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Federal budget · FY2024

Where does federal education spending go?

$305 billionin FY2024 · 4.5% of all federal spending

Education, Training, Employment, and Social Services totals about $305 billion in FY2024. The single largest line is the federal government's accounting cost of the $1.6 trillion Direct Student Loan portfolio — subsidies, income-driven repayment plan losses, forgiveness and discharge programs, plus accounting reestimates. Important: this is the program's net federal cost, not cash paid directly to borrowers in FY2024. The line varies dramatically year-to-year based on policy changes and reestimates.

Pell Grants (~$35B) pay direct need-based grants to about 7 million undergraduates per year. Title I (~$18B) and IDEA Special Education (~$15B) flow federal K-12 funding to state education departments, which then pass it to local school districts. Head Start (~$13B) funds about 1,600 local agencies running preschool for low-income kids ages 0-5.

On the contracting side, the federal student loan servicing program pays Nelnet, MOHELA, EdFinancial, Aidvantage, and ECMC roughly $1.5B per year combined to collect payments and answer borrower calls for the Direct Loan portfolio. Maximus took over the Default Resolution Group and processes Public Service Loan Forgiveness applications.

Where the money goes inside education, training, employment, and social services

Agency- and program-level breakdown for FY2024.

  • ED — Student Loan Programs (net subsidy + adjustments)$145 billion

    Direct loan program subsidies + reestimates. The dominant line; varies dramatically year to year based on policy changes and reestimates.

  • ED — Pell Grants$35 billion

    Need-based undergraduate grants. ~7M students per year, max ~$7,395.

  • ED — Title I (low-income K-12 schools)$18 billion

    Largest federal K-12 program: supplemental funds to high-poverty schools.

  • ED — IDEA (Special Education)$15 billion

    Grants to states to support special education services under the IDEA Act.

  • HHS Head Start$13 billion

    Preschool + early childhood programs for low-income kids (ages 0-5).

  • DoL Employment & Training Administration$11 billion

    Workforce Innovation & Opportunity Act, dislocated worker programs, apprenticeships.

  • Other Education (impact aid, school choice, tribal)$30 billion

    Federal land K-12 impact aid, charter school grants, BIE schools, education research (IES).

  • Other social services (LIHEAP, Older Americans Act, ACF)$38 billion

    Energy bill help for low-income households, Meals on Wheels, child welfare, refugee resettlement.

Top recipients — who actually got the money

Largest contractors, grantees, and direct payees within education, training, employment, and social services. The remainder covers personnel, facilities, and the long tail of smaller recipients.

  • Student loan portfolio accounting cost$140 billion

    Estimated federal cost of the $1.6T Direct Loan portfolio — Direct Loan subsidies, income-driven repayment plan losses, forgiveness/discharge programs, and accounting reestimates. This is the federal government's accounting cost of the loan program, NOT $140B in cash paid directly to borrowers in FY2024. The single dominant line in this function; varies dramatically year-to-year based on policy changes and reestimates.

  • Pell Grant student recipients$35 billion

    Direct need-based grants to ~7M undergraduates per year. Max ~$7,395. Paid to schools on the student's behalf; no school can charge more than the certified award.

  • State governments (Title I + IDEA + workforce passthroughs)$35 billion

    Federal K-12 funding flows to state education departments and then to local school districts. IDEA Special Education + Title I (high-poverty schools) are the two largest streams.

  • Head Start grantees (~1,600 local agencies)$13 billion

    Federally-funded local nonprofits and school districts running preschool programs for low-income children ages 0-5.

  • State Unemployment Insurance + workforce offices$8 billion

    Department of Labor Employment & Training grants flow to state UI agencies and American Job Centers under the Workforce Innovation and Opportunity Act (WIOA).

  • Universities (work-study, TRIO, GEAR UP, TEACH)$5 billion

    Federal student aid programs paid directly to colleges — work-study payroll, TRIO for first-generation students, GEAR UP college-prep, TEACH service grants.

  • LIHEAP grantees (state energy-assistance offices)$5 billion

    Low-Income Home Energy Assistance Program — federal block grant to states + tribes to help low-income households pay heating and cooling bills.

  • Nelnet, MOHELA, EdFinancial, Aidvantage, ECMC (loan servicers)$1.5 billion

    Federal contractors who collect payments and answer borrower calls for the Direct Loan portfolio. MOHELA also runs Public Service Loan Forgiveness. ~$1.5B total in servicing fees.

  • Maximus (loan servicing + PSLF processing)$500 million

    Took over the Default Resolution Group portfolio in 2023; processes Public Service Loan Forgiveness applications.

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