Special Report

Universities Getting the Most Money from the Federal Government

The cost of a higher education — which can often help fund world-class research, academic instruction, and state-of-the-art athletic facilities — is infamously high in the United States. Tuition and fees at U.S. universities have increased substantially over the past decade. Largely because of financial aid and other benefits, however, the amount paid out of pocket by students has remained relatively stable over that time.

Many public universities in the United States rely heavily on private funding sources such as tuition payments and gains on endowment assets. Still, the federal government allocates billions of dollars each year to thousands of universities in the form of research and development grants and contracts, as well as financial aid to undergraduates through the Federal Pell Grant Program.

24/7 Wall St. reviewed federally funded research and development grants and Pell Grant disbursements for recipients of financial aid in 1,871 major universities. Johns Hopkins University received nearly $2 billion from the U.S. government in 2015, more than double second-place University of Washington. Yale University rounds out the top 20, receiving approximately $480 million in federal funds in 2015.

Click here to see the universities getting the most money from the federal government.

U.S. research universities spent a combined $68.8 billion on R&D in 2015. The universities on this list have among the largest R&D budgets in the country. Annual R&D expenditure for 10 of the 20 institutions exceeds $1 billion.

As is generally the case across major research universities, federal funds account for most of the R&D spending in all but three of the 20 universities on this list. The reliance on federal funding for university R&D is declining, however. The federal government funded 69% of university research budgets in 1972. By 2015, federally funded research comprised just 55% of total R&D spending, the lowest on record.

This decline is not due to reduced funding, but rather is the result of the expansion of nonfederal funding sources. R&D funding from businesses, nonprofits, and university coffers has increased at twice the rate of federal funding sources since 1972.

Research at top government-funded universities is heavily concentrated in life sciences and engineering fields. Within these fields, medicine is nearly always the largest recipient of research funds — and, as a consequence, federal research grants.

Funding from the U.S. Department of Health and Human Services comprised the largest share of federal grants of any federal agency in 16 of the 20 universities. The principal funding source of the remaining four institutions — Johns Hopkins University, Georgia Institute of Technology, Pennsylvania State University, and the Massachusetts Institute of Technology — is the Department of Defense.

In addition to research funding, Government funding also includes need-based grants to undergraduates awarded through the Federal Pell Grant Program. While across all universities Pell Grant aid totalled $30.6 billion in the 2014-15 school year — on par with the value of research grants — these funds are much more evenly distributed across U.S. universities. Financial aid is generally dwarfed by the size of the federal research grants at these 20 institutions.

To identify the universities receiving the most federal funding, 24/7 Wall St. reviewed the latest government data for 1,871 major universities. To determine total federal funds for each institution, we combined federal R&D funding for the 2015 fiscal year from the National Science Foundation, and Pell Grant disbursements for the 2014-15 school year from the U.S Department of Education.

Total R&D spending by each university, the academic departments receiving funds, and the sources of federal funds by federal agency also came from the NSF. University endowment data came from the National Association of College and University Business Officers and are for the 2016 fiscal year. Enrollment figures were gathered from the Integrated Postsecondary Education Data System of the National Center for Education Statistics and include all students as of Fall 2015.

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.