US Education: Costs Skyrocketing, Some States Falling Behind

The cost of education in the United States has dramatically increased against general inflation rates during the period 2000-2014.  The consumer price index for education services increased 120 percent while overall inflation rose about 40 percent. Changes in recent months have only reinforced this trend. The consumer price index for education for the January-July period increased from 3.6 in 2014 to 3.8 percent in 2015, whereas the index for all consumer items was steady at -0.2 percent for the same period in 2014 and 2015. 

Turning to total expenditures, US federal government expenditures on education are about 5.2 percent of GDP, which is on par with other OECD economies and slightly higher than the world average. That said, the governments of several emerging countries, such as Bolivia, Brazil, and Ghana, outspend the OECD average.

Cross-country comparisons on total spending can, however, be misleading because of varying structures for educational finance by country. In some countries education is financed mainly by the central government, while in other economies the private sector absorbs a greater share of the costs. This discrepancy in financing structure is mirrored even at the state level within some countries. For example, in 2014, the US states of Indiana and Vermont each spent more than 30 percent of the overall state budget on elementary and secondary education. In contrast, Massachusetts, West Virginia, and Wyoming state governments dedicated only about 10 percent of the state budget to education. 

Sources: World Development Indicators (WDI), August 2015, US Budget Expenditure by States, 1998-2014, Prices, Annual, Monthly, Daily Series and Quarterly, August 2015

Expenditures & Costs          Literacy & Acheivement          Participation & Attainment