Public education is at the heart of the American Dream. It is an essential step up the ladder of the promised economic prosperity. Despite the rise in tuition costs, many are still choosing to pursue postsecondary education through public school systems.
Higher spending on education correlates with higher economic outcomes for students. A study published in the Quarterly Journal of Economics revealed that “a 10% increase in per-pupil spending each year for all 12 years of public school leads to 0.31 more completed years of education, about 7% higher wages, and a 3.2 percentage point reduction in the annual incidence of adult poverty” (Jackson et al., 2016).
This article discusses relevant statistics on the education financing of the 50.694 million Americans who attend public school. It is hoped that policymakers, school administrators, and even teachers and students doing research on the current state of American education will find this guide a valuable resource.
Public Education Spending Statistics Table of Contents
- State Rankings for Public Education Expenditure per Pupil
- Expenditures of Public School Systems per Level of Institution
- Revenue Sources of Public Education in the U.S.
- Top 10 Largest Elementary-Secondary Public School System Finances
- Comparative Statistical Data
State Rankings for Public Education Expenditure per Pupil
In the fall of academic years 2017-2018, the United States spent an average of $14,891 per pupil enrolled in public elementary and secondary schools. Computed based on average daily attendance, per-pupil expenditure amounted to $15,946 (NCES, 2020). Moreover, the U.S. spent $38,709 per full-time-equivalent student of public degree-granting postsecondary institutions in the years 2018-2019.
New York is on top of the state rankings for public education spending with $24,040 allotted per pupil, which is $16,416 more than the amount spent in Utah, the state on the bottommost of the list.
District of Columbia received the most funding among all states and ranked second on expenditure per pupil. Connecticut is the 3rd on the list, having spent $20,635 per pupil. It is followed by New Jersey, Vermont, Alaska, Massachusetts, New Hampshire, Pennsylvania, and Wyoming.
Mississippi is the fifth to the bottom on the list, followed by Oklahoma, Idaho, and Arizona. Idaho received the least total funding and Utah ranked 51st on expenditure per pupil, which amounted to only $7,628.
Expenditures of Public School Systems per Level of Institution
How much is the government spending on different levels of educational institution? Below are key details on expenditure and revenue according to the most recent available data.
In 2019, 49% of 3-to-4-year-olds and 86% of 5-year-olds were already enrolled in school. However, to date, the U.S. government still has not presented any expenditure report on early childhood education.
Elementary and Secondary
According to the Report on the Condition of Education 2021, published by the National Center of Education Statistics (NCES), the total expenditure of the United States on elementary and secondary education for the fiscal years 2017-2018 amounted to $762 billion. This included:
- Current expenditures (87.1%);
- Capital outlay (9.2%); and
- Interests on school debt (2.6%).
The total revenue from these levels of institution amounted to $761 billion, $59 billion of which is from federal sources, $357 billion from state sources, and $345 billion from local sources.
Postsecondary and Beyond
Total expenditure and revenue for public postsecondary institutions amounted to $386,707,398 and $408,931,242 consecutively for fiscal year 2017-2018, and $401,128,627 and $415,887,527 for fiscal year 2018-2019 (NCES, 2021). As illustrated below, state governments provide the largest percentage of the revenue of public-degree granting institutions.
Source: U.S. Department of Education (2019)
Revenue Sources of Public Education in the U.S.
Public education in the U.S. is largely financed by state (46.8%) and local (45.3%) sources, while the remaining 7.8% is contributed by federal sources. Below is the list of specific sources of revenue per category for public schools.
- Title I of the Elementary and Secondary Education Act (ESEA) provides financial assistance to agencies and schools with a high percentage of pupils coming from low-income families.
- Child Nutrition “includes grants received under Child Nutrition Act programs (e.g. National School Lunch Act, School Breakfast Program, Special Milk Program, etc.)” (NCES, 2019).
- Individuals with Disabilities Education Act (IDEA) provides funding for free education of students ages 3-21 with disabilities.
- Impact Aid Program provides funding for federal property payments, basic support payments, children with disabilities payments, and construction grants.
- Bilingual Education Act provides funding for the needs of limited English speaking ability (LESA) students.
- Indian education
- Math, science, and professional development include “grants received under Title II, Parts A and B of the Elementary-Secondary Education Act (ESEA) as reauthorized by the Every Student Succeeds Act (ESSA)” (NCES, 2019).
- Safe and drug-free schools is “distributed under Title IV of ESEA as reauthorized by ESSA” (NCES, 2019).
- Vocational and technical schools include “grants authorized by the Carl D. Perkins Career and Technical Improvement Act, as well as other grants directly related to vocational education” (NCES, 2019).
- Other and unclassified, including “revenues from 21st Century Community Learning Center programs, federal grants for adult education, and other federal revenues through the state. Also includes federal revenues received through the state that were unreported within any of the program-specific categories in this table” (NCES, 2019).
- Special education programs include “revenues for the education of physically and mentally disabled students.”
- Compensatory and basic skills include “revenues from state compensatory education for ‘at risk’ or other economically disadvantaged students, including migratory children and orphans.”
- Bilingual education, gifted and talented, and vocational education programs
- Other, including “general formula assistance, staff improvement programs, school lunch programs, capital outlay and debt service programs, transportation programs, all other revenues from state sources, state payments on behalf of the local education agency, and unspecified state revenue” (NCES, 2019).
- Property tax and parent government contribution are “determined on the basis of independence or dependence of the local school system and are mutually exclusive” (NCES, 2019).
- Private sources include “tuition fees, transportation fees, textbook sales and rentals, school lunch revenues, district activity receipts, other student fees, and private contributions” (NCES, 2019).
- Other, including “rents and royalties, sales and services, interest earnings, and other local revenues” (NCES, 2019).
Public school systems across states vary in terms of the distribution of revenue sources. In 22 states, 50% or more came from state sources. Meanwhile, in 16 states 50% or more came from local sources.
Top 10 Largest Elementary-Secondary Public School System Finances
Five out of the 10 of the largest elementary-secondary public school systems come from Florida. This is based on enrollment data during fall 2014 reported to NCES on the Common Core of Data (CCD) agency. Below is the complete list of the top 10 schools with their total revenues and expenditures during the fiscal year 2015.
|Public School System||State||Enrollment
|New York City||New York||995,192
|Los Angeles Unites||California||646,683
|Palm Beach County||Florida||186,605
Here are some insights on the above data:
- New York City has the highest per-pupil spending on the list, amounting to $21,980.
- Clark County has the lowest per-pupil spending on the list, amounting to $8,254.
- Hillsborough County has the highest percentage of revenue from federal sources: 14.9%.
- Los Angeles United has the highest percentage of revenue from state sources: 62.4%.
- Houston has the highest percentage of revenue from local sources: 67.8%.
Source: U.S. Census Bureau
Comparative Statistical Data
It is important to benchmark education expenditure against key indicators such as GDP and taxpayer’s income to be able to assess it better.
Percentage of GDP Spent by the U.S. on Education
At the beginning of the 20th century, the percentage of GDP spent by the U.S. on education was only 1%. In 2017, that figure increased to 6.1%, higher than the average of the 35 member countries of the Organization for Economic Cooperation and Development (OECD), which amounted to only 4.9% of GDP.
The U.S. reported 3.6% of GDP spent on the elementary and secondary level and 2.6% on the postsecondary level. Overall, it ranked 6th on the list of OECD countries spending the highest percentage of GDP on education.
Percentage of Taxpayer’s Income Spent on Education by State
Alaska ranks 1st on state spending on education as a percentage of taxpayer’s income (5.6%). The bottommost on the list, District of Columbia, spends only 2% in this respect. Below is the detailed report per state.
Projected Financial Expenditure for Public School Systems
Total enrollment in public and secondary schools is expected to reach 51.419 million in Fall 2028. Per pupil current expenditure is projected to then be $13,800. This is equivalent to a 12% increase in expenditure from 2015-16 to 2028-29.
In 2028, NCES also projected that there will be 7% more American Indian/Alaskan Native students, 8% more Hispanic students, 20% more Asian/Pacific Islander students, and 51% more multiracial students in public elementary and secondary schools. This means that public education financing will affect more minorities in the future.
Ideally, quality education should be accessible to all American citizens and documented immigrants through public school systems. However, the increasing residential segregation, along with the fact that America is one of the three OECD countries that spend more on rich neighborhoods than on poor neighborhoods (The Economist, 2015) makes the American Dream harder to reach for people relying on public education.
- De Brey, C. Snyder, T.D., Zhang, A., and Dillow, S.A. (2021). Digest of Education Statistics 2019 (NCES 2021-009). National Center for Education Statistics, Institute of Education Sciences, U.S. Department of Education. Washington, DC. https://nces.ed.gov/programs/digest/
- Educational Finance Branch (2017). Public Education Finances: 2015. U.S. Census Bureau, Economics and Statistics Administration, U.S. Department of Commerce. Washington, DC. https://www.census.gov/library/publications/2017/econ/g15-aspef.html
- Hussar, W.J., and Bailey, T.M. (2020). Projections of Education Statistics to 2028 (NCES 2020-024). U.S. Department of Education, Washington, DC: National Center for Education Statistics. https://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2020024
- Irwin, V., Zhang, J., Wang, X., Hein, S., Wang, K., Roberts, A., York, C., Barmer, A., Bullock Mann, F., Dilig, R., and Parker, S. (2021). Report on the Condition of Education 2021. U.S. Department of Education. Washington, DC: National Center for Education Statistics. https://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2021144.
- Jackson, K., Johnson R., & Persico, C. (2015). The Effects of School Spending on Educational & Economic Outcomes: Evidence from School Finance Reforms. The Quarterly Journal of Economics 131(1), 157-218. https://gspp.berkeley.edu/faculty-and-impact/publications/the-effects-of-school-spending-on-educational-economic-outcomes-evidence-fr
- Revenues and Expenditures for Public Elementary and Secondary School Districts: FY 17 (2020). Institute of Education Sciences, National Center for Education Statistics, U.S. Department of Education. https://nces.ed.gov/pubs2020/2020303.pdf
- OECD (2020), Education at a Glance 2020: OECD Indicators. OECD Publishing, Paris. https://doi.org/10.1787/69096873-en.
- The Economist. (2015, January 22). America’s new aristocracy. https://www.economist.com/leaders/2015/01/22/americas-new-aristocracy
- US Government Education Spending History with Charts – a usgovernmentspending.com briefing. (n.d.). U.S. Government Spending. http://usgovernmentspending.com/education_spending
- U.S. Public Education Spending Statistics. (2021, April 22). EducationData. https://educationdata.org/public-education-spending-statistics