Public Education Financing Essay

Custom Student Mr. Teacher ENG 1001-04 15 February 2017

Public Education Financing


The main purpose of this paper is to provide a study on how public educational financing is done in the US.  Its current status, what are the common sources of funds that the US government is getting in order to provide an effective support for the students and their families.  It will also provide readers as to how really educational assistance can be applied in the US setting.


  How many time did we heard about the news about poverty, unemployment and even problem regarding security in the country or in the world or issues in the business which are over emphasized nowadays.  Actually all of these are inter-elated to the problem of education.  In most political studies, it was said that education is one of the main barometer of a country’s progress, which is definitely true.  You can name some emerging markets and highly prioritized education countries that put their economic growth on a higher level.

Like for instance, India and Korea, their main success was actually not about the many investment they have started or the ever friendly relationship that the country have prioritized over the years just to invite foreign investment in the country.  But, what these countries did, as how Japan did decades in the past, is to enrich their educational system.  An educational system that is being the main priority and everything follows.

 Just like in Korea, specifically South Korea, what the government done, is to send all their top scholar abroad with government financing their studies, like in best universities in Europe and in the US, what they have studied and patiently done by also their own way as well like tremendous research and knowledge on the latest trend either in technology, business and management.  These altogether has come up into something what Korea has been so proud of, and the is inventing and producing their own world class products, from the simple gadgets, like cell phones, appliances, like TV and even up to ergonomically designed cars, which are now greatly accepted in the global market.

For India, it is more on targeting what they can have as strength, the effective way of the government fully supporting their own people by not allowing most of the top notch University Graduate to easily earn their degree without any post certification has been a standard across most of its known University.  Take for instance in IT where most graduates are required to take certification programs has made their graduates highly competitive against their neighboring countries, not only that their labor cost is also not that high, since the cost of living in the country is also well controlled by the government.

            For both of this countries is all brought out by effective and efficient prioritization done by the government and to really focus on improving their educational system as well as controlling foreign interference and always look at the local standard of life, like in India which helps their graduates to be competitive since the cost of living is not that raising too much.

            In education, there are two main category, private educational system and public.  For the latter which is the main focus of this research has been always challenge on how it can deliver effective and well allocated financial support for its people.  Actually, this paper’s main objective is to provide a presentation as well as critical analysis on the current public school of the US, most especially in the financing side.  And from the findings, provide at least some meaningful suggestion as to how it can improve the process, in order to greatly improve the service it gives for the people, most especially the deserving families in the US.

Finance Program in the US

            In the United States, Public education financing continued to be a very hard task to do.  This is for the reason that there are so many states in the country and each of the state has a different needs, factors that affects the better management of its finance system includes, cultural aspect, like as it is common, US has been a country of many nationalities and it has been common fact and this becomes a true big attention to look at since different culture m9ight have different needs, secondly, there are also issues in the current status of each state, like in terms of its domestic product, other state has a better economic performance and this can easily help in the implementation of public school financing for that certain state, but however for others that are purely depending on financial aid which may come from private or public sources are always a challenge to evaluate and probably improves the local process in order to achieve better financial system for that state.  In other words, even the government have establishes a country wide policies, there are still times which is mostly, that these policies need to be change a little in order to address the exact needs of the state.  (Public School Finance Program of the United States and Canada, n.d.).

            It is true that the US government has provided a lot of attention in supporting families to overcome the ever increasing cost of education.  Just like in most European countries where there tax automatically works in their educational system.  In the US it does not actually works exactly like that, what happen is that for the public educational system, it provides these sources usually through Federal Government.

            The very basic requirement are the following, first, there is a financial need, where the income of the family have shown that the incapacity to send their children in school is relatively present.  Second, is that there is an education requirement, meaning the child has shown great interest in pursuing education, and lastly, is to apply and comply for legal requirements.  There are also different types of student Aid that the student might apply, depending upon on the appropriateness of the need, which the public educational agency can help in attaining the request, (1) Grants, (2) Work Study and (3) Loans.

            Grants, is the support that provide by the US government for deserving students which families does not really have the capacity to send their children to school.  The family will just present to the agency the required documents that show that their income is not enough to send their children to school.  For the second type, Work Study is allowing students to work part-time in order for them to finance their studies.

  This is one of the common and applied system that the government gives to young adults that is not only teaching them how to live their life in a mature way but also finding it more importance I their study as well, since they work to study and the every dollar that they earn is shown to be very important for them.  Lastly, for Loans, these are borrowed amount of money by the student that needs to be repaid.  This is also allowed or be given to families that shown no capacity to let their children to go to school.  The local federal agencies are also helping these students to be approved in this application.  This can also be done in terms or depending on the agreed payment scheme.  (The Guide to federal Student Aid 2007-2008, n.d).

Revenue sources for State Funds

            The following figures and table have shown that most of the source of revenue that supports the public education in the US, comes from the state resources, where it also a true showing that the country’s income were also come from the state as well.  Then it followed by the income from the local property taxes, then other sources of earnings from the state and lastly is from the federal sources, which is expected to be low because it does not actually expect much earning from them.  (See Figure 1 and 2).

NOTE: Current expenditures include instruction, instruction-related, support services, and other elementary/secondary current expenditures, but exclude expenditures on capital outlay, other programs, and interest on long-term debt.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), “National Public Education Financial Survey (NPEFS),” fiscal year 2005, Version 1a.

Figure 1

Current per-pupil expenditures for public elementary and secondary education in the United States:  Fiscal year 2005

NOTE: Classification is based on the unrounded amount.
SOURCE: U.S. Department of Education, National Center for Education Statistics, Common Core of Data (CCD), “National Public Education Financial Survey (NPEFS),” fiscal year 2005, Version 1a.

Figure 2

Federal revenues as a percentage of total revenues for public elementary and secondary education in the United States:  Fiscal year 2005

            It only shows that the government can be guided by these graphs as to how they can prioritize each state.  In this graph it shows that most states in the rural or country side are the ones that need to be focus more, where the importance of support through financial aid are need to be look into, since one of the obvious reason is the capacity of family to send their children to school are always a question.

            Just to provide a  better look at the entire figures in terms of table just to have a better look at the need of each regions, and how much they need it, this is the presentation in table format.  (Graphs in Education Finance, n.d.). (See Table 1).

Region and revenue source 1990 1991 1992 1993 1994 1995 1996 1997
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Federal 4.6 4.6 5.1 5.4 5.3 4.7 5.0 4.9
State 40.2 40.5 39.5 38.8 38.4 39.0 38.7 38.6
Local property taxes 48.7 48.8 49.2 49.8 50.3 50.0 49.8 49.9
Other local sources 6.5 6.1 6.2 6.0 6.0 6.3 6.5 6.6
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Federal 5.4 5.5 5.9 6.1 6.0 5.9 5.7 5.7
State 39.6 39.4 37.9 38.5 39.0 45.8 46.7 46.8
Local property taxes 45.0 44.8 46.1 46.6 46.0 39.1 38.6 38.1
Other local sources 10.1 10.3 10.1 8.9 9.0 9.2 9.0 9.3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Federal 7.3 7.3 7.8 8.4 8.4 8.0 7.6 7.8
State 49.1 49.5 48.5 48.0 48.0 48.1 49.0 48.9
Local property taxes 27.1 27.3 28.3 21.7 27.6 27.7 27.7 27.9
Other local sources 16.5 15.9 15.5 22.0 15.9 16.2 15.7 15.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Federal 6.8 7.0 7.3 7.7 8.2 8.5 8.1 7.7
State 60.6 60.4 60.7 59.0 55.7 54.9 56.3 58.4
Local property taxes 23.8 23.8 23.8 25.5 28.1 28.2 26.8 25.3
Other local sources 8.8 8.8 8.2 7.9 8.0 8.4 8.8 8.6
See notes at end of table.


Percentage distribution of total revenue for public elementary and secondary education in the United States, by region and revenue source: 1989–90 to 2002–05

Public School Revenue Changes in its Main Sources of Revenues

            It is very common as well that many changes in the public school revenue happen.  This can either brought out by economic changes through implementation of new policies or it can really come from the result of earnings from both the national and local level.  Since it is not only education is the priority of the US government and it needs to strike the balance between other priorities, like labor related requirements, infrastructure and other business and economic requirements which are also vital in the development or progress of the country.

            Just to show the exact school year spending per region in the US starting from 1990 to 2004, which would already gives the trend that the country might be using.  (See Figure 3).

Figure 3

            In this result the Midwest has experienced decrease because local funding has dropped by 55% percent of all revenue for public elementary and secondary education in 1989–90 to 44 percent in 2003–04. Declines in the proportion of property tax revenue accounted for most of this decrease. For the Northeast it also experienced a drop in the proportion of revenue from local sources. In both regions, there were increases in the proportion of total revenue from federal and state sources.

While in year ’03 and ‘04, as in earlier years, the Northeast has depended on a greater degree on property tax revenues than the other regions. The difference in the reliance on property tax revenues between the Northeast and the Midwest was greater in year 2003 and 2004 than in 89 and 90.  (Changes in Sources of Public School Revenue, n.d.).

The Impact of Energy Crisis has given Problem to US Public School Spending

            It as during the start of 1990, where US have experienced problems in well allocating funds for public schools and this continues to provide some big problems in the country.  It is only with the help of some private institution and agencies that lift the government obligations in addressing some of these issues.

            In many times the Federal Aid, through its loan, grants and work study benefits have given an extra assistance for the many students in the US.  And this has shown by the closed cooperation between the government and private firms, which makes everything possible.  Wit the continuous problem that are happening in the global economy, the immediate reaction of US government in controlling the cause by providing an extra effort of polishing the local and even sometimes if needed national policies also has provided big help in helping the public school financial assistance.

            The finding directly comes from examining the direct impact of energy increase on the US public school system and the results where:  On the average, school districts spent $137 per pupil on energy expenditures in fiscal year 00. For fiscal year 01, they budgeted an 11 percent increase, raising their budgets to $152 per pupil. However, actual fiscal years 01 per pupil energy expenditures, at $166 per pupil, were 22 percent higher than in fiscal year 00.

The average district experienced a 9 percent shortfall between what it had budgeted for fiscal year 01 and its actual expenditures. The average school district budgeted $176 per pupil for fiscal year 02 energy needs, or a 6 percent increase over what it actually spent in fiscal year 01. This $24 per pupil increase over fiscal year 01 budgeted costs translated into an increase of about $1 billion in expected costs.

But, as it was stated earlier there were a lot of efforts made by both the local and national government in addressing the issue, which has provided a good lift for the US public school financing agencies.  And all of this effort is by improving by the facilities, which has given the needed help and assistance.  Like, 39 percent locked in rates with one or more energy vendors, 29 percent participated in consortia that negotiated prices with third-party energy vendors, 12 percent instituted or increased fees to use facilities, and 7 percent closed schools or sent students home early for at least 1 day.

In the following fiscal year, it was continued 47 percent of the nation’s districts renovated or retrofitted existing facilities, 44 percent locked in rates, 33 percent participated in consortia, 15 percent instituted or increased fees to use facilities, and 6 percent closed schools or sent students home early for at least 1 day.

With this result the government has effectively and efficiently counter act the problem.  (Effects of Energy Needs and Expenditures on U.S. Public Schools, n.d.).

Estimation Standards Helps Improve Public School Expenditure

            The US government has also conducted great effort by allowing every state to formulate their own spending estimation, which gives better result since the local government has more accurate data and analysis over their need.  It was the standards are estimated using frontier regression techniques which adjust for the differential levels of efficiency of resource usage across different school districts.  This standard has help a lot for better and almost accurate estimation for the public school spending in each district or state.  (Dopuch, Nicholas & Gupta, Mahendra, n.d.).


            In this report it shows how United States has provided its best effort in addressing the issue of public school financing.  This shows that with the help of its earnings that comes from the state as well as other revenues that it generates; it helps public schools in its financial needs.  It also shows that the government has provided its best effort in providing every adjustment to help the agencies in addressing the issue, like in this case the government has effectively improve the energy renovation of most public schools.  But most importantly the importance of Federal Aid, which provides a wide variety of assistance to students who are in need of financial aid, such as grants, work study and loans, which have shown big support for public schools in particular.



“Changes in Sources of Public School Revenue.” Education Finance Statistics Center –

Institute of Education, US Department of Education. N.d

Dopuch, Nicholas & Gupta, Mahendra. (n.d.). “An Estimation of Standards for Public

School Expenditures.” Social Science Research Center. 

“Effects of Energy Needs and Expenditures on U.S. Public Schools.” Education Finance

“Graphs in Education Finance.” Education Finance Statistics Center – National Centre

for Educational Statistics – Institute of Education, US Department of Education.

“Public School Finance Act of 1994.” Colorado Department of Education.

“Public School Finance Program of the United States and Canada: 1998-1999.”

Education Finance Statistics Center – Institute of Education, US Department of Education. N.d, [Online] Available at:

“Revenue Source.” Oregon School Board Association. 

 Richard, Aronson & Schwartz, Eli. (2004), “Management Policies in Local Government

Finance.” USA: ICMA Publishing

“The Guide to Federal Student Aid 2007-08.” US Department of Education – Federal

Student Aid. N.d, [Online] Available at:

Thompson, David. (2007). “United States: Public School Finance.” Accounting and

Consultancy. 7 February 2007

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