Although the American government has invested more and more in primary and secondary education, it has not brought about the improvement of students' grades. Some researchers believe that the reasons for this phenomenon are complicated, but the main reason is that American public education is in a monopoly position and lacks competition mechanism, which leads to inefficient use of funds. To this end, some places have introduced a competitive mechanism and reformed the system, giving parents and students the right to fully choose schools. In order to attract more students, the school has taken various measures to improve the efficiency of the use of education funds, thus improving the overall quality of education.

For a long time, American higher education has formed a multi-channel financing system. On the whole, various funds allocated by governments at all levels, tuition fees borne by students and school service income are the three major sources of funds for colleges and universities. Although the proportion of these three total incomes in the total funds has declined slightly in recent years, they still dominate. For example, in 2000, the proportion of these three incomes in all recurrent funds was over 90% in public universities, while only over 80% in private universities. Among them, government appropriation is the largest source of funds for public universities, while tuition and fees income is the primary channel of funds for private universities.