Prior to 1960, state subsidies in the private sector of higher education were essentially limited to the few states who used such arrangements as an alternative to maintaining extensive public college systems or advanced programs in high-cost areas. By 1970, however, a wide variety of subsidy programs had been established in all but 14 states. Student aid (scholarships, loans, tuition grants) appear to comprise the most prevalent form of subsidy arrangements, although some states also permit direct institutional grants through such devices as service contracts, appropriations to operating budgets, or low-cost financing of capital facilities.

Jay L. Chronister, A. E. Dick Howard & William H. McFarlane, State Aid for Virginia’s Private Colleges?, 2 Journal of Law and Education 593–611 (1973).