Federal obligations for higher-ed S&E near an inflation-adjusted all-time high in 2023

In fiscal year (FY) 2023, federal obligations for science and engineering (S&E) to universities and colleges totaled $49 billion—$29 billion more than FY 2000, and a 10% increase from the prior year. The growth is less rapid when adjusted for inflation (2017 USD), with just over $40 billion in real obligations in FY 2023, a 5% increase over the year prior and $12.6 billion (or 46%) increase over the FY 2000 value. Each year, approximately 90% of these federal obligations for higher education S&E are allotted to R&D activities, directly supporting key innovation activities nationwide.

This article uses data from The Survey of Federal Science and Engineering Support to Universities, Colleges, and Nonprofit Institutions—the sole source of comprehensive, institutional-level data on federal science and engineering funding to academia and nonprofits—to provide breakdowns of federal obligations for S&E to universities and colleges at the national and state levels.

National overview of the data

When adjusted for inflation (in constant 2017 dollars), federal support reached its peak in FY 2009 at $40.3 billion, primarily due to the inclusion of stimulus spending under the American Recovery and Reinvestment Act (ARRA). Obligations remained elevated at $40.1 billion the following year before dropping down to as low as $31 billion in FY 2013. 

ARRA funding was designed to allow the federal government to maintain steady funding of R&D following the Great Recession in 2008, with most of the act’s support for R&D targeted toward universities and colleges. In 2009, universities and colleges received approximately 24% of all federal R&D obligations but 59% of ARRA obligations. Read more about the ARRA here.

Note that R&D has historically accounted for approximately 89% of the total federal obligations for S&E to universities and colleges. Hence the ARRA funds induced a large jump of 26% (24% inflation-adjusted) from FY 2008 to 2009. Refer to Figure 2 below for a more detailed breakdown of obligations.

Following the peak of FY 2009, real obligations first declined before experiencing consistent growth around FY 2015. After over a decade, in FY 2023, real obligations recovered to levels equal to those of FY 2009 at $40.1 billion, due in part to additional funding provided by supplemental COVID-19 pandemic-related appropriations from FYs 2020 and 2022.

The federal government is the largest source of higher education R&D expenditures, as seen in SSTI’s past coverage of Higher Education R&D (HERD) Survey data. However, this share has been shrinking despite increasing federal obligations. Over the past decades, there has been a distinct shift in the source of funds for HERD expenditures, with institutions and businesses making up larger shares, while federal, state, and local governments’ proportions have shrunk.

Refer to Figure 1 below for more detail on how obligations have changed since FY 2000, both in current and real dollars. 

Figure 1: Federal obligations of S&E to universities and colleges in billions of current and constant USD, FYs 2000-2023

Federal obligations for S&E to universities and colleges can be broken down into several types of activity: R&D; R&D plant; facilities and equipment for instruction in S&E; S&E fellowships, traineeships, and training grants; and other general support for S&E.[1]

The vast majority of the obligations have historically been for R&D, averaging 89% since FY 2000 and 92% in FY 2023. A breakdown of the types of activities, their values in thousands of current U.S. dollars, and a visual representation of their share of the total obligation amount is available in Figure 2 below.

Figure 2: Federal obligations for S&E to universities and colleges by type of activity, thousands of USD

State-level overview of the data

Breaking the data down by state, federal obligations for S&E to universities and colleges are unsurprisingly concentrated among larger states. Data at the state level is more limited, provided only as far back as FY 2015 and in current U.S. dollars.

In FY 2023, California universities and colleges had approximately $6.1 billion in obligations, or 12% of the annual total, followed by those in New York ($3.9 billion or 8%), Maryland and Texas (each $2.9 billion or 6%).

Since FY 2015, obligations have increased the most in Montana, with a 274% jump totaling approximately $300 million. Maine, Kansas, and Arkansas follow at 193% ($83 million), 159% ($281 million), and 120% ($100 million) respectively.

Figures 3 and 4 below showcases the data in two forms: Figure 3 is a map with five equal quintiles best for comparison of data between states for a given year; Figure 4 is a group of column charts, each with a different y-axis, best for quickly visualizing the relative year-over-year changes within a given state. 

Figure 3: State-level map of federal obligations for S&E to universities and colleges

Figure 4: State-level column charts of federal obligations for S&E to universities and colleges

This page was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.