The Bipartisan Policy Center, working with the National Center for Higher Education Management Systems (NCHEMS), has created a dynamic model to evaluate and inform its flexible higher education block grant proposal to improve affordability and ensure stable funding during economic downturns. Based on this modeling, the tool below allows users to adjust various parameters of a proposed system of flexible federal block grants to states.
Rainy Day Fund (RDF) Calculator
California currently spends about $16,322.5 annually on higher education.
RDF Calculated Maximum
Time to Fill RDF
- New Federal Block Grant Funding for RDFs and Affordability: The user can specify the size of the annual maximum federal investment in flexible block grants (ranging from $1 billion to $10 billion).
- Federal Dollars Received Per Dollar of New State Spending: The user can adjust the ratio of the match provided by the federal government on any new state spending (ranging from $0.50 on the dollar to $8 on the dollar).
- Goal Size of State RDF: The user can set the target size of the RDFs to a percentage of the highest recent annual state spending on higher education (ranging from 10% to 30%). Higher targets will take longer to reach but will provide more cushion in an economic downturn.
- Rate of Return on RDF: The user can specify the estimated rate of return on investments held by the RDFs (ranging from 4% to 8%). Assuming greater investment returns reduces the amount of time required to fill the RDFs.
- Federal Contribution to RDF: The user can adjust the percentage of the federal funds that are directed to fill the RDFs.
- State Contribution to RDF: As above for the federal contribution, the user can adjust the percentage of new state funds that are directed to fill the RDFs.
Check out the full technical explainer here.
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