No Child Left Behind - Title I Distribution Formulas
The Title I program under No Child Left Behind provides funds to local school districts to improve the education of disadvantaged students. It is the largest federal program supporting elementary and secondary education. Funds are distributed to school districts according to a set of four separate formulas: the Basic Grant, Concentration Grant, Targeted Assistance Grant, and the Education Finance Incentive Grant funding formulas. School districts have some discretion in how they distribute Title I funds among schools within the district, but the law requires them to prioritize the highest-poverty schools.
Basic Grant Formula
The Basic Grant formula allocates funding to school districts based on the number of poor children they serve. Any school district with at least 10 poor children and 2 percent of its students in poverty receives funding through the Basic Grant formula, so almost all school districts, even very affluent school districts, get at least some Title I funding through this formula. In 2007, $6.8 billion, or 53 percent of all Title I funding, was distributed through the Basic Grant formula. The Basic Grant formula is the least targeted of the four Title I formulas.
Concentration Grant Formula
The Concentration Grant formula also provides funding to schools based on the number of poor children they serve. To receive money though the Concentration formula, school districts must have at least 15 percent of children in poverty or 6,500 poor children, whichever is less. Eligibility thresholds serve as "cliffs": absent prior year eligibility, school districts with 14.9 percent poverty and 6,499 receive zero Concentration Grant aid.
Under both the Basic Grant and Concentration Grant formulas, once school district pass the threshold percentage of poor children required to receive funding, they receive the same amount of money per poor child regardless of how many poor children they serve. In other words, a school district with 15 percent of children in poverty gets the same amount of money per poor child as a school district with 99 percent of children in poverty—despite considerable evidence that it costs more to educate students in schools with high poverty rates.
Concentration Grant money funds are provided on top of money a school district receives through the Basic Grant formula. In 2007, almost $1.4 billion, or about 10 percent of Title I funding, was distributed through the Concentration formula.
Targeted Formula
The Targeted Assistance Grant formula is different: Rather than providing the same amount of Title I funding per poor child, it provides more money per child as a district’s poverty rate increases, so that higher-poverty school districts get more money per poor child than lower ones do.
Each additional child in poverty above 38 precent brings a district 4 times as much Title I funding as each poor child up to 16 percent of children in poverty. Each additional child in poverty beyond 35,515 brings a district 3 times as much Title I funding as its first 691 children in poverty. Weighting operates on a marginal basis to avoid a "cliff" effect.
In 2007, $2.3 billion, or 18 percent of federal Title I funding, was distributed through the Targeted Assistance Grant formula. The Targeted Assistance Grant formula is the second most targeted Title I formula to school districts nationwide.
Education Finance Incentive Grant Formula
The Education Finance Incentive Grant Formula is designed to: (1) reward "good school finance states" that spend more state resources on public education and distribute that funding equitably, and (2) doubly target funds on high poverty school districts in "bad school finance states" that inequitably distribute state and local education funding.
The formula takes into account states’ fiscal effort—the percentage of per capita income devoted to education—as well as how equitably the state school finance system distributes state and local funding for education. Within states, funding is distributed to school districts in a manner similiar to the Targeted Assistance Grant formula, except that in "bad school finance states" weights are doubled.
In 2007, $2.3 billion, or 18 percent of federal Title I funding, was distributed through the Education Finance Incentive Grant formula. According to the Congressional Research Service, the Education Finance Incentive Grant formula is the most targeted Title I formula to school districts nationwide.
Federal Title I funding has increased more than $4 billion, or 47 percent, since 2001. All of that new Title I funding (i.e. amounts above the fiscal year 2001 level) has been distributed through the Targeted Assistance and Education Finance Incentive Grant formulas—the two formulas that most closely focus funding on the disadvantaged students Title I is supposed to help. Further, funding for the Basic Grant formula, the least targeted of all NCLB’s formulas, has actually declined by about $600 million since 2001, and that funding has been shifted to the Targeted Assistance and Education Finance Incentive Grant programs.
