.

1963

Health Professions Educational Assistance Act of 1963

(Public Law 88–129) provided fundsto expand teaching facilities and for loans tostudents in the health professions.

Vocational Education Act of 1963

(Part of Pub-lic Law 88–210) increased federal support ofvocational education schools; vocationalwork-study programs; and research, training,and demonstrations in vocational education.

Higher Education Facilities Act of 1963

(PublicLaw 88–204) authorized grants and loans forclassrooms, libraries, and laboratories in pub-lic community colleges and technical insti-tutes, as well as undergraduate and graduatefacilities in other institutions of higher edu-cation.

1964

Civil Rights Act of 1964

(Public Law 88–352)authorized the Commissioner of Education toarrange for support for institutions of highereducation and school districts to provide in-service programs for assisting instructionalstaff in dealing with problems caused by de-segregation.

Economic Opportunity Act of 1964

(Public Law88–452) authorized grants for college work-study programs for students from low-incomefamilies; established a Job Corps programand authorized support for work-training pro-grams to provide education and vocationaltraining and work experience opportunities inwelfare programs; authorized support of edu-cation and training activities and of commu-nity action programs, including Head Start,Follow Through, and Upward Bound; and au-thorized the establishment of Volunteers inService to America (VISTA).

1965

Elementary and Secondary Education Act of 1965

(Public Law 89–10) authorized grantsfor elementary and secondary school pro-