Adjusting IPEDS Finance Data to Account for the Introduction of the Aligned Form

In the late 2000s, the Department of Education began a phased rollout of a new form for the IPEDS Finance survey—known as the aligned form—for both FASB and GASB institutions. This updated form—fully implemented in the 2010 fiscal year—introduced subtle changes to how revenue and expenditure categories were defined and reported, which can complicate longitudinal analyses that compares data across years spanning the transition. In this post, I outline the key changes and describe adjustments that support effective year-to-year comparisons. These adjustments were used in the development of the NTRN data sets.

Adjusting Revenue Categories

Before the introduction of the aligned form:

• GASB institutions reported local grants and contracts (G&C) and private G&C together in a single variable, while private gifts were reported separately.

• FASB institutions reported private gifts and private G&C together but reported local G&C separately.

This inconsistency made direct comparisons between FASB and GASB institutions difficult.

The introduction of the aligned form—fully implemented in FY2010—added new revenue categories to the IPEDS Finance survey that led to:

• GASB institutions separately reporting local G&C and private G&C.

• FASB institutions separately reporting private gifts and private G&C.

To use data for the 2004 through 2009 fiscal years alongside this more detailed data, researchers need to make adjustments. The following procedure, illustrated using GASB institutions, can help:

1. Estimate category shares: For each institution, calculate the average share of local and private G&C expenditures during FY2010–FY2015.

Example: An institution might allocate 30% to local G&C and 70% to private G&C.

2. Apply shares to earlier data: Multiply the estimated shares by the combined local and private G&C expenditures for each year from FY2004–FY2009.

Example: Local G&C (e.g., 30%) × combined (local + private) G&C amount / Private G&C (e.g., 70%) × combined (local + private) G&C amount

This approach helps approximate the disaggregated values for earlier years, enabling more consistent longitudinal analysis.

Adjusting Expenditure Categories

The transition to the Aligned Form also affected expenditure reporting, particularly for GASB institutions, where three categories were removed from the main expenditure list:

• Plant operations and maintenance (O&M)

• Depreciation

• Interest

To help researchers understand these changes, this Excel file lists all expenditure variables included in the IPEDS Finance dataset for nonprofit GASB and FASB institutions from FY2004 through FY2023. 

After the introduction of the new form, the main expenditure categories for GASB and FASB institutions became identical—thanks to the removal of the three GASB categories listed above. However, researchers working with FY2004–FY2009 data need to make adjustments to align it with later years. Fortunately, the IPEDS Finance survey provides subcategory data that can guide these adjustments.

Adjustments for Plant O&M and Interest Expenditures

From FY2010 to FY2015, each main expenditure category (e.g., instruction) included subcategories showing how expenditures were allocated across:

• Salaries and wages

• Employee fringe benefits

• Depreciation

• Plant O&M

• Interest

• Other types of expenditures

 This allows for the following adjustment procedure, illustrated using interest expenditures allocated to instruction:

1. Estimate allocation shares: For each institution, calculate the average share of interest expenditures assigned to instruction during FY2010–FY2015.

2. Apply shares to earlier data: Multiply that share by the institution’s total interest expenditures for each year from FY2004–FY2009 to estimate instructional interest expenditures.

3. Recalculate instructional expenditures: Add the estimated instructional interest expenditures to the reported instructional expenditure category for each year in FY2004–FY2009.

The same procedure can be applied to plant O&M, allowing you to expand instructional expenditures to include both interest and plant O&M. You can also apply this method to other permanent main expenditure categories beyond instruction.

Adjustments for Depreciation Expenditures

While the same allocation method can technically be used for depreciation, I recommend not incorporating dollars from the main depreciation expenditure category. Here's why:

• During FY2004–FY2009, depreciation was reported both as a main expenditure category and as a subcategory under other categories.

• The total depreciation reported (main + subcategories) drops sharply between FY2009 and FY2010, when the Aligned Form was fully implemented.

• In contrast, the depreciation subcategories show a smooth time trend, suggesting they are more reliable.

The table at the end of this post contains the findings associated with the latter two points. The discrepancy for total depreciation implies that including the main depreciation category for earlier years may overestimate depreciation expenditures relative to later years. I’m not entirely sure why this pattern exists—if you have insights or alternative approaches, I’d welcome your input.

The below table also shows time trends for total interest and total plant O&M expenditures. These trends are smooth across the transition period, supporting the validity of the adjustment procedure described earlier.

		Depreciation		Interest	Plant O&M
Fiscal Year	Main Category	Subcategories	Total	Total	Total
2004	5.11	5.51	10.62	1.53	7.10
2005	5.46	5.91	11.38	1.71	7.55
2006	5.72	6.21	11.93	1.94	8.38
2007	6.12	6.58	12.70	2.18	8.78
2008	5.16	7.03	12.19	2.45	9.58
2009	4.51	7.55	12.06	2.53	10.11
2010		8.12	8.12	2.84	9.99
2011		8.73	8.73	3.14	10.43
2012		9.36	9.36	3.38	10.68
2013		9.94	9.94	3.53	10.94
2014		10.46	10.46	3.60	11.52
2015		10.88	10.88	3.66	11.63

Notes: Figures represent millions of dollars. Calcuated for the 1,695 GASB institutions reporting data for the entire period..