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US Education Spending History from 1900

In 1902 governments in the United States spent one percent of GDP on education programs. In the early 21st century, governments spend about six percent of GDP on education programs.

A Century of Education Spending

Education spending increased rapidly during most of the 20th century.

Chart 2.51: Education Spending in 20th Century

Education Spending started out at the beginning of the 20th century at one percent of Gross Domestic Product (GDP). It increased rapidly during the first three decades, reaching a peak of 4 percent of GDP in the depths of the Great Depression, but then steadying at 3 percent till the advent of World War II.

During World War II, education expenditures declined to 1.25 percent of GDP in 1944, and then recovered after the war to over 3 percent of GDP before declining in the early 1950s.

In the mid 1950s education spending began a rapid increase, from a low of 2.6 percent in 1953. Education spending peaked at 5.7 percent in 1976 before declining for the next decade to 4.7 percent of GDP in 1984.

In the mid 1980s education spending began to increase again. It flatlined at about 5.3 percent of GDP in the 1990s, but resumed its growth in the 2000s, reaching 6.1 percent in 2010 before declining a little in the aftermath of the Great Recession.

Education Spending by Government Level

Education started out as a program of local governments.

Chart 2.52: Education Spending by Government Level

Local education spending: Education spending has always been dominated by local government. Local government spending started at about one percent of GDP at the start of the 20th century and then steadily expanded, with departures caused by the Great Depression and World War II, peaking at 3.8 percent of GDP in 1975.

Chart Key:
- Local direct spending
- State direct spending
- Federal direct spending
- Transfer to state and local

From the mid 1970s to the mid 1980s education spending at the local level declined to about 3.2 percent of GDP by the mid 1980s. Then local education began a steady rise, breaching 4 percent of GDP by 2002 and cresting at about 4.3 percent of GDP by 2009. In the first half of the 2010s, local education spending declined to an estimated 3.1 percent GDP in 2015.

State education spending: Education spending at the state level was minimal at the start of the 20th century, but grew to 0.2 percent of GDP by the mid 1920s. In the 1930s state education spending increased to about 0.4 percent of GDP before shrinking during World War II.

After World War II state education increased and stabilized at about 0.4 percent of GDP in the 1950s. In the late 1950s state education began a surge that ended at 1.4 percent of GDP in 1976. State education spending declined to 1.2 percent of GDP in 1984 and then began a slow increase, reaching 1.5 percent of GDP in the late 2000s, and jumping to 1.7 percent GDP in the post-recession year of 2010.

In the first half of the 2010s state education spending declined, down to an estimated 1.58 percent GDP in 2015.

Federal education spending: The federal government had little involvement in education in the early 20th century. This changed in the 1930s when federal education spending increased from less than 0.05 percent of GDP to over 0.3 percent of GDP. Federal education spending decreased during World War II but then increased to a peak of 1.03 percent of GDP in 1949 as it funded education for veterans in the GI Bill. Federal education spending declined in the 1950s to 0.3 percent of GDP, but began an increase in the mid 1960s reaching a peak of 1.2 percent of GDP in 1979. Thereafter federal education spending declined to about 0.6 to 0.7 percent of GDP in the 1980s and 1990s before increasing modestly to nearly 0.8 percent of GDP in the 2000s.

In the early 2010s federal education spending declined to 0.6 percent in 2014, and is expected to recover to 0.68 percent GDP by 2020.

Education Spending by Education Type

At the start of the 20th Century, education spending was almost exclusively for K-12 education.

Chart 2.53: 20th Century Education Spending by Type

Government education spending in the first half of the 20th century was almost exclusively for childhood education, K thru 12. In 1950, spending was 2 percent on K-12 and 0.37 percent of GDP on higher education. But then the higher education share began to grow. At the peak of education spending in the 1970s, K-12 spending was 3.9 percent of GDP and higher education was 1.44 percent of GDP. Thus K-12 spending had doubled as a percent of GDP and higher education spending had just about quadrupled in 25 years.

Since the 1970s higher education has increased its share a little. K-12 education spending ended up at about 4 percent in the 2000s and higher education spending rose to 1.6 to 1.7 percent of GDP.

In the Great Recession K-12 education popped up to 4.4 percent GDP before declining below 3.8 percent GDP in 2012. Further declines are expected in the remainder of the decade. Higher education spending is expected to increase to 1.84 percent GDP by 2015 and decline to 1.7 percent GDP by 2020.

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Spending Data Sources

Spending data is from official government sources.

Gross Domestic Product data comes from US Bureau of Economic Analysis and

Detailed table of spending data sources here.

Federal spending data begins in 1792.

State and local spending data begins in 1890.

State and local spending data for individual states begins in 1957.

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Next Data Update

> State Finances FY13

> data update schedule.

Data Source

Source: CBO Long-Term Budget Outlook .

> data sources for other years
> data update schedule.

Federal Deficit and Outlay Actuals for FY15

On October 15, 2015, the US Treasury reported in its Monthly Treasury Statement (and xls) for September that the federal deficit for FY15 ending September 30 was $439 billion. Here are the numbers, including total receipts, total outlays, and deficit compared with the numbers projected in the FY 16 federal budget published in February 2015:

Federal Finances
FY15 Outcomes
Receipts $3,176$3,249
Deficit$583$439 now shows the new numbers for total FY15 outlays and receipts on its Estimate vs. Actual page.

The Monthly Treasury Statement includes ""Table 4: Receipts of the United States Government, September 2015 and Other Periods." This table of receipts by source is used for to post federal receipt actuals for FY2015.

The Monthly Treasury Statement includes "Table 9. Summary of Receipts by Source, and Outlays by Function of the U.S. Government, September 2015 and Other Periods".   This table of outlays by function makes it possible for to estimate actual outlays by "subfunction" for FY2015 by factoring budgeted amounts by the difference between budgeted and actual "function" amounts where actual outlays by subfunction cannot be gleaned from the Monthly Treasury Statement.

Final detailed FY2015 numbers will not appear until the FY2016 federal budget is published in February 2015 with the actual outlays for FY15 in Historical Table 3.2--Outlays by Function and Subfunction.

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