Chapter 1 Funding Proposal Would Hurt Rural Schools the Most

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A new General Accounting Office report confirms what education observers have known since the Clinton Administration released its proposal to redirect Chapter 1 funds: Rural schools stand to lose the most under the plan.

In response to a request by the 100-member Congressional Rural Caucus, the G.A.O. reported that rural counties make up more than 80 percent of those that would no longer be eligible for any Chapter 1 funds if the Administration's proposal to alter the Chapter 1 formula were enacted.

Currently, 95 percent of all school districts receive some Chapter 1 funds. The money is allocated among states, and then among school districts, based on census counts of poor children.

As part of its plan for reauthorizing the Elementary and Secondary Education Act, the Administration has proposed a series of changes designed to direct more Chapter 1 funding to the schools where poor children make up the highest percentage of total enrollment, a change that would generally benefit inner-city districts.

In an attempt to soften the blow, the Administration proposal would guarantee each county 85 percent of its previous year's allocation.

The stakes are especially high because Chapter 1 is the federal government's largest precollegiate education program. For fiscal 1995, Chapter 1 grants are expected to jump to nearly $7 billion from the $6.3 billion appropriated in fiscal 1994.

The G.A.O. found that the proposed changes would make 102 counties--98 of them rural--ineligible for Chapter 1 basic grants. Proposed changes in the concentration-grant formula would make 419 counties ineligible for those grants, 341 of them rural. Some 260,000 poor rural children, or 12 percent of all poor rural children, would be excluded from Chapter 1 by the concentration-grant proposal.

A Smaller Piece of the Pie

One proposal that is particularly worrisome for rural schools would distribute more funds under the concentration-grant formula, which is designed to boost funding for high-poverty districts and schools, thereby making the basic-grant funding pot smaller.

Under current law, only 10 percent of Chapter 1 funds are allocated to concentration grants; the Administration's proposal would split total funding evenly between basic and concentration grants.

Reductions in federal funding for rural areas would come as the number of poor children in those areas increases. Since 1980, the total number of rural children has fallen, but the number of disadvantaged rural children climbed by 2.5 percent. Rural children's poverty rate grew to 20.4 percent from 18.6 percent in the 1980's. This is higher than the urban poverty rate, which hit 16 percent.

While it is unlikely that the Administration's controversial formula changes will make it through the legislative process intact--as representatives of urban and rural schools, as well as different regions of the country, fight to protect their share of the funding pie--many observers have said it is likely that some changes will be made. (See Education Week, Sept. 22, 1993.)

Copies of the report, "Rural Children, Increasing Poverty Rates Pose Educational Challenges,'' are available free for the first copy, $2 for each additional copy, from the G.A.O., P.O. Box 6015, Gaithersburg, Md. 20877; (202) 512-6000. Ask for item number HEHS-94-75BR.

Vol. 13, Issue 18

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