Federal and State Funding of Higher Education: A Changing Landscape

Abstract

Policymakers across the nation face difficult decisions about higher education funding. Federal leaders, for example, are debating the future of the Pell Grant program. The Obama administration has proposed increasing the maximum Pell Grant award to keep pace with inflation in the coming years, while members of Congress have recommended freezing it at its current level. State policymakers, meanwhile, are deciding whether to restore funding after years of recession-driven cuts. Their actions on these and other critical issues will help determine whether the shift in spending that resulted in parity is temporary or a lasting reconfiguration.In a constrained fiscal environment, policymakers also will need to consider whether there are better means of achieving shared goals, including student access and support for research. Such approaches could entail more coordination, other funding mechanisms, or policy reforms. 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. This chartbook is intended to provide a starting point for answering such questions by illustrating the existing federal- state relationship in higher education funding, the way that relationship has evolved, and how it differs across states