Federal Support for Students Pursuing Higher Education in 2016
By Crystal Green
A recent report by the Congressional Budget Office (CBO) examined the distribution of direct federal financial support provided to postsecondary students in 2016, by family income.
Among the report’s findings:
- The federal government provided students pursuing higher education with approximately $91 billion in 2016.
- Spending programs for higher education totaled $54 billion.
- Spending included $28 billion on the Federal Pell Grant Program,$14 billion on the Federal Direct Loan Program $12 billion on education benefits for current service members and veterans.
- Tax expenditures for higher education totaled $37 billion.*
- The largest tax expenditures were the American Opportunity Tax Credit and Lifetime Learning Credit. Together they accounted for $19 billion of the total.
- Federal financial assistance covered nearly one-third of the cost of attendance for students from households in the lowest-income quintile and less than 10 percent for students from households in the highest-income quintile
- The Pell Grant and Federal Supplemental Educational Opportunity Grants (FSEOG) covered 16 percent of the cost of attendance for households in the lowest-income group and 1 percent for households in the highest-income group.
- Households in the lowest two quintiles of the population received more than 50 percent of the overall education benefits while households in the highest two quintiles received approximately 30 percent.
- Benefits paid through spending programs were more concentrated among lower-income households than higher-income households.
- In contrast, the largest share of tax benefits accrued to households in the three middle-income quintiles.
*The tax expenditure for the deduction for charitable contributions to educational institutions, and the exclusion of interest on certain state and local qualified private activity bonds were not included in this analysis.
