of higher education for the 3 consecutive preceding State or Indian Tribe fiscal years. In making the calculation under this subsection, the State or Indian Tribe shall exclude capital expenses and research and development costs and include need-based financial aid for students who attend public institutions of higher education. (e) Annual report (1) In general A State or Indian Tribe receiving a grant under this title shall submit an annual report to the Secretary describing the uses of grant funds under this title, the progress made in fulfilling the requirements of the grant, and rates of graduation, transfer and attainment of recognized postsecondary credentials at participating community colleges, and including any other information as the Secretary may require. (2) Inclusion in HEA annual report At the discretion of the Secretary, the information required in the report under paragraph (1) may be included in an annual report on higher education required under the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq.). (f) Reporting by secretary The Secretary annually shall— (1) compile and analyze the information described in subsection (e)