Given the Sturm und Drang and bad accounting surrounding recent cuts to the Institute of Education Sciences (IES), it is hard to know for sure how much money was “saved” by the Department of Government Efficiency (DOGE). We do know that a lot of contracts were canceled and that most grants, so far, have not been affected. This is important, since there is a big difference in the likelihood of who receives each type of federal largesse. Contracts are almost always awarded to not-for-profit organizations, while research grants mostly go to university-based researchers (although contract firms often do win research grants). In turn, the contract cancellations have had a large impact on the not-for-profit companies, and most are furloughing a substantial number of employees.
These cuts are clearly painful for those who lost their jobs—but let’s put these cuts in perspective.
Figure 1 reports the revenues in 2023 (pre-Trump) of six of the “usual suspects”: companies that have a large footprint in federal contracting, much of it with IES and the Department of Education (ED). These numbers provide a baseline; more revealing is how much these companies have grown between 2002 (when IES was established, launching the modern era of education R&D spending) and 2023 (the latest year with available IRS 990 data).
Figure 1: Total revenues of six large not-for-profit consulting companies, 2023
As Figure 2 shows, those years were very good for these companies. Except for the troubled Educational Testing Service (ETS), revenues in the rest exceeded the 74 percent growth in the Consumer Price Index, often by a large margin. Three of these companies saw their revenues grow by over 200 percent and a fourth, the American Institutes for Research (AIR), saw revenues increase by 176 percent. ETS’s revenue growth lagged the rate of inflation, due in part to fewer students taking the GRE and the loss of its contract with the College Board to administer the SAT. ETS’s problems will get worse as its expansive—and expensive—role in the National Assessment of Educational Progress (NAEP) has caught the attention of the Trump administration.
Figure 2: Growth in revenues: Six large not-for-profit consulting companies, 2002—2023
Given flat NAEP scores, the high percentage of American students who are not meeting basic reading and math levels, and the mediocre performance of Americans on international assessments, taxpayers could wonder just what the nation has gained from their investment in these large companies.
While the average American taxpayer may not have benefited, there are clear winners within those companies. Note that the CEO/President in three of the five companies were paid more than $1 million, and AIR’s head was paid over $2 million. (By way of comparison, when I was the Director of IES, with a budget over $800 million, my pay was around $180 thousand; the current salary for a new director is capped at $225,000).
Being on the board of directors for these companies is also a good gig; being the chair of the board even better—with compensation north of $100,000. The lack of compensation for the Manpower Demonstration Research Corporation (MDRC) board members stands out among this crew, but that is more the norm than the exception among not-for-profits.
Table 1: Compensation for Leaders, 2023
| Firm | CEO/President | Board Chair | Median Board Member Estimated |
| AIR | $2,241,374 | $162,000 | $83,000 |
| SRI | $1,456,030 | $110,000 | $67,500 |
| RTI | $1,407,186 | $115,875 | $64,000 |
| ETS | $748,744 | $164,500 | $83,000 |
| MDRC | $635,813 | No compensation |
I don’t mean to minimize the disruption and pain that so many people in these (and other) firms are experiencing. But these firms have become big and fat, living on a stream of federal contracts without much competition. For example, ETS has had the NAEP contract for over 40 years and has only occasionally had to compete for contract renewals. The Research Triangle Institute (RTI) has had the IPEDS contract for over 20 years, also with little or no competition. Indirect cost rates for these companies (often hovering around 50 percent) are also far higher than the 15 percent target the Administration is aiming for.
Big contracts, no competition, sky high indirect rates—good for these firms while it lasted, but now they must come back to earth.
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