Are US Colleges More or Less Dependent on Federal Money After 2008 Financial Crises?

In the past a couple of weeks, the American public was so caught up with the college ranking following the announcement of US NEWS and other similar studies from different organizations.  For a while the public forget about the country $1.3 trillion student loans issues.  Analyzing data made available by the NCES, AAEA looks from different angles on the so-called Top Ten US Universities.  The Association compares net tuition revenue after institutional grant aids and the institution respective total general & education expenses.  For detailed of the variable used in this study, please see footnotes on each figure.  Higher Federal Government Dependency Rate (FGDR) reflects the respective institutions are less independent on the government support.  The graphs below show except for Cal-Tech, it is truly amazing to see that most of these schools’ FGDR deteriorated over time (please click the graph for a larger view).  However, after the 2008, one can see FGRD has increased which could be interpreted as that US colleges are less dependent on federal government financial support which could be caused by less funding availability from the government aids or due to tightening up of federal aids requirements such as SAP.  But dependent more on contributions received from non-government sources such as alumni and other donors.  Decreasing in funding received from private donors was offset by rising the tuition in order for them to operate at the previous year’s level.  This analysis could be one of the many possible explanations why the elite schools such as Harvard launched a capital campaign in September 2013.  Perhaps, this in one of the reasons why after 2008 financial crises, the amount of student loans increased at their fastest rate.

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