Intergovernmental Grants are special because they are only used for education. These grants are provided by the federal government so state and local governments can help fund their schools. Some grants that are available are categorical, matching, general revenue sharing and general aid to education. That is the definition of an intergovernmental grant.
The effect of intergovernmental grants is harder to understand. The main reason is because only about 8% of spending comes from the Federal Government. The rest is left to states and local governments. This is a power the Constitution has left for States to preside over. So in the end, intergovernmental grants are just a small leak that can help or hinder K-12 education.
President Obama recently revealed a plan based on Tennessee’s program that guarantee’s two years free at any community college as long as the student maintains a 2.5 GPA. This would involve intergovernmental grants to all 50 states, allowing for students to continue their education pass high school to get an Associates’’ Degree at the college of their choosing. The government would cover 75% of the cost of college and states would cover the rest. Many people see this as simply a convenient way for the government to make college free. I see it as a way to increase the human capital that is so desperately needed in this knowledge based economy. No we don’t need more history and philosophy majors but becoming a plumber takes more know-how today than it did 50 years ago. Many of the technology and tools take theory to understand how to use them correctly. I don’t think that the President is going about this the right way. Call a spade a spade and advocate for free education because that is one of the few ways that people can move up in today’s society.
Amount spent per student per year (not adjusted for cost of living)
Tsang, Mun, and Henry M. Levin. "The impact of intergovernmental grants on educational expenditure." Review of Educational Research 53.3 (1983): 329-367.