Federal support for adult basic education dates back to the Adult Education Act of 1966, which formed part of the Johnson Administration’s War on Poverty. The 1991 National Literacy Act expanded the scope and funding for federal adult education programs. Both laws were replaced in 1998 with passage of the Adult Education and Family Literacy Act (AEFLA), enacted in 1998 under Title II of the Workforce Investment Act (WIA). AEFLA is the primary federal funding source of adult education and finances states to provide adult basic education to individuals lacking high school credentials, or lacking the basic literacy and numeracy skills necessary for employment and self-sufficiency, including but not limited to proficiency in English. The inclusion of adult basic education funding in the Workforce Investment Act reflected a growing emphasis on linking literacy, education, and employment services.

Federal funds for adult education are distributed as formula grants to states that, in turn, fund local program providers. In 2013, Congress appropriated a sequestration-adjusted $575 million for adult education, five percent less than the $606 million appropriated in 2012.The funding formula is based on the number of adults over age 16 not enrolled in school and who have not completed high school. States are required to distribute at least 82.5 percent of the federal dollars to local providers through a competitive process based on state-established criteria. Providers include local educational agencies, community colleges, community-based organizations and correctional institutions with the large majority (78 percent) being local education agencies.

States are required to provide a 25 percent match (cash or in-kind) to receive their federal grant. To ensure continuity and avoid large fluctuations in state funding levels from year to year, AEFLA includes both a “hold harmless” provision specifying that states shall receive grants equal to at least 90 percent of the grant they received the previous fiscal year and a “maintenance of effort” provision that requires states to expend at least 90 percent of what it spent in the prior year on adult education activities to be eligible for the funds.

The federal government sets aside 1.5 percent for national leadership activities such as technical assistance, research, and demonstration projects. An additional 1.7 percent is set aside for incentive grants to states that surpass their negotiated performance targets in both Title I and Title II of WIA. Although incentive awards appear in the AEFLA budget, they are administered by the U.S. Department of Labor (DOL). The maximum incentive grant is $3 million, and the minimum is $750,000. States may set aside up to 12.5 percent of federal dollars for state leadership activities and up to 5 percent for administrative costs. National and state leadership funds and incentive grants have formed the basis of important innovations in the design and delivery of adult education programs.

While AEFLA is the primary source of federal funding for adult education, it makes up a relatively small proportion of overall spending on adult education programs. In fiscal year 2010, for example, total state and federal expenditures on adult education were just over $2.2 billion, of which federal expenditures amounted to a little more than a third. Over the past decade, both state and federal funding for adult education have declined. In contrast to funding for PreK-12 and higher education, in which federal funding has increased while states have pulled back, all sources of spending on adult education have declined. The declining funding comes in spite of evidence for considerable unmet demand for adult education services.

See also: Adult Education
Adult Education Accountability