; (vii) sums appropriated to private nonprofit institutions of higher education, or to proprietary institutions of higher education, for capital outlay or operating expenses; and (viii) any other funds excluded under subparagraph (B). (B) Exclusions Net State operating support does not include funds for— (i) student aid programs that provide grants to students attending out-of-State institutions of higher education, proprietary institutions of higher education, and institutions of higher education not accredited by an agency or association recognized by the Secretary pursuant to section 496; (ii) capital outlays; (iii) deferred maintenance; (iv) financial aid to students awarded predominantly on the basis of merit; (v) hospitals, athletics, or other auxiliary enterprises; (vi) research and development; or (vii) any other funds that the Secretary determines shall not be included in the calculation of net State operating support for higher education for such State. (6) Net State operating support per student The term net State operating support per student means, for a fiscal year— (A) the net State operating support for the previous fiscal year; divided by (B) the headcount for the previous fiscal year. (7) Partnership Office The term Partnership Office means the Office created under section 499A–4(a). (8) Public institution of higher education The term public institution of higher education means an educational institution in any State that— (A) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, or persons who are eligible students; (B) is legally authorized within such State to provide a program of education beyond secondary education