- Chapters
- Chapter 1: Fiscal Year 2015 Final Allocations for Title I
- Chapter 2: Title I Allocations by Locale and State
- Chapter 3: Total Title I Allocations—Formula Analyses
- Chapter 4: Basic Grants—Formula Analyses
- Chapter 5: Concentration Grants—Formula Analyses
- Chapter 6: Targeted Grants—Formula Analyses
- Chapter 7: Education Finance Incentive Grants (EFIG)—Formula Analyses
- Bibliography
- Appendix A
- Appendix B
- Appendix C
Executive Summary
Introduction
In 1965, Congress established Title I, Part A (herein referred to as Title I) as a part of the landmark Elementary and Secondary Education Act (ESEA). Congress noted two issues that it hoped to address through Title I funding: schools needed additional financial assistance to provide services to children in low-income families, and school districts with large numbers of poor children faced particular challenges compared with wealthier districts. The current law provides financial assistance to districts for children from low-income families to help ensure that all children meet challenging state academic standards.
Title I funds are currently allocated through four grants. Basic Grants are the largest component of Title I funding ($6.4 billion in fiscal year 2015 [FY 15]) (table 1.A). Concentration Grants, the smallest of the four grants ($1.3 billion in FY 15), are available to districts in which the number of formula-eligible children exceeds 6,500 or 15 percent of the district’s 5- to 17-year-old population. Targeted Grants ($3.3 billion in FY 15) are allocated to districts according to a student weighting system benefiting districts with high numbers or percentages of formula-eligible children. Education Finance Incentive Grants (EFIG) ($3.3 billion in FY 15) are allocated to states to provide districts with additional funding for low-income and disadvantaged children; the exact amount varies depending on measures of state effort and equity in funding public education.
In contrast to competitive grant processes sometimes used to distribute federal funds, Title I grants rely on a formula grant process. Competitive grant processes use a review system to evaluate proposals and make awards according to specified criteria and budget allotment. Formula grants rely on mathematical logic to make awards based on directives in legislation, generally involving population counts and mathematical criteria. All four Title I grant formulas are primarily based on a district’s number of formula-eligible children. Formula-eligible children include 5- to 17-year-old children in families living in poverty, children who receive Temporary Assistance for Needy Families (TANF), neglected and delinquent children, and foster children. The count of children in poverty is estimated at the district level through the Small Area Income and Poverty Estimates (SAIPE) program of the U.S. Census Bureau and is based on the national poverty measure. The count of formula-eligible children is also used to compute a poverty concentration weight, which is a component of the Targeted Grant and EFIG formulas.
In addition to the formula-eligible population, several provisions are applied in the mathematical formulas for each of the four grants. One key factor is the state per pupil expenditure (SPPE), which measures the cost of educating a child in a particular state. The range of SPPE values among states is bounded by minimum and maximum thresholds within the formula law. For example, within the Basic Grant formula, the maximum SPPE threshold is capped at 20 percent over the national average. All four grants are affected by the state minimum provision, which is designed to ensure that each state receives enough funding to maintain a program of sufficient size to make the administrative effort worthwhile. The state minimum provision provides that no state may receive less than a stipulated percentage of the national total allocation. All four grants also include a hold harmless provision, which limits the size of a decrease that a district may have in its grant allocation from one year to the next.
While mathematical formulas for all four grants are fundamentally based on the count of formula-eligible children and several shared provisions, each grant has a unique, complex series of algorithms for determining allocations for that grant. The EFIG formula includes both a state effort provision (the measure of state effort to provide financial support compared with its relative wealth) and a state equity provision (the degree to which education expenditures within a state are equalized). Also, the eligibility criteria vary for each grant. For example, districts are eligible for Concentration Grants if the number of formula-eligible children in the district exceeds 6,500 or 15 percent of the district’s 5- to 17-year-old population (regardless of poverty rate). Thus, a large district could be eligible for a Concentration Grant even if the poverty rate for the district is well below the national average. It is important to understand that the Title I allocation is a distribution of a fixed amount of money that all districts share. When funds are shifted to bring districts up to hold harmless levels, they are taken away from other districts that may have had higher initial allocations due to additional formula-eligible children or increasing percentages of formula-eligible children.
It is important to note that there is no direct link between the formula-eligible children upon whom the distribution of funds is based and the children who receive services from Title I. Today, 95 percent of children served by Title I receive services in schoolwide programs that serve all children in the school, regardless of whether they meet one of the specific criteria for eligibility determination (table I.A). Altogether, about 11.6 million children are counted as formula eligible, while about 25.0 million students in the United States receive Title I services.
About This Study
This study responds to a congressional mandate under the Every Student Succeeds Act (ESSA) (Section 9211) to examine the distribution of Title I funds to understand how the current formulas affect various types of school districts, such as large or small districts, those in poor or rich areas, and those in urban or rural areas. The legislation directed the Institute of Education Sciences (IES) to respond to nine specific analytic tasks in a report. These analytic tasks specifically called for comparisons of districts across the 12 National Center for Education Statistics (NCES) geographic locales, ranging from large cities to remote rural areas. There was also a specific congressional directive to examine high-poverty districts. In addition, there was a specific request to analyze the impact of poverty child counts (number weighting) and percentage weighting in the Targeted Grant and EFIG formulas, since these two provisions are important components of those grants.
After reviewing both the research literature and available data, an expert panel was convened to come to a consensus on the analytic approaches needed to respond to the congressional mandate and provide guidance on the structure of the report. Based on the panel’s recommendations, the primary analytic metric used in this report is the amount of funding allocated for the designated Title I grant divided by the number of formula-eligible children used in the computation for that specific grant. The data used for the analysis were derived from the final FY 15 allocation. This report also includes a series of analyses comparing the distribution of Title I funds and the distribution of formula-eligible children.
In consultation with the expert panel, it was decided that the best general approach to respond to the congressional mandate was to compare Title I grants per formula-eligible child using comparative allocation formulas. For example, to address the congressional mandate to examine the extent to which number weighting and percentage weighting affected the allocations, these two provisions were compared with independent allocation computations. Similarly, several congressionally mandated tasks requested analyses of whether specific provisions “unduly benefit or unduly disadvantage” certain types of districts. It was decided that formula alternatives provided the best way of analyzing these provisions in the manner intended by Congress.
Another key recommendation from the expert panel was based on its recognition that differences in local cost structures would affect the actual purchasing value of the allocated funds. The expert panel recommended that NCES adjust the allocations using the American Community Survey-Comparable Wage Index (ACS-CWI) to provide insights on the actual purchasing power of the Title I funds for districts in various parts of the country. The panel also noted that the state minimum provision tends to provide higher allocations per formula-eligible child to districts in states with smaller population sizes, but there are no established criteria to measure the funding needs of small districts to implement effective small-scale programs. The panel thought a deeper understanding of the cost structures and economies of scale for large and small districts could play a role in future conversations about school finance and recommended that NCES include relevant information in the report. In response to this recommendation, this report contains a comparison of education costs across a range of district locales and population sizes (see the Expenditures per Student by School District Locale and Size textbox in the Introduction).
All the analytic results in this report are summarized at the national and state levels by the 12 NCES geographic locales (large city, midsize suburban area, distant town, remote rural area, etc.), district poverty level, and district 5- to 17-year-old population size categories (ranging from populations of less than 300 to populations of 25,000 or more). The data are presented both for formulas existing under current law as well as for a selection of the expert panel’s suggested alternative formulas that may be of interest to different policymaking constituencies. Selected results also are presented in locality-based cost-adjusted dollars. In addition to the tables included in this report, there is an online listing of district-level data.
It is anticipated that the differences in allocations per formula-eligible child identified in this report will be further assessed by policymaking groups and research communities for their implications on outcomes for economically disadvantaged children in large and small districts in different areas of the country. This report does not provide recommendations for changes to the Title I formulas, as NCES is prohibited by legislation from making such recommendations. The report is intended to provide a deeper understanding of how the formulas currently work for different types of districts and how the current law affects districts with varying characteristics. The example alternatives provide indicators of the sensitivity of the current formulas to various types of changes to computations. These analyses are not presented as recommendations but rather as examples of how alternative assumptions interact with the funding allocations on a per formula-eligible child basis.
Key Findings
Title I overall
Nationally, 21.4 percent of 5- to 17-year-olds were considered formula eligible for Title I in FY 15 (table 1.C). Puerto Rico (55.9 percent), the District of Columbia (32.5 percent), and Mississippi (32.2 percent) had the highest percentages of formula-eligible children, while New Hampshire (9.9 percent) and North Dakota (11.8 percent) had the lowest percentages. The distribution of formula-eligible children was not directly reflected in the distribution of total Title I allocations, which included funds allocated under Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG). For example, 13.1 percent of all formula-eligible children were in California and 5.9 percent of all formula-eligible children were in New York. However, California was allocated 11.8 percent of all Title I funds, 1.3 percentage points less than its percentage of formula-eligible children. In contrast, New York was allocated 7.7 percent of all Title I funds, 1.8 percentage points higher than its percentage of formula-eligible children.
The total Title I allocation per formula-eligible child provides a more direct metric than comparing distributions of formula-eligible children with distributions of funds. The total Title I final allocation per formula-eligible child in the United States was $1,227 but ranged from $984 in Idaho to $2,590 in Vermont, a difference of $1,6061 (table 1.A). The seven states (and the District of Columbia) that received the highest Title I allocations per formula-eligible child all received the state minimum allocation for one or more of the four Title I grants.
The range in state allocations can be partly attributed to key Title I formula provisions, particularly the state minimum and hold harmless provisions. Removing the state minimum provision from the formula for each grant reduced the difference in the total Title I allocations per formula-eligible child between the states with the highest ($2,078 in Wyoming) and lowest ($978 in Idaho) allocations for the first year (since the hold harmless provision restricts the size of a decrease in any one year) to $1,100 (table 3.A). Removing both the state minimum and hold harmless provisions in combination further reduced the difference in the total Title I allocations per formula-eligible child between the jurisdictions with the highest ($1,746 in the District of Columbia) and lowest ($982 in Idaho) allocations to $763.
The two states with the highest total Title I final allocations per formula-eligible child that did not receive the state minimum allocation under any of the Title I grants were New York ($1,611) and Maryland ($1,588). New York, which had the highest allocation for a state not eligible for the state minimum provision, was affected by its high state per pupil expenditure (SPPE) value, which was capped at 120 percent of the U.S. average. Maryland also had a high SPPE value, which was similarly capped, and benefited from having relatively few large districts compared with many other states, which tended to reduce the disparity for the EFIG formula and increase the number of children in districts qualifying for Concentration Grants and Targeted Grants.
The total Title I allocations per formula-eligible child varied among the 12 National Center for Education Statistics (NCES) geographic locales, which were based on a district’s population and proximity to an urbanized area. The locales with the highest total Title I final allocations per formula-eligible child were the most densely and least densely populated areas: large cities ($1,466) and remote rural areas ($1,313) (table 3.B). Districts in fringe rural areas ($1,070), fringe towns ($1,088), and small suburban areas ($1,102) had the lowest total Title I final allocations per formula-eligible child. Large cities had the highest total Title I allocation per formula-eligible child for most formula alternatives involving the removal of single or multiple provisions. For example, when the SPPE, state minimum, hold harmless, number weighting, and state effort provisions were removed in combination, large cities ($1,319) had the highest total Title I allocation per formula-eligible child and remote rural areas ($1,292) had the second-highest allocation; small suburban areas had the lowest allocation ($1,122).
In the final allocation, and in each of the formula alternatives that were analyzed, districts in the highest poverty quarter (i.e., the poorest districts) had the highest total Title I allocations per formula-eligible child, and districts in the lowest poverty quarter (i.e., the least-poor districts) had the lowest total Title I allocations per formula-eligible child. In the final allocation, the highest poverty quarter had the highest total Title I final allocation per formula-eligible child ($1,381), and districts in the lowest poverty quarter had the lowest allocation ($1,023). Similarly, when the SPPE, state minimum, hold harmless, number weighting, and state effort provisions were removed in combination, for example, the total Title I allocation per formula-eligible child was $1,395 for the highest poverty quarter, compared with an allocation of $921 for the lowest poverty quarter.
Districts with a 5- to 17-year-old population of less than 300 (the smallest districts) had the highest total Title I final allocation per formula-eligible child ($1,442) compared with districts of all other population sizes; districts with a population of 25,000 or more (the largest districts) had the second-highest allocation ($1,323). The total Title I final allocation per formula-eligible child was lowest for districts with a population of 5,000 to 9,999 ($1,107).
Basic Grants
Basic Grants are the largest component of Title I funding and serve the largest number of districts. Basic Grants accounted for approximately $6.4 billion of the total Title I funds in FY 15, or about 45 percent of the $14.3 billion allocated (table 1.A). The Basic Grant final allocations per formula-eligible child ranged from $462 in Utah to $1,121 in Vermont, a difference of $659 (table 4.A). When the SPPE and hold harmless provisions were removed from the formula in combination, the Basic Grant allocations per formula-eligible child ranged from $546 in 39 states and Puerto Rico to $1,121 in Vermont, a difference of $575.
The Basic Grant final allocations per formula-eligible child also varied by locale: allocations were highest in remote rural areas ($583) and small suburban areas ($563) and lowest in midsize cities ($532) and fringe rural areas ($534) (table 4.B). The difference in the Basic Grant final allocations per formula-eligible child between the locales with the highest and lowest allocations was $52.
Basic Grants are less targeted to the highest poverty districts than other Title I grants because the Basic Grant formula does not include weighting factors for high-poverty districts, and the poverty threshold is lower than for the other Title I grants. Districts in the lowest poverty quarter received a higher Basic Grant final allocation per formula-eligible child ($604) than districts in the highest poverty quarter ($558). Also, in most of the analyses where single or multiple provisions were removed from the formula, the lowest poverty quarter had the highest Basic Grant allocation per formula-eligible child, and the second-highest poverty quarter had the lowest allocation. For example, when the state minimum provision was removed from the formula, the lowest poverty quarter had the highest Basic Grant allocation per formula-eligible child ($601), and the second-highest poverty quarter had the lowest allocation ($521).
Concentration Grants
Concentration Grants, the smallest of the four grants, provide funds to districts with relatively large numbers or percentages of formula-eligible children. They accounted for approximately $1.3 billion (9 percent) of the total Title I funds in FY 15 (table 1.A). The Concentration Grant final allocation per formula-eligible child was $134. Wyoming received the highest or among the highest Concentration Grant allocation per formula-eligible child in the final allocation and for most of the alternatives involving the removal of single or multiple provisions. For example, after removal of the 6,500 formula-eligible children provision from the formula, the Concentration Grant allocations per formula-eligible child ranged from $110 in Utah and $111 in Florida and North Carolina to $590 in North Dakota and $871 in Wyoming, a difference between the lowest and the highest of $761 or 692 percent (table 5.A).
In all the analyses where single provisions were removed from the formula, the lowest poverty quarter had the highest Concentration Grant allocation per formula-eligible child and the second-highest poverty quarter had the lowest allocation (table 5.B). For example, when the SPPE provision was removed from the formula, the lowest poverty quarter had the highest Concentration Grant allocation per formula-eligible child ($200), and second-highest poverty quarter had the lowest allocation ($125).
Targeted Grants
Targeted Grants provide funding to districts according to a system that allocates proportionately more funds to districts with higher numbers or percentages of formula-eligible children. Targeted Grants accounted for approximately $3.3 billion (23 percent) of the total Title I funds in FY 15 (table 1.A). The Targeted Grant final allocation per formula-eligible child was $282, but the allocations ranged from $196 in Idaho and $198 in Iowa to over $600 in North Dakota, Wyoming, and Vermont (table 6.A).
The Targeted Grant final allocation per formula-eligible child for large cities ($377) was higher than the allocations for all other locales, which ranged from $218 in fringe towns and $219 in fringe rural areas to $290 in remote rural areas (table 6.B). The Targeted Grant allocation per formula-eligible child was also higher for large cities than all other locales in all allocation analyses involving the removal of single or multiple provisions, except when SPPE, hold harmless, and number weighting provisions were removed in combination.
The Targeted Grant final allocation per formula-eligible child increased as the poverty rate increased. The lowest poverty quarter received a Targeted Grant final allocation per formula-eligible child of $218, compared with an allocation of $336 for the highest poverty quarter. The pattern of the highest poverty quarter receiving the highest Targeted Grant allocation per formula-eligible child persisted even when both the hold harmless and number weighting provisions were removed from the formula in combination. When removing these provisions, the difference in the Targeted Grant allocations between the highest and lowest poverty quarters increased to $131 (the difference for the final allocations was $119). The largest districts in the highest poverty quarter had a higher Targeted Grant final allocation per formula-eligible child ($406) than districts in other poverty quarters and of other population sizes, which ranged from $178 for the second-smallest districts in the lowest poverty quarter to $347 for the second-largest districts in the highest poverty quarter.
Education Finance Incentive Grants
Education Finance Incentive Grants (EFIG) are allocated to states to provide districts with additional funding for low-income and disadvantaged children; the amount varies depending on measures of state effort and equity in funding public education. These grants accounted for approximately $3.3 billion (23 percent) of the total Title I funds in FY 15 (table 1.A). The EFIG final allocation per formula-eligible child was $282 and ranged from $219 in Idaho to $684 in Vermont, a difference of $465 (table 7.A). The hold harmless and number weighting provisions were only applied at the district level and did not affect state allocations. As with Targeted Grants, large cities ($395) and remote rural areas ($309) had the highest EFIG final allocations per formula-eligible child (table 7.B). EFIG final allocations per formula-eligible child in all other locales ranged from $207 for fringe towns to $291 for midsize cities.
The highest poverty quarter received a higher EFIG final allocation per formula-eligible child ($352) than districts in the lowest poverty quarter ($209). Like the pattern for Targeted Grants, the highest EFIG allocation per formula-eligible child was consistently for the highest poverty quarter when single or multiple provisions were removed from the formula. Also, within each poverty quarter, the largest districts had higher EFIG allocations than the smallest districts, except when multiple provisions were removed in combination. For example, removal of the percentage weighting provision resulted in an EFIG allocation per formula-eligible child of $428 for the largest districts in the highest poverty quarter, compared with an allocation of $279 for the smallest districts in that poverty quarter.
Summary
This report highlights that changes to the formula do not always provide systematic changes of a similar nature across all states; however, there were some general patterns. The smallest districts tended to have higher allocations per formula-eligible child than the largest districts in Basic Grants and Concentration Grants. However, for Targeted Grants and Education Finance Incentive Grants (EFIG), the largest districts tended to have higher allocations per formula-eligible child than the smallest districts. Districts with other population sizes (those with a 5- to 17-year-old population between 300 and 24,999) often had a lower total Title I allocation per formula-eligible child than the largest or smallest districts.
This report contains analytic summaries in an array of statistical tables that display allocations under current provisions of the Title I formulas for various types of districts, as well as a range of examples under alternative funding formulas. The intent was not to provide an exhaustive analysis of potential allocations of alternative formulas but rather to provide examples of tabulations that highlight analytic concepts that researchers and policy analysts may find useful. While an effort was made to look at the purchasing power of the allocations as cost adjusted by the American Community Survey-Comparable Wage Index, there was no extant methodology to accurately adjust for the relative resource levels required for small and large districts. It is hoped that this study will provide a valuable reference for further analyses of the structure of the formulas for Title I allocations and encourage additional research on the role of Title I funds in supporting the education of disadvantaged children.
1 All calculations within this report are based on unrounded estimates. Therefore, the reader may find that a calculation cited in the text or figure, such as a difference or a percentage change, may not be identical to the calculation obtained by using the rounded values shown in the accompanying tables.