Department of Education

President Obama announced this week that 10 states will receive waivers of some of the most punitive provisions of No Child Left Behind (NCLB), kicking off a year of focus on how and if states will start changing their systems to align with the administration’s priorities.

At Ed Money Watch we talk a lot about funding formulas for various federal grant programs. We’ve written about proposed changes to the ESEA Title II funding formula in the House Students Success Act, the need for improvements to the Title I formula, and even idiosyncrasies in the Individuals with Disabilities Education Act formula. Congress has designed each of these formulas to account for factors such as population size and poverty rates or numbers when distributing federal funds to states and school districts. But another factor – something known as “small state minimums” – always seems to run roughshod over the intended target populations.

Small state minimums are intended to ensure that small states receive a basic level of funding under each federal grant. Often, the formula sets the minimum at a certain percentage of the total appropriation that Congress provides that year – like the 0.5 percent minimum in the Title II formula. The idea behind small state minimums has merit: just because some students live in small states doesn’t mean they are less deserving of equitable shares of federal funding. But do small state minimums always work as lawmakers intended? Or do they overcompensate and provide small states with disproportionate amounts of funding per student?

To answer this question, we compiled data on total student enrollment and total state Title I, IDEA, and Improving Teacher Quality State Grant allocations in 2010. We then computed the allocation per pupil for each state and ranked them. This analysis suggests that existing federal funding formulas for those programs do disproportionately benefit small states, though some formulas do so more than others.

The ten smallest states in the nation are the District of Columbia, Wyoming, Vermont, North Dakota, South Dakota, Delaware, Alaska, Montana, Rhode Island, and Hawaii, in that order. Their total enrollments range from a little over 69,000 to just over 180,000 in 2010. As expected, many of these states receive more in federal funding on a per pupil basis than their larger peers.

This is most consistently the case with Title II Improving Teacher Quality State Grants where the first nine smallest states receive nine largest allocations per pupil, in exact order of enrollment. This is because the formula ensures each state 0.5 percent of the total allocation, or just over $14 million in 2010. If the formula did not include small state minimums, each of these states would have received closer to $3 or $4 million under the program.  In fact, each of the small states receive dramatically more than the average allocation per pupil of $60. The District of Columbia received $202 per pupil, almost four times the national average.

Small states also fare well under the Title I formula, which should theoretically be driven by student poverty. DC, Wyoming, Vermont, North Dakota, South Dakota, and Rhode Island all rank in the top 10 in terms of Title I allocation per pupil. Of these states, only DC has a particularly high particularly high census poverty rate at 30.8 percent. The rest all fall in the bottom half of states in terms of poverty rates. These states received over $348 per pupil in Title I, and as much as $686, compared to the national average of $294.

IDEA Part B allocations are least influenced by the small state minimum provisions, but some effect is not all-together absent either. Wyoming, Vermont, North Dakota, Alaska, and Rhode Island each rank in the top 10 in allocations per pupil. Rhode Island has the highest rate of students participating in special education at 18.1 percent, so the high allocation it receives may be justifiable. But the rest of the states don’t fall among the top ten states with special education participants, even though they receive nearly $300 per pupil or more in IDEA funds compared to the national average of $233. Interestingly, DC, which is a small state and has a high percentage of special education students (16.3 percent) ranks only 21st in terms of IDEA Part B allocation.   

Clearly, small state minimums have a significant influence over how federal education funds are allocated to each state to the point where these small states are disproportionately benefiting from federal funds. This is not to say that Congress should eliminate the minimums entirely. But this analysis suggests that Congress should consider the implications of the minimums and perhaps readjust the formulas produce a more equitable distribution of funds. Just as students in small states deserve their fair share, so do students in large states.

Click here to view these data for all 50 states and the District of Columbia.

President Obama this month nominated Deborah Delisle, a former Superintendent of Public Instruction in Ohio, as Assistant Secretary in the U.S. Department of Education’s Office of Elementary and Secondary Education (OESE).  She is replacing Thelma Meléndez de Santa Ana, who is returning to her roots on the West Coast to lead a large school district in California.

Though fiscal year 2011 – the year most education funds from the American Recovery and Reinvestment Act (ARRA) of 2009 were set to expire – has come and gone, some states are still clinging to their ARRA Title I funds. These funds are intended to provide additional services for low-income students and are distributed by formula among states and school districts. In an effort to give states the opportunity to use all of their Title I funds from the stimulus bill, last September the Department of Education gave states permission to apply for waivers that would allow them to obligate any remaining ARRA Title I funds through the end of fiscal year 2012. Previously, those states have to obligate the funds September 30^th, 2011 and spend them by January 3^rd, 2012.

This was a significant development for several states that initially faced obstacles in distributing their ARRA Title I funds to districts. In some cases, states had tens of millions of dollars remaining on October 1st, 2011. But it appears that the vast majority of states had at least some money lingering in their ARRA accounts at the end of the 2011 fiscal year. Where do those states stand today? 

According to Department of Education spreadsheets on outlaid and remaining ARRA Title I funds, only six states had used every single one of their ARRA Title I dollars as of January 13, 2012. Those states are Hawaii, Iowa, Kentucky, Missouri, South Carolina, and Vermont, an interesting collection of states with widely varied budget deficits during the economic downturn.

Most states have somewhere between 0.1 percent and 2.0 percent of their funds remaining, meaning they have about 8 months to spend anywhere from a few thousand dollars (Connecticut and Alaska, for example) and several million (Ohio, Texas, and California, among others). In total, over $175 million is still unspent, 1.8 percent of the total $10 billion made available.

But a few states have really lagged in getting their funds out the door. Puerto Rico is the biggest offender – it has $70.0 million in funds remaining, 17.3 percent of its original allocation under ARRA Title I. Nebraska comes in second with 14.2 percent, or $6.8 million in remaining funds. North Dakota, the District of Columbia, and New Jersey round out the top five, each with over 5.0 percent of their funds remaining.

It is likely that the states with relatively small proportions of their funds remaining will have little trouble obligating and spending their ARRA Title I funds between now and September 30^th, 2012. But the states with significant remaining balances will have to engage in some thorough and thoughtful planning to make sure they don’t lose any of these funds at the end of the year.

To download a table containing these data for all 50 states, Puerto Rico, and the District of Columbia, click here.

Reauthorization of the Elementary and Secondary Education Act (ESEA, currently known as No Child Left Behind) has been an on again, off again proposition in Congress. The 2002 law expired in 2007 and Congress has extended it a number of times while lawmakers debate some sort of longer term policy.  Meanwhile, the Obama Administration has given states the opportunity to waive some of the provisions of the law. In the latest development, House Education and the Workforce Committee Chairman John Kline (R-MN) announced that House Republicans would be moving forward with several pieces of legislation to address different aspects of ESEA. Earlier this week, that committee released two of these bills, the Student Success Act, which would replace the current Title I of ESEA, and the Encouraging Innovation and Effective Teachers Act, which would replace Title II of the existing law.

By many accounts, both bills contain few surprises. They generally lessen the federal role in state and local K-12 education, particularly as it pertains to accountability and standards, putting more authority in states’ hands. But as we read the bills, particularly the Title I language, we noticed a few things missing that we thought for sure would be in any proposal. The top three surprising omissions are explained below:

1. Maintenance of Effort Provision of Title I: Current law states that a local school district can only receive Title I Part A funds in an upcoming year if state and local governments provided the district with at least 90 percent of the funding (per pupil or overall) that they provided in the preceding year. In other words, if a district received $8,000 per pupil in 2010 in state and local funds, it has to have received at least $7,200 per pupil (90 percent of $8,000) in 2011 to receive Title I funds in 2012. This rule ensures that states and localities don’t dramatically reduce funding for their school districts year to year.
   
   The recently introduced House bill strikes this provision entirely. It effectively gives states and localities license to dramatically cut contributions to K-12 education without jeopardizing their federal funds. While the provision was struck no doubt to give states and districts more flexibility in crafting their own budgets, the change is problematic. If the federal government doesn’t require states and localities hold up their end of education funding, it’s far less likely that they will use Title I funds to provide additional services for low income students – the core purpose of the federal funds.
2. Updates to Teacher Comparability: Current law includes a provision that requires districts to demonstrate that they are comparably funding their low- and high-income schools. But the provision contains several flaws that undermine its goal, including a “loophole” that allows districts to exclude from the comparability calculation variations in teacher salaries that are due to years of experience. Ultimately this means that the current comparability provision has few teeth: much of the variation in spending between schools in a district is due to teacher compensation, and variation due to years of experience, at that. The current law labels spending between schools “comparable” even when schools with children from wealthier families receive much higher funding, so long as it comes in the form of salaries for more experienced teachers.
   
   The House bill makes no changes to the existing provision, effectively allowing districts to turn the intent of the comparability rule on its head and short-change low-income schools. In contrast, the Senate’s Harkin/Enzi bill includes a strengthened comparability provision that eliminates the loophole and limits comparability calculations to actual expenditures rather than student-teacher ratios.
3. High School Graduation Rates in Accountability: Current law includes an extensive accountability provision that holds states, districts, and schools accountable for student performance in math and reading and high school graduation rates. Though the House-proposed bill requires states to implement an accountability program that pertains to math and reading test outcomes, it strikes the high school graduation rate provision.  Though the bill allows states to include other student outcome measures besides math and reading test performance, high school graduation rates seem like a glaring omission, especially given the recent focus on high school completion among policymakers and other stakeholders. By comparison, the Harkin/Enzi reauthorization bill in the Senate includes high school graduation rates as a required part of a state accountability plan.

Although the House has released its bill on the core functions of ESEA – accountability and the distribution of Title I funds – it is unlikely that the reauthorization process will proceed full-speed ahead. Senator Tom Harkin (D-IA) has said that he will not move a bill forward until the House presents a bi-partisan bill and many stakeholders believe that reauthorization will not occur until 2014 when the final NCLB proficiency deadline approaches (the point at which 100 percent of students are supposed to be proficient or above on math and reading tests). But at least now we know what the House has in mind for a future federal role in K-12 education: far fewer fiscal and accountability requirements for state and local school districts masquerading as flexibility and local control.

As 2011 comes to a close, we took a few minutes to review the progress – and pitfalls – of early childhood education news over the year. So before we jump into another year of news and analysis, here’s a look at some of the major stories featured on Early Ed Watch this year. Happy New Year!

I used to be a teacher: I wanted to excite children about learning and help shape the minds of the next generation. But like nearly 50 percent of teachers, I left the classroom before my fifth year. And while a higher salary would have been nice, it would not have kept me in the classroom.

Eleven states just took one step closer to the post-No Child Left Behind era.

In the absence of Congressional action to reauthorize No Child Left Behind (NCLB), the current incarnation of the Elementary and Secondary Education Act, and the law’s looming requirement that all students be proficient in math and reading by 2014, the Obama administration announced in August that the U.S. Department of Education would permit states to waive the more punitive provisions of NCLB. In return, states must meet standards set forth by the administration. The deadline for a first round of waiver applications was November 14^th, and eleven states filed applications. Unsurprisingly, each state’s application proposes different approaches to the same set of reform requirements.

Here are the stringent requirements states must meet to get a waiver. States must establish college- or career-readiness curriculum standards, design revised achievement goals for students, and overhaul teacher and principal evaluation processes. States submitting applications for this round are: Colorado, Florida, Georgia, Indiana, Kentucky, Massachusetts, Minnesota, New Jersey, New Mexico, Oklahoma, and Tennessee. Another 28 states, the District of Columbia, and Puerto Rico have expressed interest in applying for the second round by February.

In their proposals for revised achievement goals, a few states (Florida, Georgia, Minnesota, and New Jersey) stuck to a Department formula that would reformulate NCLB’s student proficiency goal. Those states will reduce by half the percentage of students who are not proficient in the “all students” group and in each subgroup within 6 years. Perhaps unsurprisingly, no state chose to use a Department option that would allow them to maintain the 100 percent proficiency goal originally required under NCLB, with a reset timeline of the 2019-2020 school year.

But most states opted to create their own alternative goals rather than follow the Department’s formula. Those applications will have to be approved by reviewers outside the Department.

Georgia’s application, for example, would implement the College- and Career-Ready Performance Index (CCRPI), a plan that state officials have been working on for months. It will track state, district, school, teacher, and student progress by looking at achievement, attendance records, and student preparedness for higher grade levels to develop a more comprehensive picture of student progress. Colorado wants to use its Colorado Growth Model, a comprehensive database, to establish new proficiency targets. Florida proposed objectives using both its existing “school grading” system, which assigns a letter grade to each school, and performance targets based on student assessment results.

States also took some liberties in deciding how they will identify and improve low-performing schools, based largely on classification structures that the states already use.  Massachusetts would require the bottom four percent of schools to create a 6-year plan for improvement or risk takeover by the state. This program follows current state law, but identifies less than the application-mandated 5 percent of low-performing schools. As a result, the state will expand the program to name additional low-performing schools to reach the threshold. In contrast, Minnesota chose to shape its school turnaround efforts after the existing federal program. Its application says that it would use the Department of Education’s guidance, including the four School Improvement Grant turnaround models, to support its struggling schools.

Then there are the reform requirements. The administration set up the NCLB waiver requirements similarly to the Race to the Top (RttT) competitive grant program. Both applications required states to fulfill a number of education reforms, including incorporating student performance into teacher pay decisions and evaluations; adopting rigorous academic standards (including the Common Core standards); and eliminating any laws blocking linkages between student and teacher data.

Because most of the states that applied for NCLB waivers also applied for Race to the Top, many of the applicants have already taken the legislative and regulatory actions needed to support their applications. Four of the states – Tennessee, Florida, Georgia, and Massachusetts – were Race to the Top winners, and policymakers in other states – New Jersey, Iowa, and Michigan, among others – are using the NCLB waiver requirements to spur state legislatures to action (the Department has specified that it will provide a grace period for governors and legislatures to make any necessary changes).

As the eleven applicants wait for decisions from the Department of Education reviewers, they can take solace in one thing: Department of Education officials say  they don’t want to throw out applications that aren’t up to par, so they intend to work with states to improve and ultimately approve the applications. In the meantime, many of the other states interested in applying for the waivers have a lot of work ahead of them to catch up to the Department’s prescriptive conditions.

Last Friday, Congress passed a new Continuing Resolution to temporarily fund fiscal year 2012 appropriations through December 16, 2011. Fiscal year 2012 began on October 1^st, 2011 but Congress has not yet finalized funding for the U.S. Department of Education. This is the third Continuing Resolution (CR) Congress has passed so far. It was added to the 2012 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, also known as the “mini-bus,” which made several funding and legislative changes to programs overseen by those agencies.  Outside of those specific changes, however, the CR makes no additional changes to appropriations for other agencies (including the Department of Education) and leaves in place those passed in previous 2012 CRs.

Most notably, the first CR, which extended 2011 appropriations into fiscal year 2012 through October 4^th, 2011, reduced the rate of federal appropriations spending by 1.503 percent. At the same time, it made no direct changes to education spending, meaning that all existing programs would continue to receive funding, including those that have been slated for elimination in previous draft appropriations bills. However, the Department of Education tends to spend its funds months after they are appropriated due to the nature of the school calendar, making the temporary funding provided through a CR almost meaningless.

That said, the 1.503 percent across-the-board-cut indirectly reduced Title I funds appropriated in fiscal year 2011 as advance appropriations (which are technically 2012 appropriations provided a year early), meaning that school districts across the country will see cuts to their Title I allocations unless Congress changes the CR language or finalizes a Labor-HHS-Education Appropriations bill. See this Ed Money Watch post for a more in-depth explanation of this issue.

So when and how will Congress finalize fiscal year 2012 appropriations for education programs?

At this point, it’s hard to say. Both the Senate and the House have taken limited action on bills to fund education programs, but only the Senate has passed its out of committee.  These two bills will likely form the foundation for a final year-end funding bill that wraps education programs in with many other agencies.

Both the House and Senate proposals make some dramatic changes to education funding, either eliminating programs entirely or cutting funding. In a surprise turn, the House draft bill includes significant increases in funding for both Title I grants for disadvantaged students and Individuals with Disabilities Education Act special education grants, but reduces overall funding for the Department of Education. See the table below for a side by side comparison of the bills.

Finally, both bills include significant eligibility changes to the Pell Grant Program. See this blog post to learn more about those changes.

Clearly the fiscal year 2012 appropriations process is far from over.  If Congress is not able to find consensus on a final funding bill by December 18^th when the latest CR expires, it is likely to pass another and try to finalize the bills by Christmas Eve.

Check back with Ed Money Watch as this process continues.

Yesterday, the Department of Education released the details for the third round of the Race to the Top competition. The first two rounds of Race to the Top (RttT) were created by the American Recovery and Reinvestment Act of 2009 to help spur systemic education reform in states. Though RttT did not receive any funding in the regular 2010 appropriations, this third round is made possible by $698 million in hard-won funding for the program from fiscal year 2011 appropriations. While the majority of that $698 million will go towards a separate $500 million early learning competition, $198 million will be available to the nine states that applied for the second round of the competition but did not win a grant.

This means that only Arizona, California, Colorado, Illinois, Kentucky, Louisiana, New Jersey, Pennsylvania, and South Carolina are even eligible for the funds. Essentially, the third round of the competition will allow each state to select certain aspects of their Round 2 RttT proposal to fund with this pot with a particular emphasis on activities to improve science, technology, engineering, and math (STEM) education.

However, each state is not automatically entitled to their share of the $198 million. Congress required that the funds be divided amongst the states based on their proportional share of the school-age population, and each state then must meet the following requirements:

1. Submit signatures of support from the governor, chief state school officer, and president of the state board of education;

2. Provide performance measures for any activities selected for funding with round three funds that were not specified in the round two application;

3. Be in compliance with Education Jobs Fund maintenance of effort requirements;

4. Be in compliance with an aspect of the State Fiscal Stabilization Fund Phase Two application relating to state longitudinal data systems;

5. Not have any legal barriers between linking student achievement data to teacher or principal effectiveness (commonly known as the student-teacher data firewall);

6. Be participating in an effort to improve the quality of state assessments through a consortium of states (like the consortiums currently funded by the Race to the Top Assessments competition).

Additionally, the law requires that each state “maintain, at a minimum, the conditions for reform described in its Race to the Top Phase 2 application.” This basically means that each state cannot backtrack on any of the reform efforts underway at the time of their round two applications like participation in the Common Core State Standards or plans to work with struggling schools.

These requirements already spell trouble for a couple of states.

South Carolina, which could very likely be uninterested in the funds to begin with, does not meet the Education Jobs Fund maintenance of effort provisions. California, which recently lost its State Longitudinal Data Systems grant, does not currently have the ability to link student data to teachers in its state data system – a requirement of the SFSF Phase 2 application. Other states could also be at risk if they have begun to undermine any reform efforts linked with their Race to the Top applications. But the Department should not be faulted for placing these restrictions on the funds – they could go a long way in ensuring that this third round of funding will go to the states most dedicated to implementing real reforms.

Overall, the greatest surprise hidden in the Department’s Race to the Top announcement was the focus on STEM education. Though the Department isn’t requiring that states use the third round of funding exclusively for STEM-focused efforts, each state will have to “allocate a meaningful share of its Phase 3 award to advance STEM education.” Though the announcement does not specify what a “meaningful share” constitutes, it appears that the Department has decided that investing these RttT funds in STEM education will give them the most bang for their reform buck.

UPDATE: A powerpoint presentation available from the Department of Education defines "meaningful share" as "sufficient funding for selected activities that are likely to result in measurable improvement in one or more STEM outcomes related to each activity. For example, a $2 million investment in expanding the number of teachers qualified to teach Advanced Placement (AP) Calculus would be considered meaningful if the State could demonstrate that this level of funding would lead to a significant percent increase in the number of students in high-poverty schools taking AP Calculus over a 3-year period."

Luckily for those nine states, each one received 100 percent of the possible 15 points available in the STEM competitive priority in their round two applications. This means each state theoretically has a detailed plan for STEM education already in their RttT proposals. Assumedly, each state will prioritize these efforts when they select parts of the proposals to support with the round three funds. But each state is also able to invest their share of the round three RttT funds in other areas of their application, if they have funds remaining. The efforts they select for the remaining funds will reveal each state’s reform priorities outside of the Department’s focus on STEM.

States interested in applying for the round three funds have until November 22^nd to provide the initial assurances described above, a pretty short timeline. Once they are deemed eligible for the funds, they have until December 16^th to submit a plan that identifies what aspects of their previous application they will be funding, a budget for these activities, and performance measures. Check back with Ed Money Watch for continued coverage of the competition.