A deep dive on how Title I funds are allocated

Title I of the Elementary and Secondary Education Act of 1965 (ESEA) directs funds to local school districts as a function of the number or percentage of economically disadvantaged children living in the district. In fiscal year (FY) 2021, Congress appropriated $16.5 billion through Title I. Congress also relied on the distribution of Title I funding from earlier years to determine the amounts of COVID relief districts received from nearly $200 billion in Elementary and Secondary School Emergency Relief (ESSER) funding. The use of Title I allocations to distribute so much money through ESSER shone a light on the substantial differences in allocation amounts even among school districts with similar poverty rates, both within and between states.

In a series of three reports, published by All4Ed, we explain each of the program’s four formulas and take a deep dive into how Title I funds are allocated.

Title I started with a single simple formula in 1965, but it now uses four separate formulas to allocate funds, and it can be difficult to understand why some districts get more funding than others. How the Formulas Work explains the process by which Title I funds are allocated to school districts overall, the history of the four formulas, and how they differ from each other.

Changes to the formulas that allocate Title I funds require a reauthorization of ESEA, which is supposed to happen every five years but has taken much longer in recent decades. However, with each year’s appropriations, Congress can influence which types of districts receive more or less funding by changing how new Title I funding is divided among the existing four formulas. How the Formulas Benefit Different Types of Districts shows which types of districts would benefit most from additional funding through each of the four formulas.

The Education Finance Incentive Grant—one of Title I’s four formulas—is meant to encourage state governments to spend more on education overall and to allocate funding more fairly across districts within states. Title I’s Education Finance Incentive Grant Program Is Unlikely to Increase Effort and Equity in State Policy explains how EFIG works and why the incentives in the EFIG formula are unlikely to achieve the stated goals.

The research described in this article was commissioned by All4Ed, a 501(c)3 nonprofit advocacy organization. The authors did not receive financial support from any firm or person for this article or, other than the aforementioned, from any firm or person with a financial or political interest in this article. The authors are not currently an officer, director, or board member of any organization with a financial or political interest in this article.

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