Increasing Title I funds should target largest sources of school spending inequalities—across states

President Biden has proposed more than doubling funding for Title I, a federal block grant targeting low-income students, from $16.5 billion to $36.5 billion. This increase would be the largest in Title I’s 56-year history. Though this infusion of federal aid would certainly be welcome in schools, how can we ensure that it benefits the students that need it most?

Currently, Title I funding represents about 2% of K-12 education revenues nationally (based on spending data from the 2017-18 school year from the National Center for Education Statistics). Even if Title I funding was doubled, it would still only account for a small portion of overall education spending. Thus, for additional Title I funds to make meaningful reductions to spending inequalities, they will need to be well-targeted to meet existing needs and address funding gaps.

In a recent study, we examine which student demographic groups face the largest gaps in overall K-12 spending, where these gaps arise, and whether targeting additional Title I funds to schools, districts, or states is most promising for closing the gaps. (Note that in the data we report here, New York City Public School District is excluded from our analysis due to its large influence on our national gap estimates. In our study, we provide additional results comparing gap estimates with and without New York City.)

We use data from the National Center for Education Statistics, Civil Rights Data Collection, and National Education Resource Database to estimate inequalities by comparing funding allocated to Black versus white students, Hispanic versus white students, and economically disadvantaged versus economically advantaged students (based on eligibility for free or reduced-price lunch). We examine inequalities for these student subgroups for districts, states, and the nation as a whole. We offer our findings as guidance for how increased federal education funding can best meet the needs of public schools and close spending gaps that harm underserved students. (In a related Chalkboard post, we look at how much additional spending is needed to eliminate these inequalities and offer recommendations on strategically allocating additional Title I funds.)

NEW EVIDENCE ON THE SOURCES OF FUNDING INEQUALITIES

Funding inequalities can arise from a combination of factors and sources. For example, they could arise across districts within states (e.g., districts that enroll more Black students receive less funding than other districts in the same state). Within-state funding distributions are important to study because states set education funding formulas, which often provide additional aid to districts with lower property wealth and greater numbers of economically disadvantaged students. Allocating spending this way is likely to benefit economically disadvantaged students but may not benefit minoritized students.

Inequalities can also arise within districts (e.g., Black students receive less funding than white students in the same district). Though districts receive money from the state according to the state funding formula, schools with more high-income and white students are able to recruit and hire more experienced (and therefore costlier) teachers. Thus, schools serving more privileged students may incur higher expenses to cover teacher salaries, effectively siphoning district funds from more disadvantaged schools within the same district.

Finally, funding inequalities can arise nationally even if individual states are not distributing resources unequally. This national spending inequality can occur from a combination of factors: very large differences in spending across states, variation in how progressively states distribute spending, and relatively high concentrations of student subgroups in select states. For example, more than 45% of Hispanic students attend schools in California and Texas where per-pupil spending is more than $1,000 below the national average. Even if California and Texas spent more on Hispanic students relative to white students, Hispanic students could still receive less overall. (In reality, California spends about $600 more on Hispanic students relative to white students, and Texas spends about $150 less.)

The appropriate policy responses to funding inequalities depend on how and where those disparities arise. At the national level, federal policy can be a powerful tool to reduce spending differences across states.

Many of the above considerations are hypothetical. Our goal is to empirically describe spending gaps at the national, state, and district levels for multiple subgroups to test which hypotheses are true.

Figure 1 describes how overall spending is distributed across the country to Black compared to white students, Hispanic compared to white students, and to low- compared to higher-income students. Positive values—bars to the right of the $0 line—indicate progressive distributions, where more money is going to historically disadvantaged students.[1] We show these spending distributions across the nation, within states, and within districts.

The national results primarily reflect how much states spend on education and whether students belonging to certain subgroups live in higher- or lower-spending states or in states that are more or less progressive. The state analysis shows how much money, on average, states distribute to districts serving more disadvantaged students compared to districts serving more advantaged students. The district analysis shows how districts distribute funding to schools serving more disadvantaged students compared to schools serving more advantaged students. (Methodological details and additional results are available in our working paper.) Finally, the red bars in Figure 1 show these spending gaps including Title I revenues, whereas blue bars represent spending gaps without Title I (our data do not provide information about how districts distribute Title I funds, so we only include red bars for the district estimates).

Figure 1: Average differences in per-pupil spending between selected student subgroups, by level of distribution

Source: Lee, Hojung, Kenneth Shores, and Elinor Williams. (November 2021). The Distribution of School Resources in The United States: A Comparative Analysis Across Levels of Governance, Student Sub-groups, And Educational Resources. (EdWorkingPaper: 21-443). Retrieved from Annenberg Institute at Brown University: https://doi.org/10.26300/58f3-6v39

Figure 1 illustrates some important patterns:

• On a national scale, total education spending is distributed regressively across the country. Overall, economically disadvantaged and Black and Hispanic students receive less education funding than economically advantaged or white students. These inequalities are substantial: Black students receive almost $400 per pupil less than white students, and economically disadvantaged students receive $430 less than economically advantaged students. For Hispanic students, the national gap is particularly stark: Hispanic students receive over a thousand dollars less per pupil than white students.
• Title I plays an important but inadequate role in reducing national K-12 spending disparities. Without Title I, national K-12 spending gaps would be even larger, by about $100-$200, than what we see currently.
• At the state level, Black and economically disadvantaged students receive about $300 to $400 more than white and economically advantaged students. Hispanic students receive no more funding on average than white students.
• Districts, on average, tend to distribute funds progressively, allocating more funding to schools serving more Black, Hispanic, and economically disadvantaged students relative to white and economically advantaged students.

These estimates show that most education spending inequity exists nationally, across states. In other words, it arises primarily from Black, Hispanic, and economically disadvantaged students residing disproportionally in states with lower overall funding and/or less progressive funding. Although Title I reduces these national inequalities, they remain large—in the case of Hispanic students, very large—even when Title I funds are factored in. States and districts, for the most part, distribute funding progressively, and Title I funds make these distributions more progressive. Again, Hispanic students see the least equitable spending distributions: they receive no more money than white students within states, and only moderately more within districts.

Two inequalities, in particular, call for a strong policy response.

First, at the state level, Hispanic students are not benefiting from current provisions in state funding formulas. Though Black and economically disadvantaged students receive more total spending than white and economically advantaged students, Hispanic students receive no additional per-pupil funding than white students on average.

Second, at the national level, Black, Hispanic, and economically disadvantaged students receive substantially less—on the order of $400 to $1,200—in total spending per pupil than white and economically advantaged students.

Resolving these inequalities in educational spending demands state and federal responses. At the state level, gaps in funding for Hispanic students have not been widely documented, and changes to funding formulas that target ethnicity directly are unlikely. Additional aid to English language learners and block grants to regions (e.g., rural areas) where Hispanic students primarily attend schools represent potential policy options that may be able to surmount political challenges.

Given that Title I revenues partially offset current K-12 spending gaps, the Biden administration’s proposal to expand Title I to $36.5 billion represents a real opportunity to remedy national spending inequality. Targeting Title I funds more directly to economically disadvantaged students would further reduce spending disparities. A critical question we take up in a related Chalkboard post is how much additional spending is needed to eliminate the inequalities we document here.

[1] This figure plots average differences in per-pupil spending between Black and white students, Hispanic and white students, and students qualifying for free or reduced-price lunch (FRL) and students not qualifying. Average differences are reported for three levels of governance: district represents differences in spending across schools within districts; state represents differences in spending across districts within states; nation represents differences across all districts. Dollars are adjusted to be in 2017-18 dollars and by the 2017-18 comparable wage index for teachers. Estimates excluding Title I are only available for the state and nation, as Title I contributions are not available at the school level. (Back to top)