This work is the conclusion of a series, Understanding and Improving Title I of ESEA.
What is Title I?
Need a refresher on all things Title I? Check out All4Ed’s explainer on the Title I program and why it matters for students and families.
¿Qué es el Título I?
¿Necesita un repaso de todo relacionado con el Título I? Consulte el explicador de All4Ed sobre el programa de Título I y por qué es importante para los estudiantes y las familias.
Title I of the Elementary and Secondary Education Act (ESEA) is the primary federal funding source for meeting the supplemental education needs of elementary and secondary students from low-income families. By creating the Title I program nearly sixty years ago, Congress recognized that children from low-income families had greater educational needs and that districts serving students living in poverty—especially large concentrations of these students—often lacked the funding to fully meet those needs. Unfortunately, as our analyses in this series showed, current Title I policy does not sufficiently target resources to communities and schools with the highest concentrations of students from low-income families.
Building from our findings—including the simulations in Title I of ESEA: How the Formulas Benefit Different Types of School Districts—there are several measures that when combined could further the impact of Title I and help the program better meet its purpose to support children from low-income families. As policymakers and advocates weigh increased investments in education and contemplate the next reauthorization of ESEA, they should consider the following recommendations to improve funding equity within the Title I program.
Although the purpose of Title I is to support the education of children living in high concentrations of poverty, the program’s eligibility thresholds do not reflect this policy objective. Nearly all school districts are eligible for Title I funds. For example, to be eligible for a Basic Grant, a local educational agency (LEA) must only have a poverty rate of 2% and 10 formula-eligible children. LEA eligibility criteria for the newer Targeted Grant and Education Finance Incentive Grant (EFIG) are barely more stringent, increasing the requisite formula child percentage to at least 5% and maintaining the required 10 formula children. In this regard, the Concentration Grant stands out; LEAs must have a population that is at least 15% formula children or 6,500 formula children. This explains why Concentration Grants target more of the simulated increase in Title I funding (see Title I of ESEA: How the Formulas Benefit Different Types of School Districts) to districts with higher poverty rates than any of the other Title I formulas.
To be sure, the near-universal nature of Title I funding has some benefits. School districts with low poverty rates overall may contain high-poverty schools whose students could benefit from Title I funds, and the program is supported by a broad, bipartisan political coalition. Further, the fact that most districts receive Title I funds makes it possible to ensure widespread adoption of critical policies as a condition of receiving funds, such as administering statewide assessments, publishing transparent education data on school report cards, and developing school improvement plans.
That said, it is clear from the data that many low-poverty districts receive significant Title I funding. Therefore, in order to meet the intent of Title I, Congress should consider increasing LEA eligibility thresholds—particularly for the Targeted Grant and EFIG—to ensure limited federal resources are focused on children with the greatest need. These changes could be implemented over time and/or alongside hold harmless provisions to mitigate disruptions to LEAs and schools that would receive less—or no—Title I funding as a result of alterations to the eligibility criteria. In addition, maintaining the current eligibility criteria for the Basic Grant while increasing eligibility for Targeted Grants and EFIG would ensure continued widespread adoption of Title I’s policy requirements and widespread political support for the overall program.
Although appropriations provided to Title I above the fiscal year (FY) 2001 level are distributed through the Targeted Grant and EFIG formulas by statute, the Basic Grant formula still accounts for 38% of overall Title I spending. Because the eligibility threshold for the Basic Grant formula is so low (unlike Concentration Grants) and because the formula child count used in the Basic Grant formula is unweighted (unlike Targeted Grants and EFIG), its prominence within the overall Title I appropriation limits the targeting of the overall program to LEAs with the highest concentrations of poverty.
While it would be politically impractical to eliminate Basic Grants entirely, it is critical for policymakers to commit to increasing equitable distribution of Title I funds, consistent with the program’s purpose to support students living in concentrations of poverty. This can be done by continuing to allocate new funds through the Targeted Grant and EFIG formulas—while both significantly increasing the overall Title I appropriation and making changes to improve targeting within these formulas—as well as by reconsidering funding for Concentrations Grants.
Like the Basic Grant, the Concentration Grant has been maintained at FY 2001 levels. However, our simulations indicate the Concentration Grant formula would target significant new funding to districts with the highest concentrations of poverty compared to any of the other existing formulas due to its stricter LEA eligibility criteria. Congress should consider increasing funding levels for Concentration Grants, as well as Targeted Grants and EFIG, in future appropriations as these grant formulas are better designed to target funds to children with the greatest needs.
Currently, all of the Title I grant formulas favor school districts in states that spend more on education. However, district poverty and state spending are negatively correlated; low-poverty districts tend to be located in states with higher education spending. In other words, the use of state per-pupil expenditure (SPPE) in the formulas makes it more difficult to target Title I funding to districts with the highest poverty rates. High-poverty districts in low-spending states receive less Title I funding than high-poverty districts in high-spending states. That said, SPPE is adjusted in the Title I formulas to have a lower and upper bound, which somewhat blunts its role in diverting more funds to low-poverty districts in high-spending states. Indeed, our data showed that removing adjusted SPPE from the formulas and replacing it with a different state- or district-specific spending measure—or nothing at all (i.e., using a constant national SPPE)—would not significantly change how well funds are targeted to high-poverty LEAs, but it would improve the situation somewhat.
Replacing adjusted SPPE with a local, price-based adjustment metric (such as the Comparable Wage Index for Teachers) makes theoretical sense, would marginally improve targeting to high-poverty LEAs, and would limit horizontal inequities where high-poverty schools receive less funding in low-spending versus high-spending states. Policymakers could also consider other ways to incorporate relative costs across school districts in the Title I formula, such as the Census Bureau’s Supplemental Poverty Measure in place of the standard federal poverty measure.1For more information on the potential advantages of using the Supplemental Poverty Measure instead of the standard federal poverty measure for determining Title I allocations, see appendix B of ESEA: Title I Poverty Measures and Grants to Local Educational Agencies and Schools, https://crsreports.congress.gov/product/pdf/R/R46600 (accessed October 6, 2022).
The Targeted Grant and EFIG formulas each attempt to provide greater per-formula child funding levels to districts serving more children living in poverty by using a weighted formula child count (see Title I of ESEA: How the Formulas Work for descriptions of the specific weights and brackets used in each formula). However, the weighted formula child counts in both Targeted Grants and EFIG consider either the number of formula-eligible students in an LEA (number weighting) or the poverty rate in the LEA (percentage weighting), whichever produces a higher weighted count.
As a result of how the weights and brackets are currently set, large LEAs are advantaged in the Targeted Grant and EFIG formulas, even if they have relatively low poverty rates, because they benefit from counting the number of formula-eligible children living in the district. For example, in our simulations, districts with enrollments above 5,000 have simulated Targeted Grant allocations per formula child that are about 45% larger than for smaller districts. In the context of a fixed amount of Title I appropriations, number weighting reduces funds available for smaller districts—many of which have high poverty rates—and increases Title I participation among lower-poverty schools.
That said, there are valid reasons to use number weighting in the Targeted Grant and EFIG formulas, instead of relying on percentage weighting alone. In particular, eliminating number weighting could harm high-poverty schools in states that have fewer, larger countywide school districts, where high-poverty schools are more likely to be located in districts with lower poverty rates and where there may be more socioeconomic segregation within districts than between districts.
Finally, the brackets and weights used to determine the weighted formula child count based on percentage weighting have not been updated since the passage of the No Child Left Behind Act in 2001. The precise poverty rate brackets were intended to reflect equal quintiles of children from low-income families, but child poverty rates have declined over time. Today, just 8.5% of formula children reside in districts using the highest bracket, not 20%. This limits the ability of LEAs with high poverty rates (by today’s standards) to benefit as greatly from the weighted formula child count.
Given this evidence, policymakers should consider revising the Targeted Grant and EFIG brackets and weights used to produce each district’s weighted formula child count and should commission a Congressional Research Service report that explores several variations to determine which approach(es) promote(s) the greatest level of targeting. These approaches could include the following:
- As our simulations show that many districts with relatively low poverty rates receive Targeted Grants and EFIG, policymakers could examine increasing the weights associated with only the top brackets (those that apply to the highest-poverty LEAs) to target relatively more funding from these formulas to districts with the greatest concentrations of poverty. Such a change could be made to both number-weighted and percentage-weighted approaches.
- Given that large LEAs receive preference over smaller LEAs even if they have the same formula child rate, policymakers could consider requiring LEAs to meet a minimum formula child rate to “qualify” to use number weighting (instead of percentage weighting) to determine their weighted formula child count. Congress could also study the impact of eliminating number weighting entirely alongside adjusting the percentage weighting process to protect very large districts with relatively high percentages of formula children that currently benefit from number weighting.
- Policymakers could consider increasing the weights associated with some, or all, of the brackets in the percentage-weighted formula child count but not the number-weighted formula child count so that the percentage-weighted count would be more likely to produce a higher count than current practice.
- Congress could consider updating the poverty rate brackets used in percentage weighting to be more reflective of current poverty levels (and in the next reauthorization of ESEA, regular updates to the brackets could be built into the formulas) to ensure students with the greatest need are given the most resources. Further, the new brackets need not rely on a quintile structure; a reimagined approach could use deciles to better differentiate support for LEAs based on their poverty rates or use brackets that are unequal in size (e.g., a large proportion of formula children in the first, lowest-weighted bracket, with four additional, higher-weighted brackets more narrowly applied).
While the previous recommendations consider changes to the structures of the existing formulas that would better target current and future Title I funding to areas with the highest concentrations of poverty, federal policymakers have other potential tools to use in tackling funding equity. These include the following:
- Although Title I is the largest federal funding stream supporting K–12 education, very little is publicly reported by states and LEAs regarding the distribution of Title I funds to individual schools. There is no requirement for reporting how much individual schools receive in Title I funds, how much state educational agencies (SEAs) hold in reserve, how an SEA decides to allocate funds to LEAs after holding its reserve, how an LEA decides to allocate funds to schools, or the percentage of Title I funds reserved for LEA-level administrative costs instead of allocated to schools. Policymakers should increase transparency in Title I by requiring or encouraging SEAs and LEAs to include this information on state, district, and school report cards required under ESEA. Building on lessons learned from new fiscal reporting required by the Every Student Succeeds Act (ESSA), policymakers should ensure there are resources, including technical assistance, to help states and districts build the data infrastructure and capacity to meet any new reporting requirements.
- Because it is called the Education Finance Incentive Grant program, there is an implication that EFIG should incentivize state policymakers to take certain actions to increase state education funding equity and effort and therefore their EFIG allocation. However, as discussed in Title I’s Education Finance Incentive Grant Program Is Unlikely to Increase Effort and Equity in State Policy, EFIG is not a particularly effective incentive, given the complexities of the formula, the amount of money at stake, and the design quirks of the Equity and Effort Factors. Rather than relying on EFIG alone to promote fiscal equity at the state level, federal policymakers could consider funding new programs—or requirements—that more directly address challenges related to inadequate state funding for K–12 education and/or inequitable school funding. For example, the Biden administration proposed a $100 million reservation in its Title I budget request to fund voluntary state and local fiscal equity commissions to identify and close school funding gaps, while the American Rescue Plan included a new “maintenance of equity” requirement for states and school districts to receive relief funds. Policymakers could take even more dramatic action by (1) strengthening Title I’s existing fiscal requirements (supplement not supplant, maintenance of effort, and comparability) and/or (2) adding new requirements similar to maintenance of equity in the next reauthorization of ESEA. Likewise, policymakers seeking to improve state spending levels for education could look to other programs like Medicaid expansion that provide a meaningful federal match to state lawmakers who increase their investments in critical services and programs. A new program—and new funding—that directly encourages states to spend more on K–12 education and spend those funds more equitably could provide modest match rates to states with high spending and more generous match rates to states that spend the least, all without threatening current Title I funding from which students in low-spending states benefit.
- Today’s four Title I grant formulas are the result of nearly 60 years of political compromises made throughout nine reauthorizations of the original ESEA of 1965. Each formula has its limitations—some more than others—in targeting Title I funding to school districts and schools serving children living in the highest concentrations of poverty. In addition to revising the formulas in the ways noted above, policymakers could consider developing a new Title I formula that provides greater per-child funding levels to LEAs and schools as their concentration of poverty increases and more effectively targets funding than current policy. To limit the political and practical implications of this change, a hold harmless policy could be implemented to prevent states, LEAs, and schools from receiving a Title I allocation below the level received in the prior fiscal year. All new funds could be allocated through this new formula and/or existing formulas could be replaced by the new formula.
Equitable education experiences for historically marginalized student groups depend on equitable distribution of resources. Yet policymakers have not updated the formulas that determine the largest source of federal funding for K–12 education in over two decades. We hope these research findings and recommendations surface ideas worthy of further consideration and study and equip policymakers for future debates over Title I funding and the federal role in promoting fiscal equity.
- 1For more information on the potential advantages of using the Supplemental Poverty Measure instead of the standard federal poverty measure for determining Title I allocations, see appendix B of ESEA: Title I Poverty Measures and Grants to Local Educational Agencies and Schools, https://crsreports.congress.gov/product/pdf/R/R46600 (accessed October 6, 2022).