Higher Education: Resources and Finance

By Seymour E. Harris | Go to book overview

Chapter 23
FEDERAL AID TO HIGHER EDUCATION

INTRODUCTORY

The country is demanding a larger participation by the Federal government in the financing of higher education. Among the reasons is the difficult financial position of state and local governments: they increased their indebtedness by 300 per cent in the ten years ending 1959, or $33¾4 billion a year, and are spending a few billion dollars more each year. Their fear of competitive losses to other states makes them hesitate to raise taxes sufficiently to meet their increased demands. Secondly, the Federal government itself has the most productive forms of revenue. It obtains its major revenue through direct taxes based on ability to pay, while state and local governments raise only a small part of their revenues in this way, relying instead upon taxes that burden the low-income groups. Thirdly, the burden of higher education varies greatly among states. Because some states have per capita income three times as large as the poorest states and because the cost of higher education to states is five times larger (in relation to income) for some of the poorer states than for the richer ones,1 pressure for Federal equalization increases. Finally, competition with the Russians, and the cold war in general, have quickened interest in Federal leadership.

In 1957-58, according to a preliminary survey, of the total educational and general income of $3,762 million, the Federal government provided $16 million for veterans' education, $534 million for research, $84 million for land-grant colleges, and $89 million for other purposes, or $723 million in all; this was 19 per cent of the total. But it should be noted that this was not all genuine direct aid. Payments were made to veterans themselves, not to schools, for one thing; moreover, the money for research was often given specifically for those projects undertaken primarily at the instigation of the Federal government. Only a relatively small part was genuine aid, though some provisions of the National Defense Education Act of 1958 qualify as such.

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