Examining Fund Distribution for Title I

Here at Ed Money Watch and the Federal Education Budget Project (FEBP) we are always working to better understand the distribution of federal education dollars to schools and districts. The Department of Education recently released a report that seeks to do just that for six federal education programs: Title I, Title II, Title III, Reading First, Perkins Vocational Education Grants, and Comprehensive School Reform (CSR).[1]

In general, the report gives a frank assessment of the degree to which federal programs effectively or ineffectively distribute funds to the schools and districts that most need them - those with large low-income populations. The most interesting findings pertain to Title I, the largest source of K-12 federal funding created to provide low-income, high need students with supplementary academic services.

The report suggests that Title I funding formulas do not effectively benefit high poverty schools, contradicting the program's stated goal. Title I is currently distributed through four different formulas: Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIGs). Although Targeted Grants and EFIGs allow for the most targeted distribution of funds, the majority of Title I funds flow through Basic Grants. Of those Basic Grant funds, only 47 percent appear to flow to districts in the highest poverty quartile. Between 56 and 58 percent of the funds distributed via the other three formulas flow to the highest poverty districts.

The report also finds/suggests that Title I funds are unevenly distributed across grade levels. Although middle and high schools serve 20 and 22 percent of poor students respectively, they receive only 14 and 10 percent of Title I funds respectively. In contrast, elementary schools receive 76 percent of funds while they serve 56 percent of poor students.

In terms of distribution of funds to high poverty schools and districts, the report found that while high poverty districts receive a larger share of federal and state dollars per student, they receive a significantly smaller share of local revenues compared to low poverty districts - a difference of $3,377 on average. Title I funds are not enough to make up for this disparity. Even after including an average of $6,478 in state funds and $1,449 in federal funds, high poverty districts still receive $811 less than low poverty districts per student.

Most surprising is the finding that high poverty schools receive less Title I funds per poor student than low poverty districts - $558 compared to $763. And the amount of Title I funds each high poverty school receives per low income student has remained relatively flat since 1997-98. This suggests that Title I formulas do not effectively distribute funds to districts with the most need. Because districts distribute Title I dollars to schools based on the number of low income students per school, low poverty districts are able to concentrate funds on their small number of poor students. In comparison, high poverty districts must spread their Title I funds across many high poverty schools and the poor students in them.

The report found that poor students in failing schools also receive less support from Title I. Title I schools identified as "In Need of Improvement" by No Child Left Behind receive less funding per pupil than Title I schools not identified as such.

The majority of Title I funds go to support instructional staff, adding an average of two teachers and one teachers aid per school. Title I dollars for instructional staff went farther in high poverty schools, adding 4.5 full time equivalent teachers, than at low poverty schools, which gained 1.7 full time equivalent teachers on average. While this may sound promising, a word of caution: this disparity is likely due to the lower salaries teachers in high poverty schools earn because they are less experienced and have fewer advanced degrees.

On the whole, the report suggests that Title I does not leverage its funds to benefit high poverty schools and districts. High poverty schools continue to receive less money per poor student than low poverty schools. And Title I funds do not close the funding gap perpetuated by disparities in local funding.

Distributing the majority of Title I funds through Basic Grants, instead of more targeted formulas, disadvantages low income schools and districts. These schools and districts educate nearly half of the poor student population and should be equipped to give them the additional services they need to succeed. Congress has an important opportunity to improve the targeting of Title I funds during the reauthorization of No Child Left Behind. We hope that they use this chance to improve the distribution of federal funds to students in high-poverty, high-need schools.

[1] The report is based on data from federal program allocations from FY 2004 appropriations for all 50 states, DC and Puerto Rico, and further fiscal data from a representative sample of 300 school districts and 1,483 schools from the 2004-05 school year. Data was compared to findings from a previous study conducted using 1997-98 data and NCES data from 2000-01. For the analysis, districts and schools were separated into poverty quartiles where districts in the highest poverty quartile served 49 percent of poor students.