State Trust Lands

Under the framework of these ordinances, a centrally located parcel in each surveyed township – section sixteen – would be reserved for the support of schools, and once the territory became a state, the state would receive title to these reserved parcels (as well as land grants to support other public institutions).

This policy was later expanded to include additional reserved sections to support schools, as well as land grants to support other public institutions, such as universities for mechanical and agricultural education (now called land-grant universities),[2] hospitals, schools for the deaf and blind, and correctional facilities, among others.

With populations oriented around small, agrarian communities, these townships would provide for the democratic education of their citizens.

By granting some of these lands to newly organized states, the federal government could provide new state governments (who lacked any substantial tax base) with a source of revenue that could be used to fund public education and other important public institutions.

These permanent funds, and the interest payments derived from them, are used for many purposes related to the public school system, including guaranteeing school bonds and loans, funding construction and providing land for public institutions, and supplementing teacher salaries.