School & District Management

Title I Explained: 5 Things Educators Need to Understand About Federal Money for Students in Poverty

By Sarah D. Sparks — May 09, 2019 6 min read
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Nearly every district in the country receives at least some money through Title I, the $15.4 billion federal program to help educate low-income students. Yet few completely understand the formulas used to provide those funds from year to year.

Policymakers have long debated ways to update Title I, which dates back to the original Elementary and Secondary Education Act. In the run-up to the passage of the Every Student Succeeds Act, Congress called on the Institute of Education Sciences to recommend options for “amending and consolidating” the four formula grants in the program.

A National Center for Education Statistics’ report released this month details how big a challenge it will be for Congress to overhaul support for the country’s neediest students.

“One of the takeaways is, this is really complicated,” said Tom Snyder, NCES’ program director for annual reports.

The more than 250-page report is worth a read, but here are five critical things to understand:

1. Disadvantaged students who ‘pay’ for Title I are not always the ones served by Title I.

This is the first and most common mistake educators make when talking about Title I, Snyder said. Seventy percent of public schools and half of all public schoolchildren receive education services paid for with Title I, but whether they are poor or not may have nothing to do with how their school paid for those services.

Two of the reasons why: eligibility and schoolwide programs.

Grants are based on the number of children in a district’s catchment area who are ages 5 to 17 (I’ll dub these “school age”) and either from low-income families or those who are homeless, in foster care, or in facilities for neglected or delinquent children. Some additional children whose families receive temporary support are also counted.

These children aren’t always enrolled in the district. A district may get money based on children who are homeschooled, in private schools or alternate programs. But a district with a preschool that serves low-income 3- and 4-year-olds won’t have funding based on those students, because they aren’t old enough. Funding is determined by how many eligible children live in a district, not how many students in poverty attend a particular school.

Moreover, any school with at least 40 percent of its students in poverty can opt to use a “schoolwide” program rather than target specific students using the money. More than 9 out of 10 students who receive Title I services do so through a schoolwide program, but not all of these students are poor themselves. Studies have suggested these schoolwide programs offer more flexibility to district leaders, but many are not trained enough on how to use the money more creatively.

In the end, about 11.6 million children are “eligible” and counted for deciding a district’s Title I money, but some 25 million students receive Title I services.

2. Not all of the grants tend to push money toward the highest poverty schools.

Title I is actually comprised of four related grants, each serving a slightly different need and following a slightly different formula:

  • The largest, “basic” grants flow to any district with at least 10 eligible children, representing at least 2 percent of all school-age children in the district. This inclusive base has been around since the original Elementary and Secondary Education Act, ESSA’s predecessor, and was intended to build broad political support for money to help educate low-income children
  • “Concentration” grants go to districts with more than 6,500 eligible chidren, or 15 percent of all school-age children living in the district.
  • “Targeted” grants use a weighting system that favors districts with either high numbers or percentages of eligible children, whichever is larger.
  • “Education Finance Incentive Grants,” commonly dubbed “EFIGs,” go through the most complex process. This grant is also weighted to favor districts with higher numbers or percentages of eligible children, but it also adjusts the grants to favor states that spend more per capita on education and those where there is a smaller gap between the districts that spend the most and least per pupil.

Targeted and EFIG grants are more likely than basic or concentration grants to push money toward the areas of highest poverty.

3. Your district’s—and state’s—sizes make a big difference.

The report, conducted by the American Institutes for Research on behalf of NCES, dug into the variation among districts in different geographic areas. It found the country’s smallest school districts tended to get more money for each eligible child than the largest districts from basic and concentration grants, but that reversed for targeted and EFIG grants. Districts in the middle, with anywhere from 300 to 24,999 eligible children, got less money per child than either the biggest or smallest districts from any grant.

But the individual states made a big difference. Take, for example, two remote, rural, high-poverty school districts. One in California received $1,144 for every eligible child in fiscal 2015, which was lower than the national average of $1,313 per eligible child. But a few states away, an identical district in North Dakota would have received more than twice as much, $2,880 for each eligible child. Why?

In part, this is because each state must receive at least .5 percent of the total nationwide Title I pot, and small states like North Dakota, whose Title I grants didn’t meet that minimum, get bumped up to that threshhold. Critics have noted that this often leads the smallest states to receive higher per-child grants than the national average.

3. Schools with rising poverty may lose out to schools with shrinking poverty.

Populations shift, sometimes dramatically, from year to year, and the federal support intentionally tries not to count this against districts. Unless a district no longer has the minimum needed for a basic grant—15 children or 2 percent of its school-age population—it is “held harmless” and its funding cannot be cut more than 15 percent in a given year.

Holding districts harmless can help cushion the blow of changing demographics, but it can also hamstring districts with rising poverty rates, because awarding the grants is a zero-sum game. As the report describes:

  • Out of 12,986 districts eligible for basic grants in fiscal 2015, 2,683 had been held harmless.
  • When states met the minimum requirements of those districts, the remaining pool was smaller. That meant 517 new districts didn’t meet their minimum hold-harmless grants.
  • Meeting the second group’s minimum grants pushed another 22 districts out of their minimum grants ... and so on.

In the end, many districts with rising poverty, who would have qualified for more money at the start of the calculations, were left with no additional money once all districts were held harmless. While districts can continue to be held harmless for years (or indefinately, for some grants), there is no such guarantee that a school district experiencing rising poverty will also get a boost in Title I.

“There are so many moving pieces, you have to think of how they all fit together,” Snyder said. “In a number of cases, if you just take out one piece like the hold harmless [provision], you don’t necessarily get the change you expected.”

5. All of this means nothing until Congress passes a budget.

All of this complicated calculation tells a district what it would get if Title I was fully funded by Congress—which, in more than 50 years, it has never been.

So every year, once Congress approves spending for Title I, the formulas help districts understand what portion of the actual pot they get. In fiscal 2015, the four Title I grants were authorized for $181.7 billion, but Congress ultimately only appropriated $14.3 billion.


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A version of this news article first appeared in the Inside School Research blog.