How the Department of Education spent $268 billion last year

[Simone Del Rosario]

President Donald Trump signed an executive order Thursday to dismantle the Department of Education. Not only is the president critical of the state of education, but Republicans have tried for decades to get rid of the agency.

In this video, we’re going to look at how much money the Education Department gets in a year, where the money goes from there, and how its budget stacks up with other agencies. But first, a bit of history you’ll find interesting. Did you know this country has shut down the Department of Ed before?

This Department of Education has technically been around since 1980, but its origins date all the way back to 1867.

I’ll make it quick. President Andrew Johnson created the first Department of Education to collect information and stats about schools throughout the country. But because some worried it would have too much control over local schools (sound familiar?), they downgraded it to the Office of Education a year later.

Starting in the 1950s into the late 70s, countless factors contributed to the expansion of federal education funding. In October of ’79, Congress passed the Department of Education Organization Act, which consolidated several federal agencies. The Department of Education was officially reborn in 1980. Adjusting for inflation, the agency’s budget has gone up fivefold since that year.

So … What does it do today?

According to the Department of Education, its mission is “to promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access for students of all ages.”

And how are we doing? Taking the latest figures from the Program for International Student Assessment, the U.S. ranks 9th in reading, 16th in science and 24th in math.

Now to the money. In Fiscal Year 2024, the Department of Education spent $268 billion.

The agency’s budget accounts for 4% of overall federal spending. The Department of Health and Human Services is about a fourth of the total budget, mostly because of Medicare and Medicaid. The Social Security Administration makes up about 22%, while Treasury takes up nearly 20%. The Department of Defense comes in at 13%, Veterans Affairs at nearly 5%, and then we come to the Department of Education at its 4% mark.

So what do they do with more than a quarter of a trillion dollars in one year? While a lot of the criticism of the Department of Ed focuses on its influence on primary and secondary education, that’s actually not where most of the money goes.

Sixty percent of the budget goes straight to the Office of Federal Student Aid ($160.7 billion). That’s higher education and pays for things like Pell Grants ($34.7 billion), work study programs and loans.

I’ll note, the number of college students receiving federal aid has fallen 23% since 2017.

The next big chunk of the budget, about a quarter of it, gets transferred to states ($68.1 billion, 25%). We’ll dig into which states rely on this funding the most in just a minute.

Another $40 billion ($39.9 billion) goes to elementary and secondary education grants.

$18.8 billion was sent to schools with a large number of poor, neglected or “educationally disadvantaged” students.

$15.5 billion was spent on Special Education programs across the country.

And $5.5 billion went to general school improvement programs, like after-school programs and classroom technology.

President Trump says the decision to close the Department of Education is meant to “return education authority to the States, while continuing to ensure the effective and uninterrupted delivery of services, programs, and benefits on which Americans rely.”

The agency provided about 14% of funding for public schools in fiscal 2022, according to the most recent Census data. Not all of that comes from the Department of Ed, some of it supports school meals from the Department of Agriculture. But the majority is education funding.

So which states rely on this funding the most?

Here are the top 10 states with the largest share of school funding from federal sources, according to a Pew Research Center analysis. Mississippi tops the list at 23.3%, followed by South Dakota, Montana, and Alaska.
Among the 100 largest public school systems, Detroit gets nearly 50% (48.6%) of its funding from the federal government. Shelby County, Tennessee, which includes Memphis is next on the list at 28.5%.

As the president looks to dismantle the Department of Education, he’s targeting one of the least popular federal agencies. According to a Pew survey from last summer, 44% had a favorable outlook on the agency, while 45% viewed it unfavorably.

That might seem like a tight margin, but only the Department of Justice and IRS scored worse. Education fell behind the CIA and Federal Reserve! While nearly everyone loves the National Park Service. For SAN, I’m Simone Del Rosario.