Elementary and Secondary Education Act: An Analytical Review of the Allocation Formulas

Elementary and Secondary Education Act:
An Analytical Review of the Allocation Formulas
October 23, 2008
Wayne C. Riddle and Rebecca R. Skinner
Specialists in Education Policy
Domestic Social Policy Division

Elementary and Secondary Education Act:
An Analytical Review of the Allocation Formulas
Summary
The Elementary and Secondary Education Act (ESEA) contains 45 separately
authorized programs, plus approximately 20 specified sub-programs. The largest of
these programs distribute funds by formulas that prescribe how funds are to be
allocated among state educational agencies (SEAs) or local educational agencies
(LEAs) nationwide. They take the form of mathematical equations through which
the U.S. Department of Education (ED), and in many cases also SEAs, calculate
grant amounts for each potential grantee meeting statutory eligibility criteria. They
almost always include one or more population factors and may also include state or
LEA minimum grant provisions, eligibility thresholds, expenditure factors, fiscal
accountability provisions, and reservations of funds for a variety of purposes.
The recipients of a majority of the funds under almost all ESEA formula grant
programs are LEAs. Under most of these programs, grants are provided to LEAs via
SEAs: that is, they are “state-administered formula grant” programs. Funds are
allocated by ED directly to LEAs only under a limited number of ESEA programs.
The most influential ESEA allocation formulas are those under the Title I-A program,
both because this is the largest ESEA program and because there are five ESEA
programs under which grants are made, in part or in full, in proportion to grants
calculated under Title I, Part A. As a result, a majority of ESEA funds are allocated
under formulas in which the primary population factor is school-age children in poor
families, and state expenditure factors are applied.
The share of all public K-12 education revenues that is provided under ESEA
programs varies substantially among the states, although ESEA funding constitutes
only approximately one-tenth or less of total public K-12 education revenues in all
cases except Puerto Rico. The average ESEA program grant per school-age child
(poor and non-poor) increases as the state average poverty rate rises, with the third
of states having the highest poverty rates receiving 1.4 times as much as low poverty
states. At the same time, an opposite trend is found in average ESEA grants per
school-age child in a poor family, with low poverty states receiving 1.3 times as
much as states with the highest poverty rates.
Most ESEA allocation formulas include state or LEA minimum grant
provisions. As a result, states with the smallest school-age population receive
approximately 1.7 times as much as the remaining states per school-age child, and
approximately 2.2 times as much per school-age child from a poor family.
This report will be updated if substantial changes are made in one or more
ESEA program allocation formulas.

Contents
In troduction ......................................................1
General ESEA Formula Grant Characteristics............................3
Individual ESEA Program Formulas..................................18
Title I, Part A: Education for the Disadvantaged.....................18
Basic Grants.............................................19
Concentration Grants......................................23
Targeted Grants..........................................24
Education Finance Incentive Grants (EFIG)....................28
ESEA Title I-A School Improvement Grants...................33
Title I, Part B, Subpart 1: Reading First...........................34
Title I, Part B, Subpart 3: William F. Goodling Even Start Family
Literacy Programs........................................35
Improving Literacy Through School Libraries.......................36
Title I, Part C: Migrant Education Program........................37
Title I, Part D: State Agency Neglected, Delinquent, or At-Risk
Program ................................................40
Title I, Part F: Comprehensive School Reform......................42
Title I, Part G: Advanced Placement Programs.....................42
Title I, Part H: School Dropout Prevention.........................42
Title II, Part A: Teacher and Principal Training and Recruiting Fund....42
Title II, Part B: Mathematics and Science Partnerships...............46
Title II, Part D: Education Technology State Grants.................47
Title III-A, English Language Acquisition State Grants...............50
Title IV, Part A: Safe and Drug-Free Schools and Communities........53
Title IV, Part B: 21^st Century Community Learning Centers...........55
Title V, Part A: Innovative Programs.............................56
Title VI, Part A, Subpart 1: State Assessment Grants................58
Title VI, Part B, Subpart 1: Small, Rural School Achievement Program..59
Title VI, Part B, Subpart 2: Rural and Low-Income School Program....61
Title VII, Part A, Subpart 1: Indian Education Formula Grants to
Local Educational Agencies.................................63
Title VIII (Section 8003(b)): Impact Aid, Payments for Federally
Connected Children: Basic Support Payments..................64
Title VIII (Section 8003(d)): Impact Aid, Payments for Federally
Connected Children: Payments for Children with Disabilities......68
Title VIII (Section 8007): Impact Aid, Construction Payments.........69
Analyses ........................................................71
ESEA Allocations, and Total Federal Funds, Compared to Total
Revenues From All Sources for Public K-12 Education...........71
State Expenditure and Effort Factors and Equity Multiplier............74
Expenditure Factor........................................74
Effort Factor.............................................78
Equity Factor and Multiplier................................80
State Population Size..........................................83

Rates ...................................................86
List of Figures
Figure 1. ESEA and Total Federal Share of Public K-12 Education
Revenues ...................................................74
Figure 2. State Expenditure Factor for ESEA Title I-A (3 Formulas)........77
Figure 3. Effort Factors for the Title I-A EFIG Formula, FY2007...........80
Figure 4. State Equity Multipliers for the Title I-A EFIG Formula,
FY2007 ....................................................82
Figure 5. ESEA Grants Per Child to States Sorted by Population Size.......86
Figure 6. ESEA Grants Per Child by State Poverty Rate..................89
List of Tables
Table 1. Level of Grantee and Level at Which Grants Are Calculated by ED
Under ESEA Formula Grant Programs.............................8
Table 2. Primary Population Factors..................................10
Table 3. Non-Title I, Part A Programs Under the ESEA Where Grants Are
Made, At Least in Part, on the Basis of Title I-A Grants to LEAs.......11
Table 4. ESEA Formulas With Expenditure Factors, Either Direct or
Indirect .....................................................12
Table 5. Minimum or Hold Harmless Grant Amounts for States and LEAs...13
Table 6. Maximum SEA and LEA Reservations for Administration,
Evaluation, Technical Assistance................................14
Table 7. Reservations for Outlying Areas, Bureau of Indian Affairs,
National Programs, and Evaluation and Technical Assistance..........15
Table 8. Fiscal Accountability Requirements...........................17
Table 9. Funding Thresholds for Transition From Competitive to Formula
Grants ......................................................18
Table 10. Weights Applied to Counts of Population Factor Children
in the Calculation of ESEA Title I-A Targeted Grants................26
Table 11. Weights Applied to Counts of Population Factor Children
in the Calculation of LEA Grants Under the ESEA Title I-A Education
Finance Incentive Grant Formula.................................30
Table 12. Weights Applied to Specific Categories of Federally Connected
Children (Section 8003(a)(1))...................................65
Table 13. ESEA Allocations, and Total Federal Source Revenues, as a
Percentage of Total Revenues From All Sources for Public Elementary
and Secondary Education, 2005-2006.............................72
Table 14. ESEA Title I-A Expenditure Factors, FY2007..................76
Table 15. ESEA Title I-A Effort Factor, FY2007........................78
Table 16. ESEA Title I-A Equity Multiplier, FY2007....................81
Table 17. Total ESEA Grants Per Child for FY2007, States Ranked by Their
Total Number of School-Age Children............................84
Table 18. ESEA Formula Grants Per Child, FY2007, for States Sorted by
Their School-Age Child Poverty Rate.............................87

Elementary and Secondary Education Act:
An Analytical Review of the
Allocation Formulas
Introduction
The primary source of federal aid to K-12 education is the Elementary and
Secondary Education Act (ESEA), particularly its Title I, Part A program of
Education for the Disadvantaged.¹ The ESEA was initially enacted in 1965 (P.L. 89-
10) and was most recently amended and reauthorized by the No Child Left Behind
Act of 2001 (NCLB, P.L. 107-110). ESEA programs are explicitly authorized
through FY2007, although they were automatically extended for one additional year,
through FY2008, when Congress did not act upon reauthorization legislation by
December 31, 2005.² The 110^th Congress has considered proposals to amend and
extend the ESEA, although it appears likely that ESEA reauthorization will again be
on the agenda of the 111^th Congress.
The NCLB initiated a major expansion of federal influence on several aspects
of public K-12 education, primarily with the aim of increasing the accountability of
public school systems and individual public schools for improving achievement
outcomes of all pupils, especially the disadvantaged. States that receive grants under
ESEA Title I-A must implement in all public schools and school districts a variety
of standards-based assessments in reading, math and science; make annual adequate
yearly progress (AYP) determinations for each public school and local educational
agency (LEA); and require virtually all public school teachers and aides to meet a
variety of qualification requirements. State AYP policies must incorporate an
ultimate goal of all public school pupils reaching a proficient or higher level of
achievement in reading and mathematics by the end of the 2013-2014 school year.
Further, states participating in ESEA Title I-A must enforce a series of increasingly
substantial consequences for most of their schools and almost all school districts that
fail to meet the AYP standards for two consecutive years or more.
Major ESEA programs other than Title I-A provide grants to support the
education of migrant students; recruitment of and professional development for

¹ Richard N. Apling, a retired Specialist in Education Policy, also contributed to this report.
² The General Education Provisions Act (GEPA) provides that “The authorization of
appropriations for, or duration of, an applicable program shall be automatically extended for
one additional fiscal year unless Congress, in the regular session that ends prior to the
beginning of the terminal fiscal year of such authorization or duration, has passed legislation
that becomes law and extends or repeals the authorization of such program.” (20 USC

1226a)

teachers; language instruction for limited English proficient (LEP) students; school
safety and drug abuse prevention programs; after-school instruction and care;
expansion of charter schools and other forms of public school choice; education
services for Indian, Native Hawaiian, and Alaska Native students; Impact Aid to
compensate LEAs for taxes foregone due to certain federal activities; and a wide
variety of innovative educational approaches or instruction to meet particular student
needs.
The ESEA contains 45 separately authorized programs, plus approximately 20
specified sub-programs. The methods by which federal funds are provided to
grantees under these programs fall into five general categories:
^!programs under which federal funds are allocated by the U.S.
Department of Education (ED) to states, as well as to all or most
LEAs via one or more formulas specified in the ESEA (example:
ESEA Title I, Part A, Education for the Disadvantaged);
^!programs under which federal funds are allocated by ED to states via
a statutory formula, while state educational agencies (SEAs)
suballocate these funds either on a competitive or discretionary
basis, or via a state-developed allocation formula consistent with
general statutory guidance (example: ESEA Title IV, Part B, 21^st
Century Community Learning Centers);
^!programs under which federal funds are allocated by ED directly to
LEAs via formulas specified in the ESEA (example: ESEA Title
VIII, Impact Aid);
^!programs under which federal funds are allocated by ED to state
and/or local grantees on a competitive or discretionary basis
(example: ESEA Title V, Part D, Subpart 6, Gifted and Talented
Students); and
^!programs under which federal funds are allocated by ED to a single
eligible grantee specified in the ESEA (example: ESEA Title II, Part
C, Subpart 2, National Writing Project).
ESEA allocation formulas are mechanisms established through statute or other
official policy documents that define how appropriated funds are to be allocated
among SEAs or LEAs nationwide. They take the form of mathematical equations
through which ED, and possibly also SEAs, calculate specific grant amounts for each
potential grantee meeting statutory eligibility criteria. They almost always include
one or more population factors, but typically include a number of additional factors.
This report discusses and analyzes the current allocation formulas for ESEA
programs in the first three categories listed above. It provides the following:
(1) a description of general categories of factors used in the ESEA’s allocation
formulas;

(2) descriptions of each program’s formula(s); and
(3) analyses of general patterns and issues related to these formulas.
Other CRS reports provide more detailed discussions and analyses of the
allocation formulas of major individual ESEA programs.³
This report will be updated infrequently, when major changes occur in ESEA
program allocation formulas.
General ESEA Formula Grant Characteristics
It is important to understand the vocabulary commonly applied to federal K-12
education allocation formulas. Therefore, an explanation of key terms precedes the
discussion of the ESEA formulas.
^!Level of Recipient Entity and Level at Which Grants Are
Calculated by ED. Under most ESEA formula grant programs,
grants are made to LEAs via the SEAs. If LEAs are the ultimate
grantees in a state formula grant program, the ESEA program may
provide for substate distribution of grants by SEA-administered
competition, through a statutory substate allocation formula
directing SEAs how to determine LEA grants or, less frequently,
through a statutory LEA-level formula with grants calculated by ED
itself but distributed to LEAs by SEAs (with limited options for
SEAs to adjust the LEA grants as calculated by ED). Under a few
ESEA formula grant programs, LEA grants are calculated and
directly allocated by ED (e.g., Impact Aid).
^!Formula Factors. Allocation formulas have one or more factors
that target funds to SEAs, LEAs, or other entities to accomplish or
facilitate some policy outcome. For example, a program aiming to
serve children from poor families would have a formula based on
estimated numbers of school-age (5-17 years) children in poor
families. In a simple formula, each state would be allocated funds
in proportion to the estimated number of such children living in that
state: that is, a state’s proportion is obtained by dividing its number
of school-age children in poor families by the total number of such

³ See the following reports for more detailed descriptions of selected ESEA program
allocation formulas: CRS Report RL33731, Education for the Disadvantaged:
Reauthorization Issues for ESEA Title I-A Under the No Child Left Behind Act, by Wayne
C. Riddle; CRS Report RL34119, Impact Aid for Public K-12 Education: Reauthorization
Under the Elementary and Secondary Education Act, by Rebecca R. Skinner; CRS Report
RL33804, Rural Education and the Rural Education Achievement Program (REAP):
Overview and Policy Issues, by Jeffrey J. Kuenzi; and CRS Report RL34066, English
Language Acquisition Grants Under the No Child Left Behind Act: Analysis of State Grant
Formula and Data Options, by Rebecca R. Skinner.

children nationwide. For example, if 14% of all school-age children
in poor families live in California, this simple formula would
allocate 14% of all state grant funds to California. A formula can
include more than one population factor, and it can weight the
factors differently. For example, a formula could distribute 50% of
funds based on total school-age population and 50% based on
school-age children in poor families.
^!Population Factor. The most common allocation formula factor is
a population factor. Almost all federal K-12 education program
allocation formulas include such a factor. The most common
population factors are school-age children in poor families and total
school-age children. In addition, several ESEA programs allocate
funds on the basis of a population factor that is specifically related
to the program’s purpose, such as Indian pupils, migratory children,
or children whose parents live or work on federal property. Usually,
a population factor is direct, but sometimes it is indirect. For
example, if a program allocates grants in proportion to grants made
under ESEA Title I-A, this provision indirectly incorporates the Title
I-A formulas’ population factors (primarily school-age children in
poor families).
^!Title I-A Grant Factor. Many ESEA programs allocate some or all
of their funds in proportion to grants made under the largest ESEA
program — aid for the Education of the Disadvantaged under Title
I, Part A. For example, grants under ESEA Title II, Part D,
Education Technology, are made in proportion to Title I-A grants
(subject to a higher state minimum grant provision than under Title
I-A). Thus, grants calculated under Title I-A become an allocation
factor for several other programs.
^!Eligibility Threshold. Many ESEA programs require LEAs to meet
population factor thresholds in order to be eligible to receive grants.
For example, under the Title I-A Concentration Grant allocation
formula, LEAs must meet either of two population factor eligibility
thresholds: (1) 6,500 population factor children (mostly school-age
children in poor families) or (2) a population factor child percentage
(population factor children divided by total school-age population)
of 15%, in order to receive grants.
^!Expenditure Factor. Several ESEA program allocation formulas
include an expenditure factor. These are based on state or (less
frequently) LEA average per pupil expenditure for public K-12
education. Expenditure factors are intended to adjust for state or
local differences in the costs of providing public K-12 education,
although they are often criticized as reflecting differences in ability
to pay for educational services as well. In most cases, floors and
ceilings, based on percentages of the national average, are applied to
this factor (e.g., a floor of 80% and a ceiling of 120% of the national
average per pupil expenditure). Usually, an expenditure factor is

direct, but sometimes it is indirect. For example, if a program
allocates grants in proportion to grants made under ESEA Title I-A
(see above), this provision indirectly incorporates the Title I-A
formulas’ expenditure factors.
^!Hold Harmless. Some formulas establish a minimum state or LEA
grant equal to a specified percentage of the amount received in a
previous year. Usually, this is the immediately preceding year,
although sometimes it is a “base year” that may be several years in
the past. The minimum percentage may be the full amount received
in the previous year (i.e., 100%) or, more often, some lesser
percentage (e.g., 85%). Raising a state or LEA to its hold harmless
level almost always reduces grants to other states or LEAs that do
not benefit from the hold harmless. Hold harmless amounts are only
guaranteed if funds are sufficient to pay for them. If not, hold
harmless amounts are ratably reduced (see below) to meet the level
of the appropriation. Further, in almost all cases, hold harmless
provisions only apply to grantees meeting program eligibility criteria
for the current year, not necessarily every grantee that received a
grant in the preceding year.⁴
^!Foundation Grant. Under some ESEA programs, each state or LEA
first receives a “foundation grant” amount, then additional
appropriations, if any, are allocated on the basis of a population and
possibly other formula factors. If funds are insufficient to pay the
full foundation grant amount, then each grantee receives an equal
proportion of its foundation grant. The foundation grant may be an
equal amount per grantee (e.g., $3 million per state) or, more often,
it is the amount received in a base year under one or more antecedent
programs. The latter usually occurs when two or more programs are
consolidated into one new program in a reauthorization of the
ESEA.
^!Minimum State Grant. In addition to hold harmless amounts (see
above), which are always expressed in terms of a percentage of a
previous year grant, several programs have a state minimum grant
expressed primarily in terms of a percentage of all allocations to
states or as a fixed dollar amount per state. Such minimum grant
provisions are aimed at providing what advocates argue is a
minimum ‘viable’ grant to all states. State minimums are set at a
percentage of total state grants (typically 0.25%, 0.35%, or 0.5%).
Occasionally, they are fixed dollar amounts (e.g., $500,000) or the

⁴ For example, the ESEA Title I-A Targeted Grant allocation formula has eligibility
thresholds of 10 children counted in the Title I-A population factor (primarily school-age
children in poor families) and a 5% population factor child rate. If an LEA should meet
these criteria and receive a Targeted Grant in year 1 but fall below one of the thresholds in
year 2, it would receive no funds in year 2, even though the Targeted Grant formula includes
a LEA hold harmless of at least 85% of preceding year grants.

greater (or lesser) of a fixed amount or a percentage of the total. In
some cases, one or more “caps” may be placed on these minimums
(e.g., a state minimum might be 0.25% of total state grants, subject
to a cap of 150% of the national average grant per population factor
child multiplied by the state total number of such children). When
applying the minimum, the money to increase grants to relatively
low population states that would otherwise receive less than the
minimum amount comes from all other states, which would see their
initial grants ratably reduced.
^!Ratable Reduction or Ratable Increase. This is the process of
either reducing or increasing grants as initially calculated in order to
adjust for the level of available appropriations or application of
certain formula factors, such as a state minimum or LEA hold
harmless. These reductions or increases are applied in proportion to
initial grants (i.e., they are “ratable”). For example, raising certain
states to minimum grant amounts requires that funds be redistributed
from states with initial grants above the minimums. Ratable
reduction reduces funds in proportion to their initial grants for states
above minimum levels and redistributes these funds to states with
initial grants below minimum levels. When ratable reduction
occurs, all states (or LEAs) above the minimum have their initial
grants reduced by the same percentage, resulting in different dollar
amount changes. Similar processes of ratable reduction occur in the
application of hold harmless provisions.
^!Fiscal Accountability Requirements. Most ESEA programs
include one or more of three types of fiscal accountability
requirements. These are intended to assure that federal funds
provide a net increase over state and local funds devoted to K-12
education. The two most common ESEA fiscal accountability
requirements are (1) maintenance of effort: recipients must provide,
from state and local sources, a level of funding (either aggregate or
per pupil) in the preceding year that is equal to at least some
specified percentage (usually 90%) of the level in the second
preceding year;⁵ and (2) funds must be used so as to supplement, and
not supplant, state and local funds that would otherwise be available
for the same purpose as under the ESEA program in question. A
third type of fiscal accountability requirement, comparability,
applies only to Title I, Parts A, C, and D: services provided with
state and local funds in schools participating in Title I-A must be
comparable to those in non-Title I-A schools of the same LEA.

⁵ If a state fails to expend the requisite level of funds, the ESEA program is reduced
according to the proportion by which the required level (90% of the preceding year) is
missed.

^!Treatment of Puerto Rico, Outlying Areas, and the Bureau of
Indian Affairs⁶. ESEA programs usually distribute funds by
formula only to the 50 states, the District of Columbia, and Puerto
Rico (the latter two entities are defined as ‘states’ for the purposes
of program formulas). Other entities usually receive funds from
amounts that are reserved from the total appropriation. These set-
asides can include funds for the Outlying Areas (American Samoa,
Guam, Commonwealth of the Northern Marianas, and the U.S.
Virgin Islands), and funds provided to the Bureau of Indian Affairs
(BIA) for services to certain Indian students. Typically, a total of

1% of program appropriations is reserved for these entities.

^!Other Reservations from Appropriations. Under many programs,
before remaining funds are allocated to states, a portion of
appropriations is also reserved for such national activities as
competitive grants, program evaluation, research, or technical
assistance related to the overall program.⁷
^!Further Adjustments by SEAs of LEA Grants as Calculated by
ED. Many state grant formulas permit states to reserve a proportion
of their total grant for state level activities. These activities include
state administration of the program together with statewide services,
such as technical assistance and program evaluation, aimed at
assisting and improving the implementation of the program. Under
Title I-A, states are required to reserve 4% of state grants (subject to
certain limitations described later in this report) for school
improvement activities. A typical total state set-aside might be 5%
of the state grant, with no more than 1% of the grant (i.e., 20% of the
set-aside)⁸ for administration and 4% for other state activities.
The following Tables 1-9 summarize the provisions of ESEA allocation
formulas with respect to many of the formula factors or provisions discussed above.
As illustrated in Table 1, the recipients of a majority of the funds under almost
all ESEA formula grant programs are LEAs. Under most of these programs, grants
are provided to LEAs via SEAs: that is, they are “state-administered formula grant”
programs. Funds are allocated by ED directly to LEAs only under a limited number
of ESEA programs.

⁶ The ESEA statute refers to the Bureau of Indian Affairs (BIA). However, in practice, the
BIA has been superseded by the Bureau of Indian Education (BIE).
⁷ The ESEA includes, in Section 9601, a general authorization for the U.S. Secretary of
Education to reserve up to 0.5% of appropriations under any ESEA programs, except those
under Titles I and III, for program evaluations (if such a reservation is not separately and
explicitly authorized). This authority is exercised on occasion.
⁸ Some authorizing statutes specify that the administrative set-aside may be the larger of a
dollar amount or a percentage of the grant. Such provisions aim to ensure that
administrative funds for smaller states are “sufficient” to administer the program.

Within states, either (a) funds are allocated to LEAs under formulas that are
specified in the ESEA, but are actually calculated by SEAs, or (b) funds are
distributed on a competitive or discretionary basis within states. Title I-A is the only
ESEA program under which funds are allocated via SEAs, but grants are calculated
by ED at the LEA level. Even under Title I-A, SEAs make a number of authorized
adjustments to initial LEA grants as calculated by ED.
Table 1. Level of Grantee and Level at Which Grants Are
Calculated by ED Under ESEA Formula Grant Programs
Level at Which
Primary Recipient of GrantsGrants AreCalculated by
ProgramED
SEALEA viaSEALEADirectlySEALEA
Title I-A: Education for theXX
Disadvantaged (all
formulas)
Title I-A: SchoolXX
Improvement Grants
Title I-B-1: Reading FirstXX
Title I-B-3: Even StartXX
Title I-C: MigrantXX
Education
Title I-D: Neglected or
Delinquent
Title II-A: ImprovingXX
Teacher Quality
Title II-B: Mathematics and
Science Partnerships
Title II-D: EducationXX
Technology
Title III-A: English
Language Acquisition
Title IV-A: Safe and Drug-XX
Free Schools and
Communities
Title IV-B: 21^st CenturyXX
Community Learning
Centers
Title V-A: InnovativeXX
Programs
Title VI-A-1: State
Assessment Grants
Title VI-B-1: Small, RuralXX

School Achievement

Level at Which
Primary Recipient of GrantsGrants AreCalculated by
ProgramED
SEALEA viaSEALEADirectlySEALEA
Title VI-B-2: Rural andXX
Low-Income School
Program
Title VII-A-1: IndianXX
Education
Title VIII: Impact Aid
Basic Support Payments
Title VIII: Impact AidXX
Payments for Children With
Disabilities
Title VIII: Impact AidXX
Construction
As indicated in Table 2, in terms of numbers of programs in each category
(without regard to program size), ESEA formula grant programs fall relatively evenly
into three groups: (a) programs where the primary population factor is school-age
children in poor families (either directly or indirectly), (b) programs under which the
primary population factor is a measure of total school-age population; and (c)
programs with a primary population factor that is specifically related to the program’s
purpose (e.g., Indian children and youth for the Title VII-A-1 Indian Education
program). The programs where school-age children in poor families are the indirect
primary formula factor are those where all or part of funds are allocated in proportion
to grants under ESEA Title I-A. Two programs, Improving Teacher Quality (Title
II-A) and Safe and Drug-Free Schools and Communities (Title IV-A), have both (a)
and (b) as primary population factors. In terms of funding, given the relative size of
Title I-A, as well as the number of other programs with allocations linked to those
under Title I-A, a majority of ESEA funds are allocated under programs where
school-age children in poor families are the primary population factor.
Note that all ESEA formula grant programs are included in Tables 1 and 2,
above. The remaining tables in this section include only the ESEA formula grant
programs that are relevant to the specific topic of the table.

Table 2. Primary Population Factors
^Pri^m^{ary Pop}^u^l^ati^oⁿ^Factor
^S^c^h^ool^-A^ge^S^c^h^ool^-A^ge^To^t^a^{l Scho}^o^l^-^Program
^Program^{Children in}^Poor^{Children in}^Poor^Ag^{e P}^o^pula^t^io^n,^Specific
^Fa^m^ilies:^Fa^m^ilies:^Eⁿ^rollm^{ent, or}^At^t^e^nda^nce^P^o^pula^t^ioⁿ^Gr^o^u^p
^Directly^I^ndirectly
Title I-A: Education forX
the Disadvantaged (all
formulas)
Title I-A: SchoolX
Improvement Grants
Title I-B-1: Reading FirstX
Title I-B-3: Even StartX
Title I-C: MigrantX
Education
Title I-D: Neglected orX
Delinquent
Title II-A: ImprovingXX
Teacher Quality
Title II-B: MathematicsX
and Science Partnerships
Title II-D: EducationX
Technology
Title III-A: EnglishX
Language Acquisition
Title IV-A: Safe and Drug-XX
Free Schools and
Communities
Title IV-B: 21^st CenturyX
Community Learning
Centers
Title V-A: InnovativeX
Programs
Title VI-A-1: StateX
Assessment Grants
Title VI-B-1: Small, RuralX
School Achievement
Title VI-B-2: Rural andX
Low-Income School
Program
Title VII-A-1: IndianX
Education
Title VIII: Impact AidX
Basic Support Payments
Title VIII: Impact AidX

Payments for Children
With Disabilities

^Pri^m^{ary Pop}^u^l^ati^oⁿ^Factor
^S^c^h^ool^-A^ge^S^c^h^ool^-A^ge^To^t^a^{l Scho}^o^l^-^Program
^Program^{Children in}^Poor^{Children in}^Poor^Ag^{e P}^o^pula^t^io^n,^Specific
^Fa^m^ilies:^Fa^m^ilies:^Eⁿ^rollm^{ent, or}^At^t^e^nda^nce^P^o^pula^t^ioⁿ^Gr^o^u^p
^Directly^I^ndirectly
Title VIII: Impact AidX
Construction
As listed in Table 3, there are five ESEA programs under which grants are
made, in part or in full, on the basis of LEA grants calculated under Title I, Part A.
Four of these programs base allocations on total Title I-A grants, whereas the fifth
uses Title I-A Concentration Grants only. In calculating grants under such programs
outside of Title I-A, the Title I-A LEA hold harmless provision is not to be applied
to the Title I-A grants upon which allocations are based.
Table 3. Non-Title I, Part A Programs Under the ESEA Where
Grants Are Made, At Least in Part, on the Basis of Title I-A
Grants to LEAs
Linkage to Title I-A
Grants
ProgramTotalTitle I-A
Title I-AConcentration
GrantsGrants Only
Title I-A: School Improvement GrantsX^a
Title I-B-3: Even StartX
Title II-D: Education TechnologyX
Title IV-A: Safe and Drug-Free Schools andX
Communities
Title IV-B: 21^st Century Community Learning CentersX
^{a. T}^{itle I-}^A^Sch^{ool Im}^prov^em^en^t^Gran^ts^are^m^a^de^{to s}^t^atesⁱⁿ^proportion^to^th^e^{total of}^g^r^an^ts^uⁿ^d^er
^T^{itle I}^,^P^a^r^t^{s A}^,^{C an}^d^D.
Only the ESEA formula grant programs listed below in Table 4 include an
expenditure factor, either directly or indirectly (i.e., as a result of allocating funds in
proportion to grants under Title I-A). Under the Title I-A formulas (and by
extension, the other formulas based on Title I-A grants), Title I-C, Title I-D, and the
Title VII-A-1 Indian Education program, the expenditure factor is based on state
average per pupil expenditure for public K-12 education, after applying a floor and
ceiling (in the case of Indian Education, a floor only) on the basis of the national
average per pupil expenditure. The Title VIII Impact Aid programs employ an
expenditure factor (local contribution rate) that in most cases is either one-half of the

state average per pupil expenditure or one-half of the national average per pupil
expenditure.
Table 4. ESEA Formulas With Expenditure Factors,
Either Direct or Indirect
Formulas With
ProgramExpenditure Factors
DirectIndirect
Title I-A: Education for the Disadvantaged (all formulas)X
Title I-A: School Improvement GrantsX
Title I-B-3: Even StartX
Title I-C: Migrant EducationX
Title I-D: Neglected or DelinquentX
Title II-D: Education TechnologyX
Title IV-A: Safe and Drug-Free Schools and CommunitiesX
Title IV-B: 21^st Century Community Learning CentersX
Title VII-A-1: Indian EducationX
Title VIII: Impact Aid Basic Support PaymentsX
ESEA formula grant programs that have minimum or hold harmless provisions
at either the state or LEA level are listed in Table 5. State minimum grant provisions
are applied to several programs; they range from up to 0.25% of total grants to states
with respect to appropriations equal to or below the FY2001 funding level for Title
I-A Basic and Concentration Grants, to 0.5% of the total amount available for state
grants under several programs. In general, state minimum grant provisions
(expressed as a percentage of total state grants) are more common than hold harmless
provisions (expressed as a percentage of grants for a previous year) in the ESEA.
Only the Title I-A formulas have LEA hold harmless provisions (minimum
percentages of the previous year grant, if sufficient funds are available and eligibility
thresholds are met where applicable), while only the Safe and Drug-Free Schools and
Communities program has a state level hold harmless (which is not currently fully
met).

Table 5. Minimum or Hold Harmless Grant Amounts
for States and LEAs
StateLEA
MinimumMinimum
P r ogram and/ or and/ or
HoldHold
Harmless Harmless
Title I-A: Education for the Disadvantaged: Up to^a
Basic and Concentration Grants0.25% of
total grants85%, 90%,
equal to oror 95% of
belowprevious
FY2001year,
level, up todepending
0.35% ofon the
grants aboveLEA’s
FY2001formula
child — Targeted and Education Finance Incentive GrantsUp to 0.35%of total
percentagegr a n t s
Title I-A: School Improvement Grantsindirect —
Title I-B-1: Reading First0.25% of —
total grants
Title I-B-3: Even StartGreater of —
$250,000 or
0.5% of
total grants
Title II-A: Improving Teacher Quality0.5% of —
total grants
Title II-B: Mathematics and Science Partnerships0.5% of —
total grants
Title II-D: Education Technology0.5% of —
total grants
Title III-A: English Language Acquisition$500,000 —
Title IV-A: Safe and Drug-Free Schools andGreater of —
Communities0.5% or
FY2001
amount
Title IV-B: 21^st Century Community Learning Centers0.5% of —
total grants
Title V-A: Innovative Programs0.5% of —
total grants^b
Title VI-A-1: State Assessment Grants —
^a^.^In^cas^es^w^h^{ere th}^{e s}^t^{ate m}ⁱⁿⁱ^m^u^m^is^“^u^{p to” s}^o^m^e^s^p^ecifⁱ^{ed percen}^tag^e^of^{total s}^t^{ate g}^r^aⁿ^t^s^,^t^h^e
^f^o^rm^u^l^{a i}ⁿ^cl^u^d^es^on^e^or^m^o^re^“^caps^”^(e.g^.,^{a cei}^lⁱⁿ^g^of^150%^of^t^h^{e n}^a^tⁱ^oⁿ^a^l^av^erag^{e g}^r^an^t^per
^ch^{ild cou}ⁿ^t^{ed in}^th^{e allo}^cation^f^o^rm^u^l^{a) th}^{at m}^a^y^prev^en^{t th}^{e s}^m^alles^t^s^t^ates^f^r^om^receivⁱⁿ^g^th^e
^f^u^l^l^miⁿⁱ^mu^m.
^b^.^A^ltho^{ugh ther}^{e is no}^{state m}ⁱ^nim^u^m^,^{each state f}ⁱ^r^s^{t r}^{eceives a f}^o^und^atio^{n gr}^{ant o}^f^$³^m^illio^n.

Several of the ESEA formula grant programs include provisions allowing SEAs
to reserve a limited percentage of state total grants for administration, evaluation, and
technical assistance. Maximum reservations for these specific activities range from
approximately 1% for Title I-A to 5% under a number of other ESEA programs. As
noted in Table 6, some programs have maximum reservation percentages above 5%,
but these funds are to be used for a variety of activities in addition to administration,
evaluation, and technical assistance, such as statewide competitive grant programs.
Limits on the use of funds by LEAs for administration, evaluation, and technical
assistance occur only with respect to four ESEA programs, with limits ranging from

2% to 5%.

Table 6. Maximum SEA and LEA Reservations for
Administration, Evaluation, Technical Assistance
Maximum Reservation
for Administration,
ProgramEvaluation, and
Technical Assistance
SEALEA
Title I-A: Education for the Disadvantaged (all formulas)1% or^a —
$400,000
Title I-A: School Improvement Grants5% —
Title I-B-1: Reading First20%^b3.5%
Title I-B-3: Even Start6%^b —
Title I-C: Migrant Education1% or^a —
$400,000
Title I-D: Neglected or Delinquent1% or^a —
$400,000
Title II-A: Improving Teacher Quality5%^b —
Title II-B: Mathematics and Science Partnerships — —
Title II-D: Education Technology5%5%
Title III-A: English Language Acquisition5%2%
Title IV-A: Safe and Drug-Free Schools and Communities7%^c —
Title IV-B: 21^st Century Community Learning Centers5% — ^d
Title V-A: Innovative Programs —
Title VI-B-2: Rural and Low-Income School Program5% —
Title VII-A-1: Indian Education — 5%
^{a. Fo}^r^ESEA^T^{itle I}^,^P^a^r^t^{s A}^,^{C, an}^d^{D, th}^{e m}^a^xⁱ^m^u^m^{state ad}^mⁱⁿⁱ^str^a^tioⁿ^r^e^ser^v^atioⁿ^is^u^p^to¹^%^o^f
^t^o^t^a^l^s^t^at^{e al}^l^o^catⁱ^oⁿ^s^uⁿ^d^er^t^h^es^e^Part^s^,^or^{$400,000 ($50,000 f}^o^{r O}^u^t^l^yⁱⁿ^g^A^r^eas^{), w}^hⁱ^c^h^e^v^e^r
ⁱ^s^gr^e^a^t^e^r^,^c^a^{pped at th}^{e am}^ouⁿ^t^th^{e s}^t^{ate cou}^l^{d res}^e^rv^{e at a total f}^uⁿ^dⁱⁿ^g^lev^e^{l f}^o^{r th}^es^e
^prog^ram^s^of^{$14 b}^illion^.
^b^.^T^h^{is is th}^{e m}^a^xⁱ^m^u^m^f^o^r^{all state-}^lev^e^{l activ}^ities.
^{c. Bef}^o^{re t}^hⁱ^s^res^e^rva^tⁱ^o^n,^up^t^o^20%^of^s^t^at^{e t}^o^t^a^l^g^r^an^t^s^m^a^y^{be res}^e^rv^{ed by}^t^h^{e g}^o^v^e^rn^{or f}^o^r
^co^m^p^etitiv^{e g}^r^an^{ts. I}ⁿ^ad^d^itioⁿ^,^th^{e 7}^%^m^a^xⁱ^m^u^m^ap^p^lies^to^{all SEA}^activ^{ities, an}^d^oⁿ^ly³^%^o^f
^s^t^{ate g}^r^an^ts^m^a^y^{be u}^s^{ed f}^o^{r adm}ⁱⁿⁱ^s^t^ration^.
^d.^O^f^t^h^e^t^o^t^a^l^r^e^ceiv^e^d^by^each^s^t^ate,^at^leas^{t 85%}^of^th^{e s}^t^ate’^s^F^Y^{2002 g}^r^an^{t, plu}^s^100%^of^th^e
^ex^ces^s^ov^{er F}^Y^{2002 (50%}^f^o^{r s}^t^ates^receivⁱⁿ^g^th^e^mⁱⁿⁱ^m^u^m^g^r^an^t),^if^an^y^,^m^u^s^t^{be allocated to}
^L^E^A^s^{. Rem}^aⁱⁿⁱⁿ^g^f^uⁿ^d^{s, if}^an^y^,^co^u^l^d^b^e^u^s^ed^f^o^r^state-^lev^e^l^activ^{ities, w}^ith^{a m}^a^xⁱ^m^u^m^o^f¹⁵^%
^of^th^es^{e u}^s^{ed f}^o^{r adm}ⁱⁿⁱ^s^t^ration^.

As seen in Table 7, a large majority of ESEA formula grant programs provide
for grants to be made to the Outlying Areas (American Samoa, Commonwealth of
the Northern Mariana Islands, Guam, and the Virgin Islands). Some programs simply
treat these areas the same as the 50 states, the District of Columbia, and Puerto Rico;
others reserve a share of state grants (either 0.5% or 1%) for this purpose. A
somewhat smaller majority of ESEA formula grant programs provide funds to the
Bureau of Indian Affairs (BIA) for services to Indian pupils, either by treating the
BIA the same as a state, or more often by reserving 0.5% or 1% of grants for this
purpose.
Only a few ESEA formula grant programs reserve a share of formula grant
funds for national programs or activities. National programs are much more often
authorized under separate provisions of the statute (e.g., Safe and Drug-Free Schools
and Communities national programs are authorized in ESEA Title IV, Part A,
Subpart 2, whereas state formula grants are authorized under Subpart 1). Similarly,
only a few programs authorize reservations from formula grant appropriations for
evaluations and technical assistance. However, as with national programs, several
ESEA formula grant programs contain separate authorizations for evaluations (e.g.,
evaluations for Title I-A are authorized in Title I-E). In addition, the ESEA contains
a general authorization (in Title IX, Part F) for the Secretary of Education to reserve
for program evaluation up to 0.5% of appropriations under any ESEA program,
except those in Titles I and III (or any other ESEA program for which the reservation
of funds by the Secretary for evaluation is explicitly provided).
Table 7. Reservations for Outlying Areas, Bureau of Indian
Affairs, National Programs, and Evaluation
and Technical Assistance
Maximum National Reservations
Bureau Evaluation
P r ogram Outlying of National and
Areas Indian P r ograms Technical
Affairs Assistance
Title I-A: Education for the1.0%^a — —
Disadvantaged (all formulas)^bb
Title I-A: School Improvement — —
Grants
Title I-B-1: Reading First0.5%0.5%Lesser of 2.5% or $25^c
million
Title I-B-3: Even Start5% (if $200 million or3%^d
less) or 6% (if above
$200 million)
Title II-A: Improving Teacher0.5%0.5% — —
Quality^b
Title II-B: Mathematics and — — 0.5%
Science Partnerships
Title II-D: Education0.5%0.75%2%

Technology

Maximum National Reservations
Bureau Evaluation
P r ogram Outlying of National and
Areas Indian P r ograms Technical
Affairs Assistance^e
Title III-A: English Language0.5%6.5%
Acquisition
Title IV-A: Safe and Drug-Greater ofGreater — $2 million
Free Schools and Communities1% orof 1% or
$4.75 $4.75^f
million million^b
Title IV-B: 21^st Century1%1% —
Community Learning Centers
Title V-A: Innovative1% — — —
Programs
Title VI-A-1: State0.5%0.5% — —
Assessment Grants^b
Title VI-B-1: Small, Rural — — —
School Achievement
Title VI-B-2: Rural and Low-0.5%0.5% — —
Income School Program^bb
Title VII-A-1: Indian — —
Education
^{a. T}^h^{e s}^t^atu^t^{e au}^th^orizes^th^{e res}^e^rv^ation^of^a^to^ta^l^o^f¹^%^o^f^T^{itle I}^-^A^g^r^an^{ts f}^o^r^th^{e Ou}^tlyⁱⁿ^g^A^r^eas
^plu^s^th^{e B}^u^reau^of^In^dian^A^f^f^a^irs^.
^b^.^T^h^{ese en}^{tities ar}^{e tr}^eated^{as states u}ⁿ^d^er^th^{is p}^r^o^g^r^a^m^.
^{c. In}^addition^,^if^th^e^appr^opriation^ex^ceeds^th^{e FY2003 am}^ouⁿ^t^{, th}^{e les}^s^e^{r of}^{$90 m}^illion^{or 10% of}
^th^{e in}^creas^{e ov}^{er FY2003 is}^{to be res}^e^rv^{ed f}^o^{r com}^p^etitiv^{e aw}^ards^.
^d^.^Iⁿ^ad^d^itioⁿ^,^th^{e lesser}^o^f^$²^m^illioⁿ^o^r⁵⁰^%^o^f^th^{e in}^cr^{ease in}^ap^p^r^o^p^r^iatioⁿ^s^o^v^er^th^{e p}^r^ev^io^u^s^y^ear
^(if^{appropriation}^s^{are h}ⁱ^g^h^e^r^th^anⁱⁿ^th^{e preced}ⁱⁿ^g^y^{ear), an}^{d “}^oⁿ^l^y^th^{e am}^ouⁿ^tⁿ^eces^s^a^ry^to
^coⁿ^tin^u^e^m^u^lti-^y^ear^[^r^esear^ch^]^activ^{ities” o}^t^h^e^r^w^{ise, m}^a^y^b^e^r^e^ser^v^ed^f^o^r^r^e^sear^ch^{. Fu}^r^t^h^e^r^,^if
^ap^p^r^o^p^r^iatioⁿ^s^ex^ceed^th^o^s^{e f}^o^{r th}^{e p}^r^ev^io^u^s^y^ear^,^u^p^t^o^$¹^m^illioⁿ^m^a^y^b^e^reserv^ed^f^o^r
^statew^id^{e liter}^acy^activ^ities.
^{e. T}^h^{e g}^r^eater^o^f⁰^.⁵^%^o^r^$⁵^m^illioⁿ^is^to^b^e^r^e^ser^v^ed^f^o^r^g^r^an^ts^to^ser^v^{e Nativ}^{e A}^m^er^ican^an^d^A^l^ask^a
^N^a^tⁱ^v^e^c^hⁱ^l^d^r^e^n,^a^l^t^h^o^{ugh no}^t^sp^e^cⁱ^fi^c^a^l^l^y^t^h^r^o^{ugh t}^h^e^B^I^A^.
^f^.^Aⁿ^ad^d^itioⁿ^a^{l 0}^.²^%^o^f^T^{itle I}^V^-^A^f^uⁿ^d^{s is r}^e^ser^v^ed^f^o^r^g^r^an^{ts to}^ser^v^{e Nativ}^{e Haw}^a^iian^s^.
As indicated in Table 8, most ESEA formula grant programs have both
maintenance of effort and supplement, not supplant, provisions. A few programs
have only one, but not both of these fiscal accountability provisions. Only Title I,
Parts A, C, and D have comparability provisions (requirements that educational
services funded from state and local sources be comparable in schools that do, and
do not, participate in the program within the same LEA). Table 8 depicts the types
of fiscal accountability provisions that are in place; details about these provisions are
included in the discussions of individual programs.

Table 8. Fiscal Accountability Requirements
Fiscal Requirements
P r ogram Maintenance Suppl e m e nt ,Not Comparability
of EffortSupplant
Title I-A: Education for theXXX
Disadvantaged (all formulas)
Title I-A: School ImprovementXXX
Grants
Title I-B-3: Even StartX
Title I-C: Migrant EducationXXX
Title I-D: Neglected orXX
Delinquent
Title II-A: Improving TeacherXX
Quality
Title II-B: Mathematics andX
Science Partnerships
Title II-D: EducationXX
Technology
Title III-A: English LanguageXX
Acquisition
Title IV-A: Safe and Drug-FreeXX
Schools and Communities
Title IV-B: 21^st CenturyXX
Community Learning Centers
Title V-A: Innovative ProgramsXX
Title VI-A-1: State AssessmentX
Grants
Title VI-B-1: Small, RuralX
School Achievement
Title VI-B-2: Rural and Low-XX
Income School Program
Title VII-A-1: Indian EducationX
Title VIII: Impact Aid BasicX
Support Payments
Title VIII: Impact Aid PaymentsX
for Children With Disabilities
As shown in Table 9, three current ESEA programs allocate grants on a
competitive basis if annual appropriations are below a specified threshold level, then
allocate funds to states by formula if appropriations meet or exceed this threshold.
The threshold is $100 million for two of these programs and $250 million for the
third. Only one of these programs, Mathematics and Science Partnerships, has met
its threshold thus far.

Table 9. Funding Thresholds for Transition
From Competitive to Formula Grants
Threshold forHasThres-
ProgramTransition FromCompetitive tohold
Formula GrantsBeenMet?
Title I-B-4: School Libraries$100 millionno
Title I-H: Dropout Prevention$250 millionno
Title II-B: Mathematics and Science$100 millionyes
Partnerships
Individual ESEA Program Formulas
Detailed descriptions of individual ESEA program allocation formulas are
provided below. Programs are discussed in the order of their appearance in the
ESEA.
Title I, Part A: Education for the Disadvantaged
Title I, Part A, of the ESEA authorizes aid to LEAs for the education of
disadvantaged children. Title I-A grants provide supplementary educational and
related services to low-achieving and other pupils attending pre-kindergarten through
grade 12 schools with relatively high concentrations of pupils from low-income
families. In recent years, it has also become a “vehicle” to which a number of
requirements affecting broad aspects of public K-12 education for all pupils have
been attached as a condition for receiving Title I-A grants. These include
requirements for assessments of pupil achievement; adequate yearly progress (AYP)
standards and determinations for schools, LEAs, and states; consequences for schools
and LEAs that fail to make AYP for two consecutive years or more; plus teacher and
paraprofessional qualifications.
Under Title I-A, funds are allocated to LEAs via SEAs. Annual appropriations
bills specify portions of each year’s appropriation to be allocated under four different
formulas; once funds reach LEAs, the amounts allocated under the four formulas are
combined and used jointly. Under three of the formulas — Basic, Concentration, and
Targeted Grants — funds are calculated initially at the LEA level, and state total
grants are the total of allocations for LEAs in the state, adjusted to apply state
minimum grant provisions. Under the fourth formula, Education Finance Incentive
Grants, grants are first calculated for each state overall, with state totals subsequently
suballocated by LEA using a different formula. A primary rationale for using four
different formulas to allocate shares of the funds for a single program is that the
formulas have distinct allocation patterns, providing varying shares of allocated funds
to different types of LEAs or states (e.g., LEAs with high poverty rates or states with
comparatively equal levels of spending per pupil among their LEAs). In addition,

some of the formulas contain elements that are deemed to have important incentive
effects or to be significant symbolically, in addition to their impact on allocation
patterns.
In the discussion below, each of the four ESEA Title I-A allocation formulas is
discussed separately.⁹
Basic Grants. Basic Grants are the original Title I-A formula, authorized and
implemented each year since FY1966. It is also the formula under which the largest
proportion of funds is allocated (47% of FY2008 appropriations), and under which
the largest proportion of LEAs participate (approximately 91% in FY2007), largely
due to its low LEA eligibility threshold (see below). However, because all post-
FY2001 increases in Title I-A appropriations have been provided for the Targeted
and Education Finance Incentive Grant formulas (see below), the proportion of Title
I-A funds allocated under the Basic Grant formula has been declining steadily since
FY2001, when it was 86%.
Compared to some of the other Title I-A formulas, the Basic Grant formula is
relatively straightforward. Grants are based on each LEA’s share, compared to the
national total, of a population factor multiplied by an expenditure factor, subject to
available appropriations, an LEA minimum or “hold harmless,” and a state minimum.
These formula factors are described below, followed by a mathematical expression
of the formula.
Population Factor. Children aged 5-17: (a) in poor families, according to the latest
available estimates for LEAs from the Census Bureau’s Small Area Income and
Poverty Estimates (SAIPE) program (these constitute approximately 96% of all
formula children for FY2007); (b) in institutions for neglected or delinquent children
or in foster homes (approximately 3.9% of all formula children for FY2007);¹⁰ and
(c) in families receiving Temporary Assistance for Needy Families (TANF) payments
above the poverty income level for a family of four (less than 0.1% of all formula
children for FY2007). Each element of the population factor is updated annually.
Eligibility Threshold. In order for an LEA to be eligible for a Basic Grant, the
number of children counted in the population factor must constitute at least 10 such
children and at least 2% of the total school-age population.
Expenditure Factor. State average per pupil expenditure for public K-12 education,
subject to a minimum of 80% and a maximum of 120% of the national average,

⁹ For additional discussion and analysis of the four Title I-A allocation formulas, see CRS
Report RL33731, Education for the Disadvantaged: Reauthorization Issues for ESEA Title
I-A Under the No Child Left Behind Act, by Wayne C. Riddle.
¹⁰ The portion of funds allocated to states under the Basic Grant and the other three Title I-A
allocation formulas that is based on delinquent youth in local programs is set aside and
separately allocated to LEAs providing services to such youth. SEAs are to allocate these
funds to LEAs with concentrations of youth in local correctional facilities. SEAs may
allocate these funds through a state-developed formula or on a discretionary basis.

further multiplied by 0.40. The expenditure factor is the same for all LEAs in the
same state.
LEA Minimum Grant or “Hold Harmless” Level. If sufficient funds are
appropriated, each LEA is to receive a minimum of 85%, 90%, or 95% of its
previous year grant, depending on the LEA’s school-age child poverty rate, assuming¹¹
that the LEA continues to meet the Basic Grant formula’s eligibility thresholds.
Minimum State Grant. Each state is to receive a minimum of up to 0.25% of total
Basic Grant appropriations if total Basic Grant funding is equal to or less than the
FY2001 level (as has been the case each year since FY2001 thus far), and up to

0.35% of total Basic Grant appropriations in excess of the FY2001 amount, if any.

A state may not, as a result of the state minimum provision, receive more than the
average of (1) 0.25% of the total FY2001 amount for state grants plus 0.35% of any
amount above the FY2001 level, and (2) 150% of the national average grant per
formula child, multiplied by the number of formula children in the state.
Ratable Reduction. After maximum grants are calculated, if appropriations are
insufficient to pay the maximum amounts (as has been the case every year beginning
with FY1967), these amounts are reduced by the same percentage for all LEAs,
subject to LEA hold harmless and state minimum provisions, until they equal the
aggregate level of appropriations.
Fiscal Requirements. There are three Title I-A fiscal accountability requirements,
which are applicable to total LEA grants under all four formulas: (1) maintenance
of effort: recipient LEAs must provide, from state and local sources, a level of
funding (either aggregate or per pupil) in the preceding year that is at least 90% as
high as in the second preceding year; (2) Title I-A funds must be used so as to
supplement, and not supplant, state and local funds that would otherwise be available
for the education of disadvantaged pupils in Title I-A participating schools; (3)
comparability: services provided with state and local funds in schools participating
in Title I-A must be comparable to those in non-Title I-A schools of the same LEA.¹²
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.¹³
With one possible exception, Puerto Rico is treated the same as a state under the
Basic Grant formula. Grants to schools operated or supported by the Bureau of

¹¹ The hold harmless rate is 85% of the previous year grant if the LEA’s school-age child
poverty rate (population factor divided by total school-age population) is less than 15%,

90% if the school-age child poverty rate is between 15% and 30%, and 95% if the school-

age child poverty rate is greater than 30%.
¹² If all of an LEA’s schools participate in Title I-A, then services funded from state and
local revenues must be “substantially comparable” in each school of the LEA.
¹³ Through FY2007, the minimum expenditure factor applicable to Puerto Rico was lower
than that for any state. The NCLB provided for the elimination of this special provision in
stages, although scheduled increases in the Puerto Rico expenditure factor are not to be
implemented if doing so would result in a decrease in the grant to any state. The final step
in this process was not implemented as scheduled in FY2007; however, it was implemented
in FY2008.

Indian Affairs, the Outlying Areas of Guam, American Samoa, the Virgin Islands,
and the Commonwealth of the Northern Mariana Islands, as well as a competitive
grant to the Outlying Areas plus certain Freely Associated States¹⁴ are provided via
reservation of 1% of total Title I-A appropriations.
Further Adjustments by SEAs of LEA Grants as Calculated by ED. Among
ESEA programs, a distinctive aspect of Title I-A is that after calculation of LEA
grants by ED, applying the methods discussed herein, SEAs make a number of
adjustments before determining the final amounts that LEAs actually receive. These
adjustments are made to the total of Title I-A grants to LEAs under all four formulas
combined. These adjustments include (1) reservation of 4% of state total allocations
to be used for school improvement grants;¹⁵ (2) reservation of 1% of state total
allocations under all formulas for ESEA Title I, Part A, plus Title I, Parts C and D
(discussed below), or $400,000, whichever is greater, for state administration;¹⁶ (3)
optional reservation of up to 5% of any statewide increase in total Part A grants over
the previous year for academic achievement awards to participating schools that
significantly reduce achievement gaps between disadvantaged and other pupil groups
or exceed adequate yearly progress standards for two consecutive years or more; (4)
adjustment of LEA grants to provide funds to eligible charter schools or to account
for recent LEA boundary changes; and (5) optional use by states of alternative
methods to reallocate all of the grants as calculated by ED among the state’s small
LEAs (defined as those serving an area with a total population of 20,000 or fewer¹⁷
persons).
Basic Grant Allocation Formula
Step 1: Preliminary Grant 1 = PF * EF or L_HH, whichever is greater

¹⁴ The Freely Associated States include Palau, the Federated States of Micronesia, and the
Republic of the Marshall Islands. As of March 2008, only Palau is eligible for this grant
competition.
¹⁵ In the process of making this deduction, SEAs may not reduce any LEA’s net grant (i.e.,
its final grant, after making deductions for school improvement and state administration,
plus any other adjustments) below its previous year level. According to a recent survey by
the Government Accountability Office, this limitation has prevented several states from
being able to reserve the full 4% in recent years (see “No Child Left Behind Act: Education
Actions Could Improve the Targeting of School Improvement Funds to Schools Most in
Need of Assistance,” GAO-08-380, February 2008). In addition, as is discussed later in this
report, the school improvement reservation may be supplemented by additional funds
separately appropriated for this purpose.
¹⁶ If total appropriations for ESEA Title I, Parts A, C, and D exceed $14 billion, then state
administration reservations are capped at the level that would pertain if the total
appropriations for these programs were $14 billion. This limit will be applicable for the first
time in FY2008.
¹⁷ As of March 2008, this statutory authority is exercised by 7 states: Alaska, Iowa, Kansas,
Maine, Nebraska, North Dakota, and Oklahoma.

In Step 1, the population factor is multiplied by the expenditure factor for each
eligible LEA. If this is less than the LEA’s hold harmless level, the latter amount is
used.
Step 2: Preliminary Grant 2 = ( Preliminary Grant 1 / 3 Preliminary Grant 1 ) *
APP or L_HH, whichever is greater
In Step 2, the amount for each LEA in Step 1 is divided by the total of these amounts
for all eligible LEAs in the nation, then multiplied by the available appropriation.
Again, if this is less than the LEA’s hold harmless level, the latter amount is used.
Step 3: Preliminary Grant 3 = (Preliminary Grant 2 * S_MIN_ADJ *
L_HH_ADJ) or L_HH, whichever is greater
In Step 3, the amount for each LEA in Step 2 is adjusted through application of the
state minimum grant provision and by a factor to account for the aggregate costs of
raising affected LEAs to their hold harmless level, given a fixed total appropriation
level. The state minimum grant adjustment is upward in the smallest states, where
total grants are increased through application of the minimum, and downward in all
other states, where funds are reduced in order to pay the costs of applying the
minimum. The LEA hold harmless adjustment is downward for all LEAs except
those at their hold harmless level. Again at this stage, if this is less than the LEA’s
hold harmless level, the latter amount is the LEA’s grant.
Step 4: Final Grant = Preliminary Grant 3 * SCH_IMP_ADJ * S_ADMIN_ADJ *
AWD_ADJ * OTR_ADJ
In the final step of calculating LEA grants under all Title I-A allocation formulas,
LEA grants as calculated in Step 3 are further adjusted for the school improvement
and state administration reservations, possible state reservations for achievement
awards, and other possible adjustments (such as for grants to charter schools)
discussed above.
Where:
PF = Population factor
EF = Expenditure factor
L_HH = LEA minimum or “hold harmless” level
APP = Appropriation
S_MIN_ADJ = State minimum adjustment (proportional increase (in small states)
or decrease (in other states) to apply the statewide minimum grant)
L_HH_ADJ = LEA minimum or “hold harmless” adjustment (proportional
decrease, in LEAs not benefitting from the LEA “hold harmless,” to apply the
LEA minimum grant)
SCH_IMP_ADJ = Reservation by SEA for school improvement grants
S_ADMIN_ADJ = Reservation by SEA for state administration
AWD_ADJ = Possible reservation by SEA for achievement awards
OTR_ADJ = Other possible adjustments by the SEA

3 = Sum (for all eligible LEAs in the nation)

Concentration Grants. The Concentration Grant formula is essentially the
same as that for Basic Grants, with one major exception — it has a much higher LEA
eligibility threshold. There are also differences regarding the LEA hold harmless and
state minimum grant provisions. Although the Title I-A statute has included
Concentration Grant formulas (with varying provisions and sometimes under
different names) since 1970, the current version dates from 1988 (P.L. 100-297). A
relatively small (10% of FY2008 appropriations) and declining (from 14% in
FY2001) proportion of Title I-A appropriations is allocated under the Concentration
Grant formula. Approximately 48% of LEAs receive Concentration Grants
(FY2007).
As with Basic Grants, Concentration Grants are based on each eligible LEA’s
share, compared to the national total, of a population factor multiplied by an
expenditure factor, subject to available appropriations, an LEA minimum or “hold
harmless,” and a state minimum. These formula factors are described below,
followed by a mathematical expression of the formula.
Population Factor. Same as Basic Grants (see above).
Eligibility Threshold. In order for an LEA to be eligible for a Concentration Grant,
the number of children counted in the population factor must constitute either 6,500
such children or at least 15% of the total school-age population.
Expenditure Factor. Same as Basic Grants (see above).
LEA Minimum Grant or “Hold Harmless” Level. The hold harmless rates for
Concentration Grants are the same as those for Basic Grants. Unlike Basic Grants
and all of the other Title I-A formulas, the hold harmless applies to all LEAs that
received grants for the previous year, even if they do not currently meet one of the
Concentration Grant formula’s eligibility thresholds, unless they fail to meet one of
the thresholds for 4 consecutive years. That is, an LEA that is eligible to receive a
Concentration Grant in one year can continue to receive a Concentration Grant for
three succeeding years, even if it does not meet either of the eligibility thresholds in
those succeeding years.¹⁸
Minimum State Grant. The Concentration Grant state minimum is a modified
version of the Basic Grant minimum. Each state is to receive a minimum of up to
0.25% of total Concentration Grant appropriations if total Concentration Grant
funding is equal to or less than the FY2001 level (as has been the case each year
since FY2001 thus far), and up to 0.35% of total Concentration Grant appropriations
in excess of the FY2001 amount, if any. A state may not, as a result of the state
minimum provision, receive more than the average of (1) 0.25% of the total FY2001
amount for state grants plus 0.35% of the amount above this, and (2) the greater of
(i) 150% of the national average grant per formula child, multiplied by the number
of formula children in the state, or (ii) $340,000.

¹⁸ In this scenario, the Concentration Grant for each year would be equal to 85% of the
previous year grant.

Ratable Reduction. Same as Basic Grants (see above).
Fiscal Requirements. Same as Basic Grants (see above).
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Same as Basic Grants (see above).
Further Adjustments by SEAs of LEA Grants as Calculated by ED. With one
exception, these are the same as for Basic Grants. The exception is that in states
where the state total number of children counted in the population factor constituted
less than 0.25% of the national total of such children as of the date of enactment of¹⁹
the NCLB, SEAs may allocate Concentration Grants among all LEAs with a
number or percentage of children counted in the population factor that is greater than
the state average for that year (not just LEAs meeting the 6,500 or 15% thresholds).
Concentration Grant Allocation Formula. The mathematical expression of the
Concentration Grant formula is the same as that for Basic Grants (above), with one
exception. As discussed immediately above, in states where the number of children
counted in the population factor constituted less than 0.25% of the national total of
such children as of the date of enactment of the NCLB, the state total is to be
allocated on the basis of the population factor among the LEAs that are to receive
grants. These LEAs may include, at state discretion, either those LEAs in the state
meeting the Concentration Grant eligibility criteria described above, or all LEAs in
the state with a number or percentage of children counted in the population factor
that is greater than the state average. In either case, for states where the number of
children counted in the population factor constituted less than 0.25% of the national
total of such children as of the date of enactment of the NCLB only (after state totals
have been determined):
LEA Grant = PF / 3 PF * ALL or L_HH, whichever is greater
Where:
PF = Population factor
ALL = State total allocation
L_HH = LEA minimum or “hold harmless” level

3 = Sum (for all eligible LEAs in the state)

Targeted Grants. Targeted Grants were initially authorized in 1994,²⁰ but no
funds were appropriated for them until FY2002, after the formula was slightly
modified by the NCLB. Beginning in FY2002, all increases in Title I-A
appropriations have been allocated as either Targeted or Education Finance Incentive
Grants (below). Thus, Targeted Grants constitute a substantial (21% of FY2008
appropriations) and growing portion of total Title I-A grants. They are allocated
among a large majority of LEAs (83% in FY2007).

¹⁹ This group of states will be very similar to, but not necessarily the same as, the group of
states currently receiving state minimum Concentration Grants.
²⁰ The Improving America’s Schools Act (IASA), P.L. 103-382.

The allocation formula for Targeted Grants is essentially the same as that for
Basic Grants, except for significant differences related to how children in the
population factor are counted. For Targeted Grants, the poor and other children
counted in the formula are assigned weights on the basis of each LEA’s school-age
child poverty rate and number of school-age children in poor families. As a result,
LEAs receive higher grants per child counted in the formula, the higher their poverty
rate and/or number. There is also a somewhat higher LEA eligibility threshold for
Targeted Grants than for Basic Grants. Aside from these two differences, Targeted
Grants are, like Basic Grants, based on each eligible LEA’s share, compared to the
national total, of a population factor multiplied by an expenditure factor, subject to
available appropriations, an LEA minimum or “hold harmless,” and a state minimum.
These formula factors are described below, followed by a mathematical expression
of the formula.
Population Factor. The children counted for calculating Targeted Grants are the
same as for Basic Grants (see above). However, for Targeted Grants, LEA-specific
weights are applied to these child counts to produce a weighted child count that is
used in the formula. Children counted in the formula are assigned weights on the
basis of each LEA’s school-age child poverty rate and (separately) number of school-
age children in poor families. As a result, an LEA would receive higher grants per
child counted in the formula, the higher its poverty rate or number. The weighting
factors are applied in the same manner nationwide; formula children in LEAs with
the highest poverty rates have a weight of up to four, and those in LEAs with the
highest numbers of such children have a weight of up to three, compared to a weight
of one for formula children in LEAs with the lowest poverty rate and number of such
children (see Table 10, below). The higher of its two weighted child counts (on the
basis of numbers and percentages) is actually used in the formula for calculating
grants for each LEA.

Table 10. Weights Applied to Counts of Population Factor
Children in the Calculation of ESEA Title I-A Targeted Grants
A. Weights Based on LEA Numbers of Children in the Population Factor
Population Factor Count RangeWeight Applied to Population Factor
Children in This Range
0-6911.0
692-2,2621.5
2,263-7,8512.0
7,852-35,5142.5
35,515 or more3.0
B. Weights Based on LEA Population Factor Children as a Percentage of Total
School-Age Population
Population Factor Percentage RangeWeight Applied to Population Factor
Children in This Range
0-15.58%1.0
15.58-22.11% 1.75
22.11-30.16%2.5
30.16-38.24% 3.25
Above 38.24%4.0
There are five ranges associated with each of the number and percentage
weighting scales. These steps, or quintiles, were based on the actual distribution of
Title I-A population factor children among the nation’s LEAs, according to the latest
available data in 2001 (at the time that the NCLB was being considered). Based
upon those data, one-fifth of the national total of population factor children were in
LEAs in each of the five numbers ranges and, separately, each of the five percentage
ranges.
The Targeted Grant population factor weights are applied in a stepwise manner,
rather than the highest relevant weight being applied to all population factor children
in the LEA, and the greater of the two weighted child counts for each LEA is the
number actually used to calculate the Targeted Grant. For example, assume an LEA
has 2,000 population factor children, the total school-age population is 10,000, and
therefore the population factor percentage is 20%. The population factor figure used
to calculate Targeted Grants would be determined as follows:
Numbers Scale:
Step 1: 691 * 1.0 = 691
The first 691 population factor children are weighted at 1.0.
Step 2: (2,000 - 691) = 1,309 * 1.5 = 1,963.5

For an LEA with a total number of population factor children falling within the
second step of the numbers scale, the number of population factor children above 691
(the maximum for the first step) is weighted at 1.5.
Total (Numbers Scale) = 2,654.5
The weighted population factor counts from Steps 1 and 2 are combined.
Percentage Scale:
Step 1: 15.58% * 10,000 = 1,558 * 1.0 = 1,558
A number of population factor children constituting up to 15.58% of the LEA’s total
school-age population is weighted at 1.0.
Step 2: (20% - 15.58%) = 4.42% * 10,000 = 442 * 1.75 = 773.5
For an LEA with a population factor percentage falling within the second step of the
percentage scale, the number of population factor children above 15.58% of the
LEA’s total school-age population (the maximum for the first step) is weighted at

1.75.

Total (Percentage Scale) = 2,331.5
The weighted population factor counts from Steps 1 and 2 are combined.
Since the numbers scale weighted count of 2,654.5 exceeds the percentage scale
weighted count of 2,331.5, the numbers scale count would be used as the population
factor for this LEA in the calculation of Targeted Grants.
Eligibility Threshold. In order for an LEA to be eligible for a Targeted Grant, the
number of children counted in the population factor (with no weights applied) must
constitute at least 10 such children and at least 5% of the total school-age population.
Expenditure Factor. Same as Basic Grants (see above).
LEA Minimum Grant or “Hold Harmless” Level. Same as Basic Grants (see
above).
Minimum State Grant. Each state is to receive a minimum of up to 0.35% of all
Targeted Grant appropriations. A state may not, as a result of the state minimum
provision, receive more than the average of: (1) 0.35% of total state grants, and (2)
150% of the national average grant per formula child, multiplied by the number of
formula children in the state. (In the latter calculation, population factor child counts
are not weighted.)
Ratable Reduction. Same as Basic Grants (see above).
Fiscal Requirements. Same as Basic Grants (see above).

Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Same as Basic Grants (see above), with the additional provision that for Puerto Rico
(only), a cap of 1.82 is placed on the aggregate weight applied to the population
factor under the Targeted Grant formula.²¹
Further Adjustments by SEAs of LEA Grants as Calculated by ED. Same as
Basic Grants (see above).
Targeted Grant Allocation Formula. Same as Basic Grants (see above), except
that the population factor (PF) would be the weighted child count, as described
above.
Education Finance Incentive Grants (EFIG). The EFIG formula is in
several ways significantly different from the other Title I-A allocation formulas. As
with Targeted Grants, EFIG Grants were initially authorized in 1994,²² but no funds
were appropriated for them until FY2002, after the formula was (in the case of EFIG)
considerably modified by the NCLB. Beginning in FY2002, all increases in Title I-A
appropriations have been allocated as either EFIG or Targeted Grants. Thus, as with
Targeted Grants, EFIG Grants constitute a substantial (21% of FY2008
appropriations) and growing portion of total Title I-A grants. They are allocated
among a large majority of LEAs (83% in FY2007).
The distinctive elements of the EFIG formula begin with the fact that the first
stage in the process of calculating grants is based on data for states as a whole, not
LEAs. LEA grants are determined in a separate, later stage of the allocation process.
A second major difference is that the EFIG formula includes not only a
population factor and an expenditure factor, but also two unique factors. These are
an effort factor, based on average per pupil expenditure for public K-12 education
compared to personal income per capita for each state compared to the nation as a
whole, and an equity factor, based on variations in average per pupil expenditure
among the LEAs in each state.
A third distinctive feature of the EFIG formula is that while population factor
child counts are not weighted when calculating state total grants, they are weighted
in the separate process of suballocating state total grants among LEAs. This intra-
state allocation process is based on the same number and percentage scales as used
for Targeted Grants, although the weights attached to each point on those scales
varies among states, based on the state’s equity factor. A final difference between

²¹ This cap applies to both the numbers and percentages weighting scales, and was intended
to provide that the share of Targeted Grants allocated to Puerto Rico would be
approximately equal to its share of grants under the Basic and Concentration Grant formulas
for FY2001. This cap reduces grants below the level that would obtain if there were no cap
at all (i.e., if Puerto Rico were treated in the same manner as the 50 states and the District
of Columbia), since Puerto Rico’s high number and percentage of school-age children in
poor families would translate into a significantly higher aggregate weighting factor if not
capped.
²² The Improving America’s Schools Act (IASA), P.L. 103-382.

the EFIG Grant and other Title I-A formulas is that the expenditure factor is modified
through application of slightly more narrow floor and ceiling constraints for EFIG
Grants.
Thus, state total EFIG Grants are based on each state’s share, compared to the
national total, of a population factor multiplied by an expenditure factor, an effort
factor, and an equity factor, adjusted by a state minimum. Then, each LEA’s share
of the state total EFIG Grant is based on a weighted population factor count for the
LEA, compared to the total for all LEAs in the state, adjusted by an LEA hold
harmless provision. These formula factors are described below, followed by a
mathematical expression of the formula.
Population Factor. In the first-stage calculation of state total EFIG Grants, this
factor is the same as for Basic Grants — the estimated number of children aged 5-17:
(a) in poor families; (b) in institutions for neglected or delinquent children or in foster
homes; and (c) in families receiving TANF payments above the poverty income level
for a family of four. In the second-stage suballocation of state total grants among
LEAs, as under all stages of the allocation process for Targeted Grants, weights are
applied to these child counts before they are actually used in the formula. This
process is the same as for Targeted Grants with respect to the number and percentage
scales used, and use of the greater of the two weighted child counts to calculate LEA
grants. However, for EFIG Grants only, the weights attached to each point on the
number and percentage scales differs, depending on the state’s equity factor
(described below). This variation is illustrated in Table 11, below.
As indicated in Table 11, the weights rise more rapidly as the numbers and
percentages of population factor children increase in states with higher equity factors.
For states with an equity factor below 0.10, the weights are the same as for Targeted
Grants. For states with equity factors between 0.10 and 0.20, or above 0.20, the
maximum weights are 50% higher, and twice as high, respectively, as for Targeted
Grants. As is discussed below, states with higher equity factors have relatively high
degrees of variation in average per pupil expenditure among the state’s LEAs.

Table 11. Weights Applied to Counts of Population Factor
Children in the Calculation of LEA Grants Under the ESEA Title
I-A Education Finance Incentive Grant Formula
A. Weights Based on LEA Numbers of Children in the Population Factor
PopulationWeight Applied to Population Factor Children in This Range
Factor CountState Equity FactorState Equity FactorState Equity Factor
RangeBelow 0.10of 0.10 - 0.20of 0.20 or Above
0-6911.01.01.0
692-2,262 1.5 1.5 2.0
2,263-7,851 2.0 2.25 3.0
7,852-35,514 2.5 3.375 4.5
35,515 or more3.04.56.0
B. Weights Based on LEA Population Factor Children as a Percentage of Total
School-Age Population
PopulationWeight Applied to Population Factor Children in This Range
Factor
PercentageState Equity FactorState Equity FactorState Equity Factor
RangeBelow 0.10of 0.10 - 0.20of 0.20 or Above
0-15.58% 1.0 1.0 1.0
15.58-22.11% 1.75 1.5 2.0
22.11-30.16% 2.5 3.0 4.0
30.16-38.24% 3.25 4.5 6.0
Above 38.24%4.06.08.0
Factors Not Found in Other ESEA Program Formulas. As noted above, the
EFIG formula has two additional factors not found in any other ESEA program
allocation formula.
Effort Factor. The effort factor is based on a comparison of state average per
pupil expenditure (APPE) for public elementary and secondary education with state
personal income per capita (PCI). More specifically, it is the ratio of APPE to PCI
for each state divided by the ratio of APPE to PCI for the nation. The resulting index
number is greater than 1.0 for states where the ratio of expenditures per pupil for
public elementary and secondary education to personal income per capita is greater
than average for the nation as a whole, and below 1.0 for states where the ratio is less
than average for the nation as a whole. Narrow bounds of 0.95 and 1.05 are placed
on the resulting multiplier, so that its influence on state grants is rather limited and
its importance is largely symbolic.
Equity Factor. The equity factor is based upon a measure of the average
disparity in average per pupil expenditure among the LEAs of a state called the
coefficient of variation (CV). The CV is expressed as a decimal proportion of the
state average per pupil expenditure. In the CV calculations for this formula, an extra
weight (1.4 vs. 1.0) is applied to estimated counts of children from poor families.
The effect is that grants would be maximized for a state where expenditures per pupil

from a poor family are 40% higher than expenditures per pupil from a non-poor
family.²³ Typical state equity factors range from 0.0 (for the single-LEA jurisdictions
of Hawaii, Puerto Rico, and the District of Columbia, where by definition there is no
variation among LEAs), to approximately 0.25 for a state with high levels of
variation in expenditures per pupil among its LEAs; the equity factors for most states
fall into the 0.10 - 0.20 range.²⁴ In calculating grants, the equity factor is subtracted
from 1.30 to determine a multiplier to be used in calculating state grants. As a result,
the lower a state’s expenditure disparities among its LEAs, the lower is its CV and
equity factor, the higher is its multiplier and its grant under the EFIG formula.
Conversely, the greater a state’s expenditure disparities among its LEAs, the higher
is its CV and equity factor, and the lower is its multiplier and its grant under the
EFIG formula.
Eligibility Threshold. Same as Targeted Grants (see above).
Expenditure Factor. State average per pupil expenditure for public K-12 education,
subject to a minimum of 85% (not 80%, as in the other Title I-A formulas) and a
maximum of 115% (not 120%, as in the other Title I-A formulas) of the national
average, further multiplied by 0.40. The expenditure factor is the same for all LEAs
in each state.
LEA Minimum Grant or “Hold Harmless” Level. Same as Basic Grants (see
above), with one exception. The hold harmless is not taken into consideration in the
initial calculation of state total grants. Therefore, it is possible (and has occurred in
a small number of instances) that state total grants are insufficient to fully pay hold
harmless amounts to all LEAs in the state. In that case, each LEA gets a proportional
share of its hold harmless amount.
Minimum State Grant. Same as Target Grants (see above).
Ratable Reduction. Same as Basic Grants (see above).
Fiscal Requirements. Same as Basic Grants (see above).
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Same as Basic Grants (see above).
Further Adjustments by SEAs of LEA Grants as Calculated by ED. Same as
Basic Grants (see above).

²³ Limited purpose LEAs, such as those providing only vocational education, are excluded
from the calculations, as are small LEAs with enrollment below 200 pupils.
²⁴ There is a special provision for states meeting the expenditure disparity standard
established in regulations for the Impact Aid program (ESEA Title VIII), for which the
equity factor is capped at a maximum of 0.10. For an explanation of the Impact Aid
equalization provision, see CRS Report RL34119, Impact Aid for Public K-12 Education:
Reauthorization Under the Elementary and Secondary Education Act, by Rebecca R.
Skinner and Richard N. Apling, pages 17-18.

Education Finance Incentive Grant Allocation Formula.
Stage 1: Calculation of State Total EFIG Allocations
Step 1: Preliminary State Grant = PF * EF * EFF * (1.30 - EQ)
In Step 1, the population factor is multiplied by the expenditure factor, the effort
factor, and 1.30 minus the equity factor for each state.
Step 2: Final State Grant = ( Preliminary State Grant / 3 Preliminary State Grant) *
APP * S_MIN_ADJ or S_MIN, if greater
In Step 2, the amount for each state in Step 1 is divided by the total of these amounts
for all eligible states in the nation, then multiplied by the available appropriation,
adjusted through application of the state minimum grant provision. The state
minimum grant adjustment is upward in the smallest states, where total grants are
increased through application of the minimum, and downward in all other states,
where funds are reduced in order to pay the costs of applying the minimum.
Stage 2: Calculation of LEA EFIG Allocations
Step 1: Preliminary LEA Grant 1 = ( PF / 3 PF ) * S_ALL, or L_HH, whichever is
greater
In Step 1, the population factor for each eligible LEA is divided by the total
population factor for all eligible LEAs in the state. If this is less than the LEA’s hold
harmless level, the latter amount is used.
Step 2: Preliminary LEA Grant 2 = Preliminary LEA Grant 1 * L_HH_ADJ or
L_HH, whichever is greater
In Step 2, the amount for each LEA in Step 1 is adjusted through application of a
factor to account for the aggregate costs of raising affected LEAs in the state to their
hold harmless level, given a fixed total state allocation level. The LEA hold harmless
adjustment is downward for all LEAs except those at the hold harmless level.
Step 3: Final LEA Grant = Preliminary LEA Grant 2 * SCH_IMP_ADJ *
S_ADMIN_ADJ * AWD_ADJ * OTR_ADJ
In the final step of calculating LEA grants under all Title I-A allocation formulas,
LEA grants as calculated in Step 2 are further adjusted for the school improvement
and state administration reservations, possible state reservations for achievement
awards, and other possible adjustments (such as for grants to charter schools)
discussed above.
Where:
PF = Population factor
EF = Expenditure factor
EFF = Effort factor
EQ = Equity factor

APP = Appropriation
S_MIN_ADJ = State minimum adjustment (proportional increase (in small states)
or decrease (in other states) to apply the statewide minimum grant)
S_MIN = State minimum
S_ALL = State total allocation
L_HH = LEA minimum or “hold harmless” level
L_HH_ADJ = LEA minimum or “hold harmless” adjustment (proportional decrease,
in LEAs not benefitting from the LEA “hold harmless,” to apply the LEA minimum
grant)
SCH_IMP_ADJ = Reservation by SEA for school improvement grants
S_ADMIN_ADJ = Reservation by SEA for state administration
AWD_ADJ = Possible reservation by SEA for achievement awards
OTR_ADJ = Other possible adjustments by the SEA
3 = Sum (for all states in the nation in Stage 1, and for all eligible LEAs in the state
in Stage 2)
ESEA Title I-A School Improvement Grants. Under ESEA Title I-A, two
different mechanisms are authorized for the generation of funds for School
Improvement activities. Whatever the source, these funds are to be targeted on
schools that are identified as being in need of improvement, corrective action, or
restructuring because they have failed to make AYP for two consecutive years or²⁵
more. First, states are to reserve 4% of their total Title I-A LEA grants, under the
four formulas described above, for School Improvement activities.²⁶
Second, the ESEA authorizes a separate appropriation for state School
Improvement Grants. These funds are allocated to states in proportion to state total
grants under ESEA Title I, Parts A, C (State Agency Migrant Program; see below),
and D (State Agency Neglected, Delinquent, or At-Risk Program; see below). At
least 95% of each state’s funds from either source (the reservation or the separate
appropriation) is to be allocated to LEAs for schools identified as being in need of
improvement, corrective action, or restructuring. The funds are allocated at state
discretion: there is no statutory intrastate allocation formula for School Improvement
funds, beyond the general direction that they are to be directed to LEAs with schools
identified as being in need of improvement, corrective action, or restructuring.
Title I Grant Factor: Funds are allocated to states in proportion to total grants
under Title I, Parts A, C, and D.

²⁵ See CRS Report RL33731, Education for the Disadvantaged: Reauthorization Issues for
ESEA Title I-A Under the No Child Left Behind Act, by Wayne C. Riddle for details.
²⁶ In reserving these funds, SEAs may not reduce any LEA’s grant below its previous year
level. As a result, in some years, a number of states may be unable to reserve the full 4%
of state total LEA grants for this purpose. For details, see Government Accountability
Office, “No Child Left Behind Act: Education Actions Could Improve the Targeting of
School Improvement Funds to Schools Most in Need of Assistance,” GAO-08-380, February

2008.

School Improvement Grant Allocation Formula
State Grant = [ ( T1A + T1C + T1D ) / 3 ( T1A + T1C + T1D ) ] * APP
Each state (including Outlying Areas and the Bureau of Indian Affairs) receives a
School Improvement Grant equal to its proportional share of total grants under ESEA
Title I, Parts A, C, and D.
Where:
T1A = State total grant under ESEA Title I, Part A
T1C = State total grant under ESEA Title I, Part C
T1D = State total grant under ESEA Title I, Part D
APP = Appropriation (separate) for School Improvement Grants

3 = Sum (for all states)

Title I, Part B, Subpart 1: Reading First
Subpart 1 of Title I-B authorizes the Reading First program. Under Reading
First, grants are allocated among participating states on the basis of a population
factor, subject to a state minimum. SEAs then make competitive subgrants to LEAs,
with priority given to LEAs in which the estimated number of children aged 5-17 in
poor families is at least 6,500 or the poverty rate for 5-17 year-olds is at least 15%.
Each participating LEA is to receive a share of the state’s Reading First grant that is
at least proportional to its share of state total grants under Title I-A. LEAs are to use
these funds to improve reading programs for pupils in grades K-3 in schools that
either have percentages of pupils from low-income families that are among the
highest in the LEA or have been identified for improvement, corrective action, or
restructuring under Title I-A. The supported reading instruction must be grounded
in scientifically based reading research. Subpart 1 also authorizes discretionary
targeted assistance performance awards to states that have demonstrated
improvements in pupil reading performance.
Population Factor. Children aged 5-17 in poor families, according to the latest
available estimates for LEAs from the Census Bureau’s SAIPE program. These
estimates are updated annually.
Minimum State Grant. Each state is to receive a minimum of 0.25% of total state
grants.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state, although its grants are capped; its share of state
grants may not exceed the share of funds it receives for Title I-A grants. Bureau of
Indian Affairs schools receive 0.5% of total appropriations, and an additional 0.5%
is allocated to the Outlying Areas of Guam, American Samoa, the Virgin Islands, and
the Commonwealth of the Northern Mariana Islands.
Other Reservations from Appropriations. At the national level, the Secretary of
Education may reserve up to $25 million, or 2.5% of total appropriations, whichever

is less, for program evaluation and national activities, and $5 million for
dissemination of information. And in any fiscal year when the total appropriation for
this program exceeds the appropriation for FY2003, the Secretary is to reserve $90
million, or 10% of the increase over the FY2003 appropriation, whichever is less, for
Targeted Assistance grants to states. Targeted Assistance grants were made with
funds appropriated for each of FY2004-2006. The latter would be competitive
awards, although available funds are to be distributed among eligible states in
proportion to the population factor for Title I-A Basic Grants. At the state level, up
to 20% of grants may be used for a variety of state activities (no more than 10% of
this reservation may be used for state administration). At the local level, up to 3.5%
of funds may be used for planning and administration.
Reading First Allocation Formula.
State Grant = [ ( PF / 3 PF ) * APP ] * S_MIN_ADJ, or S_MIN if greater
Each state receives a Reading First Grant equal to its proportional share of the
population factor for all states, adjusted downward to provide funds to raise the
smallest states to the state minimum level.
Where:
PF = Population factor
APP = Appropriation
S_MIN_ADJ = State minimum adjustment (proportional decrease to apply the
statewide minimum grant)
S_MIN = State minimum grant

3 = Sum (for all states)

Title I, Part B, Subpart 3: William F. Goodling Even Start
Family Literacy Programs
Subpart 3 of Title I-B authorizes the William F. Goodling Even Start Family
Literacy Programs. Under Even Start, funds are allocated to states in proportion to
grants under Title I-A, with a state minimum. Within states, funds are competitively
awarded to partnerships of LEAs and other entities to provide a combination of
services to parents and their children aged birth to seven years, including early
childhood education, adult basic education, and parenting skills training to parents
lacking a high school diploma.
Under this program, as well as any other ESEA program outside Title I-A where
grants are made in proportion to ESEA Title I-A grants, grants are made in
proportion to Title I-A grants as if no LEA hold harmless were applied. Thus, in
practice, Even Start grants are made in proportion to what Title I-A grants would be
if Title I-A had no LEA hold harmless provision, not actual Title I-A grants.
Title I-A Grant Factor. Grants to states are made in proportion to Title I-A grants,
calculated as if no LEA hold harmless were applied.

Minimum State Grant. Each state is to receive a minimum of the greater of $250,000
or 0.5% of total funding for state grants.
Fiscal Requirements. Even Start is one of many “covered programs” to which a
general ESEA maintenance of effort requirement applies. Recipient LEAs must
provide, from state and local sources, a level of funding (either aggregate or per
pupil) in the preceding year that is at least 90% as high as in the second preceding
year.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state. A total of 5% of appropriations (if $200 million or
less) or 6% (if above $200 million) is to be reserved to serve Indian tribes and tribal
organizations, the Outlying Areas, and children of migratory workers.
Other Reservations from Appropriations. At the national level, the Secretary may
reserve up to 3% of total appropriations for program evaluation and technical
assistance activities. The Secretary may also reserve funds for research.²⁷ If
appropriations are greater than in the previous year, up to $1 million may be reserved
for competitive grants to states for statewide family literacy initiatives. At the state
level, up to 6% of state grants may be reserved for administration, technical
assistance, program improvement, and other activities (no more than 50% of this
reservation may be used for administration).
Even Start Allocation Formula
State Grant = [ ( T1A / 3 T1A ) * APP ] * S_MIN_ADJ, or S_MIN, if greater
Each state receives an Even Start grant equal to its proportional share of total grants
under ESEA Title I, Part A, adjusted downward to provide funds to raise the smallest
states to the state minimum level.
Where:
T1A = State total grant under ESEA Title I, Part A, but calculated as these grants
would be if no LEA hold harmless were applied
APP = Appropriation
S_MIN_ADJ = State minimum adjustment (proportional decrease to apply the
statewide minimum grant)
S_MIN = State minimum grant

3 = Sum (for all states)

Improving Literacy Through School Libraries
Subpart 4 of ESEA Title I-B authorizes grants to LEAs to improve the services
provided by school libraries. If annual appropriations are less than $100 million (as

²⁷ The amount that may be reserved is the lesser of $2 million or 50% of the increase in
appropriations over the previous year if appropriations are higher than in the preceding year,
and “only the amount necessary to continue multi-year [research] activities” otherwise.

has been the case each year thus far), competitive grants to LEAs are made directly
by ED. If appropriations were $100 million or above, grants would be made by
formula to SEAs, in proportion to Title I-A grants, and SEAs would make
competitive grants to LEAs.
Title I, Part C: Migrant Education Program
The Migrant Education Program (MEP) provides grants to SEAs to develop or
improve education programs for migrant children.²⁸ Most migrant programs are
administered by LEAs and operate during the regular school year, as well as during
the summer months. In the allocation of funds, each state first receives a base grant
amount equal to its FY2002 grant amount, adjusted for updated migrant children
counts (discussed below). States are held harmless at this amount to mitigate a
substantial redistribution of funds under the new provisions. Appropriations in
excess of the FY2002 level are provided to states based on their proportional share
of the sum of (1) the number of identified eligible migrant children, ages 3 through
21, residing in the state during the previous year, plus (2) the number of identified
eligible migrant children, ages 3 through 21, who received services under the MEP
in summer or intersession programs provided by the state during the previous year.
The sum of these two groups of migrant children is multiplied by 40% of the average
per-pupil expenditure (APPE) in the state, except that the state’s APPE may not be
less than 32% or more than 48% of the national APPE.
Appropriations for MEP have not exceeded the FY2002 appropriations level of
$396 million. Thus, since FY2002, the amount of a state’s grant allocation has been
based on the level of its FY2002 base-year state grant, which is largely dependent on
the state’s 2000-2001 count of eligible migrant children²⁹ residing in the state relative
to other states, although these numbers have been adjusted in recent years for
inaccurate or incomplete data submitted by states for the calculation of their FY2002
MEP grants.³⁰ That is, for each state, ED calculates a defect rate that is then applied
to the 2000-2001 counts of eligible migrant children that were used to make FY2002
awards. These counts are then multiplied by 40% of the average per-pupil

²⁸ A migratory child is defined as a child who is, or whose parent or spouse, is a migratory
agricultural worker or a migratory fisher, and who, in the preceding 36 months, in order to
obtain, or accompany such parent or spouse in order to obtain, temporary or seasonal work
in agriculture or fishing: (1) moved from one school district to another, (2) moved from one
administrative area to another in a state comprised of a single school district, or (3) resides
in a school district larger than 15,000 square miles and migrates a distance of 20 miles or
more to a temporary residence to engage in fishing work.
²⁹ Two migrant child estimates were used to determine these counts: (1) the 12-month
estimated number of migrant children ages 3 to 21 years old, and (2) the summer and
intersession estimated number of migrant children ages 3 to 21 years old. (U.S. Department
of Education, 2006, Migrant Education Program Annual Report: Eligibility, Participation,
Services (2001-02), and Achievement (2002-03), available at [http://www.ed.gov/rschstat/
eval/disadv/migrant/annualreport/report.pdf]; and U.S. Department of Education, 2004, Title
I Migrant Education Program Trends Summary Report: 1998-2001, at [http://www.ed.gov/
rschstat/eval/disadv/ mi gr ant/report01.pdf]).
³⁰ Federal Register, May 4, 2007, p. 25229.

expenditure (APPE) in the state used to calculate the FY2002 grants, except that the
state’s APPE may not be less than 32% or more than 48% or the national APPE.
States receive a proportional share of available appropriations based on the results
of this calculation. Thus, the base grant amount received by states is actually an
“adjusted” FY2002 grant.
States receiving funds under MEP are required to develop a comprehensive state
plan for addressing the needs of migrant children. They have substantial flexibility
in determining which services and activities to offer. Uses of funds may include, for
example, providing instruction (remedial, compensatory, bilingual, multicultural, and
vocational), health services, counseling and testing, career education, preschool
services, and transportation to migrant students. Priority for services, however, must
be given to migrant children who are failing or most at risk of failing to meet state
academic content standards and achievement standards and whose education has
been interrupted during the regular school year.
Population Factor. The 12-month count is based on the number of eligible students
from 3 to 21 years of age, who within three years of making a qualified move, resided
in the state for one or more days from September 1 to August 31 of the reporting
year. The summer and intersession count is based on the unduplicated number of
eligible migrant children that were served in either a traditional summer or year-
round school intersession program at least once during the reporting year.
Expenditure Factor. The state’s migrant education student count is multiplied by
40% of the state’s average per pupil expenditure. The state’s APPE may not be less
than 32% of the national APPE or greater than 48% of the national APPE
Hold Harmless. Each state receives its “adjusted” FY2002 grant amount provided
appropriations are sufficient to make these awards.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Grants to Puerto Rico are determined by multiplying the number of children
calculated using the population factors by the product of (1) the percentage which
Puerto Rico’s APPE is of the lowest APPE of any of the 50 states³¹ and (2) 32% of
the national APPE. No funds are provided to the Outlying Areas or the Bureau of
Indian Affairs under this program.
Other Reservations from Appropriations. The Secretary of Education may reserve
up to $10 million of total appropriations to make grants or enter into contracts for the
coordination of migrant education activities. Up to $3 million of the $10 million may
be used to award competitive grants to SEAs that propose a consortium arrangement
with another state that will improve the delivery of services to migrant children
whose education is interrupted.
Fiscal Accountability Requirements. The MEP is one of many “covered programs”
to which a general ESEA maintenance of effort requirement applies. Recipient LEAs

³¹ This percentage may not be less than 77.5% for FY2002, 80.0% for FY2003, 82.5% for
FY2004, and 85.0% for FY2005 and all succeeding fiscal years.

must provide, from state and local sources, a level of funding (either aggregate or per
pupil) in the preceding year that is at least 90% as high as in the second preceding
year. In addition, Title I-C funds must be used so as to supplement, and not supplant,
state and local funds that would otherwise be available for the education of migrant
pupils, and the Title I-A comparability requirement also applies to Title I-C.
Migrant Education Program Allocation Formula
If appropriations are equal to or less than the FY2002 level of $396 million³²
Step 1: ADJ_COUNT = 00_01CNT * DR
In Step 1, a state’s adjusted student count is calculated by multiplying its 2000-2001
student count, the count used to make FY2002 grants, by a defect rate. The defect
rate adjusts the 2000-2001 migrant child count for inaccurate or incomplete data
submitted by states for the calculation of their FY2002 awards.
Step 2: GCNT = ADJ_COUNT * EF
In Step 2, the adjusted count from Step 1 is multiplied by an expenditure factor to
produce the count used to make state grant determinations. In making this
calculation, the adjusted count is multiplied by 40% of the average per-pupil
expenditure in the state used for calculating FY2002 grants, except that the state’s
APPE may not be less than 32% or more than 48% or the national APPE.
Step 3: State Grant = (GCNT / 3 GCNT) * APP
In Step 3, a state receives a proportional share of funds based on the grant count
calculated in Step 2. This proportion is equal to the state’s grant count divided by the
national grant count, multiplied by the appropriated amount.
If appropriations exceed the FY2002 level
Step 1: MSC = NMC + MCSI
If appropriations exceed the FY2002 appropriations level, any additional funds over
this level are allocated based on the sum of the prior year counts of the number of
identified eligible migratory children, aged 3 through 21, residing in the state and the
number of identified eligible migratory children, aged 3 through 21, who received
services through summer or intersession programs provided by the state.
Step 2: State Grant 1 = 02_GRANT + [(MSC * EF) / 3 (MSC * EF)] *
(EXCESS)
In Step 2, the state’s migrant education student count is multiplied by and
expenditure factor (40% of the state’s average per pupil expenditure). The state’s

³² Information on how the MEP formula currently works in practice was provided by the
U.S. Department of Education, Budget Service.

APPE may not be less than 32% of the national APPE or greater than 48% of the
national APPE. After calculating the state’s proportional share of migrant children
adjusted for the state’s expenditure factor, the amount is multiplied by the
appropriations amount in excess of the FY2002 appropriations amount. This total
is added to the state’s adjusted FY2002 grant amount to determine the state’s initial
grant. (See previous set of calculations for determination of the FY2002 adjusted
grant amount.)
Step 3: Final State Grant = State Grant 1 * (APP / 3 State Grant 1)
In Step 3, if funds are not sufficient to provide the amount calculated in Step 2 to
each state, all states have their grant amounts ratably reduced by multiplying the
state’s initial grant amount by the result of dividing the total appropriation by the
total amount generated under Step 2.
Where:
ADJ_ COUNT = Adjusted 2000-2001 eligible migrant child count
00_01CNT = 2000-2001 eligible migrant child count used to make FY2002 state
grants
DR = Defect rate
GCNT = Grant count used for calculation of state awards
EF = Expenditure factor
APP = Annual appropriation
MSC = Total number of migrant children
NMC = Number of migrant children living in the state during the prior year
MCSI = Number of migrant children who received services during summer or
intercession programs during the prior year
02_GRANT = State’s FY2002 grant amount based on its adjusted student count
EXCESS = Appropriations in excess of the FY2002 appropriations level

3 = Sum (for all states)

Title I, Part D: State Agency Neglected, Delinquent,
or At-Risk Program
Title I-D authorizes a pair of programs intended to improve education for pupils
who are neglected, delinquent, or at risk of dropping out of school. Subpart 1
authorizes grants for the education of children and youth in state institutions for the
neglected or delinquent, including community day programs and adult correctional
institutions. Funds are allocated to states on the basis of a population factor
multiplied by an expenditure factor. A portion of each state’s grant is to be used for
transition services for children and youth transferring to regular public schools.
Subpart 2 provides aid for programs operated by LEAs in collaboration with
locally operated correctional facilities, and in coordination with the Title I-A
program. These funds are allocated to states as part of the Title I-A allocation
process (described above). Once Title I-A grants reach SEAs, the portion of state
total grants that is based on delinquent youth in local programs is set aside and

separately allocated to LEAs providing services to such youth. SEAs are to allocate
these funds to LEAs with concentrations of youth in local correctional facilities.
SEAs may allocate these funds through a state-developed formula or on a
discretionary basis. Therefore, the remainder of this discussion is based on the
Subpart 1 state agency program only.
Population Factor. Neglected or delinquent children and youth receiving public
education services in institutions operated by state agencies, including those in
community day programs and adult correctional institutions. Such children and
youth must receive at least 15 hours per week of educational services in adult
correctional institutions, and at least 20 hours per week in other eligible institutions.
Expenditure Factor. Same as for Title I-A Basic Grants (see above).
Ratable Reduction. After maximum grants are calculated, if appropriations are
insufficient to pay the maximum amounts (as has been the case for every year from
FY1981 to the present), these amounts are reduced by the same percentage for all
states until they equal the aggregate level of appropriations.
Fiscal Requirements. The State Agency Neglected and Delinquent program is one
of many “covered programs” to which a general ESEA maintenance of effort
requirement applies. Recipient LEAs must provide, from state and local sources, a
level of funding (either aggregate or per pupil) in the preceding year that is at least
90% as high as in the second preceding year. In addition, Title I-D funds must be
used so as to supplement, and not supplant, state and local funds that would
otherwise be available for the education of neglected and delinquent pupils, and the
Title I-A comparability requirement also applies to Title I-D.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Grants are available only for the 50 states, the District of Columbia, and Puerto Rico.
With one possible exception,³³ Puerto Rico is treated the same as a state.
State Agency Neglected and Delinquent Allocation Formula
Step 1: Grant 1 = PF * EF
In Step 1, the population factor is multiplied by the expenditure factor for each state.
Step 2: Grant 2 = ( Grant 1 / 3 Grant 1 ) * APP
In Step 2, the amount for each state in Step 1 is divided by the total of these amounts
for all states, then multiplied by the available appropriation.

³³ Through FY2007, the minimum expenditure factor applicable to Puerto Rico was lower
than that for any state. The NCLB provided for the elimination of this special provision in
stages, although scheduled increases in the Puerto Rico expenditure factor are not to be
implemented if doing so would result in a decrease in the grant to any state. The final step
in this process was not implemented as scheduled in FY2007; however, it was implemented
in FY2008.

Where:
PF = Population factor
EF = Expenditure factor
APP = Appropriation (separate) for Neglected and Delinquent state grants

3 = Sum (for all states)

Title I, Part F: Comprehensive School Reform
Title I-F authorizes grants via SEAs to LEAs to implement comprehensive
reform strategies in schools participating in Title I-A. With the exception of an
information and technical assistance clearinghouse, this program is not currently
funded. If state grants were funded, appropriations would be allocated to states in
proportion to Title I-A Basic Grants (calculated as if no LEA hold harmless were
applied).
Title I, Part G: Advanced Placement Programs
Title I-G authorizes grants to SEAs to pay advanced placement test fees on
behalf of low-income individuals, as well as competitive grants to SEAs, LEAs, or
non-profit educational entities with relevant expertise, to support activities intended
to expand access to advanced placement programs for low-income individuals.
While the test fee grant program (Section 1704) does not have an explicit allocation
formula, the statute does provide that in the allocation of available funds among the
states, the Secretary of Education “shall consider” each state’s number of children
counted in the Title I-A population factor.
Title I, Part H: School Dropout Prevention
At annual appropriations levels of $75 million or less (as has been the case each
year thus far), Title I-H authorizes competitive grants to SEAs or LEAs for dropout
prevention and reentry programs in high schools with dropout rates above the state
average and for middle schools whose graduates attend these high schools. At annual
appropriations levels above $75 million but less than $250 million, competitive
grants would be made to SEAs for dropout prevention and reentry services to be
provided via competitive subgrants to LEAs. If annual appropriations were $250
million or above, grants would be made by formula to SEAs, in proportion to Title
I-A grants, with competitive subgrants to LEAs. At all funding levels, the Secretary
of Education is authorized to carry out a variety of activities as part of a “coordinated
national strategy” for dropout prevention and reentry.
Title II, Part A: Teacher and Principal Training and Recruiting
Fund
Title II, Part A authorizes a program of state grants that may be used for a
variety of purposes related to recruitment, retention, and professional development
of K-12 teachers and principals. In the allocation of funds, each state first receives
an amount equal to its FY2001 grant under two antecedent programs. Remaining
funds, if any, are allocated as follows: 35% on the basis of total population aged 5-

17, and 65% on the basis of population aged 5-17 in poor families, with a state
minimum grant amount of 0.5% of funds available for state grants. SEAs may
reserve up to 5% of funds for administration and statewide services, such as teacher
or principal support programs, or certification reform, and must suballocate at least

95% of grants to LEAs.

In making grants to LEAs, each LEA first receives an amount equal to its
FY2001 grant under the two antecedent programs. Remaining funds, if any, are
allocated as follows: 20% on the basis of total population aged 5-17, and 80% on the
basis of population aged 5-17 in poor families. LEAs may use these grants for
purposes that include recruiting and retaining highly qualified teachers, and
professional development activities for teachers and principals, consistent with a
locally developed needs assessment.
Foundation Grant. In the allocation of grants to states, if sufficient funds are
available, each state first receives an amount equal to the total of the grants it
received for FY2001 under two antecedent programs: the Eisenhower Professional
Development Program authorized under Title II, Part B, of the ESEA as in effect
immediately preceding enactment of the NCLB, and the Class Size Reduction
Program authorized under Section 306 of the Department of Education
Appropriations Act, 2001 (P.L. 106-554).
In the suballocation of state grants to LEAs, if sufficient funds are available,
each LEA first receives an amount equal to the total of the grants it received for
FY2001 under the same two antecedent programs. If an LEA did not receive a grant
under one or both of the antecedent programs in FY2001, its foundation grant is to
be equal to the amount it would have received if it had participated in each program
that year.
The antecedent programs and their allocation formulas continue to substantially
influence the distribution of current grants under Title II-A, as the FY2001
appropriation for state grants under these programs ($2,062,620,000) constitutes
approximately 71% of the FY2008 appropriation for state grants under Title II-A
($2,920,572,000). The formulas for the two antecedent programs may be briefly
described as follows:
Eisenhower Professional Development Program: In the allocation of grants to states,
50% of funds were allocated on the basis of grants under Title I-A, and 50% on the
basis of population aged 5-17, with a 0.5% state minimum. For substate allocations
to LEAs, 50% of funds were allocated on the basis of total public and private school
enrollment, and 50% on the basis of Title I-A grants.
Class Size Reduction Program: Allocations of the amounts available for state grants
were initially calculated using: (1) the Eisenhower Professional Development
Program formula (above), and (2) the ESEA Title I-A formula. The greater of these
two amounts was selected for each state, then these amounts were ratably reduced to
the available state grant funding level, while applying a 0.5% state minimum. For
substate allocation to LEAs, 20% of funds was allocated on the basis of total public
and private school enrollment, and 80% on the basis of school-age children in poor
families.

Thus, the foundation grants incorporate a mixture of factors related to poverty or
Title I-A grants, plus total school-age population or enrollment. In particular, the
substate allocation formula for Title II-A is very similar to the substate formula for
the Class Size Reduction Program. Overall, while proportions differ, formulas for
the antecedent programs are similar to the factors used to allocate the remaining Title
II-A funds, although less current population and other data are involved since the
foundation grants are based on FY2001 population and other factors.
Population Factor. In the allocation of funds to states, 35% of funds above the
amount necessary to provide foundation grants is allocated on the basis of total
school-age population (ages 5-17) and 65% on the basis of school-age population in
poor families. In the suballocation of state total grants to LEAs, 20% of funds above
the amount necessary to provide foundation grants is allocated on the basis of total
school-age population and 80% on the basis of school-age population in poor
families.
LEA Minimum Grant or “Hold Harmless” Level. There is no direct LEA “hold
harmless” provision, but see the foundation grant entry above.
Minimum State Grant. Each state is to receive a minimum of 0.5% of total grants
(i.e., both the foundation grant formulas and the formula for allocation of funds
above the foundation grant level incorporate a 0.5% state minimum).
Ratable Reduction. If funds are insufficient to provide full foundation grants to
each state, grants are reduced by the same percentage for all states until they equal
the aggregate level of appropriations.
Fiscal Requirements. Title II-A is one of may “covered programs” to which a
general ESEA maintenance of effort requirement applies. Recipient LEAs must
provide, from state and local sources, a level of funding (either aggregate or per
pupil) in the preceding year that is at least 90% as high as in the second preceding
year. In addition, Title II-A funds must be used so as to supplement, and not
supplant, state and local funds that would otherwise be available for activities
authorized under this program.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state under the Title II-A formula. One-half of one percent
of total Title II-A state grants is reserved for grants to the Bureau of Indian Affairs
and the same amount is reserved for the Outlying Areas.
Other Reservations from Appropriations. At the state level, up to 5% of grants
may be reserved for administration and other state activities. Of this amount, the
lesser of: (i) 2.5% of each state’s grant, or (ii) an annually specified lower percentage
that would result in a national total of $125 million, may be reserved for grants to
local partnerships consisting of an institution of higher education, a college-level
school of arts and sciences, and a high need LEA (with either 10,000 or more
children from poor families or a school-age poverty rate of at least 20%, and a high
percentage of teachers who are not highly qualified).

Teacher and Principal Training and Recruiting Fund Allocation Formula
Stage 1: Calculation of State Total Teacher and Principal Training and
Recruiting Fund Allocations
If appropriations are equal to or less than the FY2001 level
Step 1: Final State Grant = ( S_EIS_01 + S_CSR_01 ) * ( APP / APP_01 )
In Step 1, if appropriations are equal to or less than the FY2001 level, each state
receives an equal proportion of its FY2001 grants under the two antecedent
programs. This proportion is equal to the total amount available for state grants in
the current year (after all national reservations) divided by the comparable amount
for FY2001.
If appropriations exceed the FY2001 level
Step 1: Preliminary State Grant = S_EIS_01 + S_CSR_01 + ( EXCESS * 0.35 ) * (
POP / 3 POP ) + ( EXCESS * 0.65 ) * ( POV / 3 POV )
In Step 1, if total appropriations exceed those for the two antecedent programs in
FY2001, each state first receives its FY2001 grant under those programs. Of the
remaining funds available for state grants, 35% is allocated in proportion to state
share of total population aged 5-17, and 65% is allocated in proportion to population
aged 5-17 in poor families.
Step 2: Final State Grant = Preliminary State Grant * S_MIN_ADJ, or S_MIN if
greater
In Step 2, if total state grant appropriations exceed the FY2001 level, each state’s
final grant is equal to the greater of: (i) the amount calculated in Step 1 multiplied by
a (downward) adjustment to pay for increased grants to states where the initial (Step

1) grant was less than the minimum, or (ii) the state minimum.

Stage 2: Calculation of Teacher and Principal Training
and Recruiting Fund LEA Allocations
If appropriations are equal to or less than the FY2001 level
Final LEA Grant = ( L_EIS_01 + L_CSR_01 ) * ( S_ALL / S_ALL_01 )
If appropriations are equal to or less than the FY2001 level, each LEA receives an
equal proportion of its FY2001 grants under the two antecedent programs. This
proportion is equal to the total amount available for state grants in the current year
(after all national reservations) divided by the comparable amount for FY2001.
If appropriations exceed the FY2001 level
Final LEA Grant = L_EIS_01 + L_CSR_01 + ( POP / 3 POP ) * ( S_EXCESS *

0.2 ) + ( POV / 3 POV ) * ( S_EXCESS * 0.8 )

Of the state total allocation, after LEAs receive their foundation grants (FY2001
amounts under the two antecedent programs), 20% of the excess state allocation is
allocated on the basis of each LEA’s share of the state total of the total population
aged 5-17, and 80% on the basis of population aged 5-17 from poor families.
Where:
S_EIS_01 = State total Eisenhower Professional Development Program grant,
FY2001
S_CSR_01 = State total Class Size Reduction Program grant, FY2001
APP = Appropriation (for the current year)
APP_01 = Total appropriation for FY2001 state grants under the Eisenhower
Professional Development and Class Size Reduction Programs ($2,062,620,000)
EXCESS = Appropriation in excess of total Eisenhower Professional Development
Program and Class Size Reduction Program grants, FY2001
POP = Total population aged 5-17
POV = Population aged 5-17 in poor families
S_MIN == State minimum allocation
S_MIN_ADJ = State minimum adjustment (proportional increase (in small states)
or decrease (in other states) to apply the statewide minimum grant)
L_EIS_01 = LEA Eisenhower Professional Development Program grant, FY2001
L_CSR_01 = LEA Class Size Reduction Program grant, FY2001
S_ALL = State total allocation for grants to LEAs, current year
S_ALL_01 = State total allocation for grants to LEAs under the antecedent programs,
FY2001
S_EXCESS = State allocation for grants to LEAs, current year, in excess of the
FY2001 level
3 = Sum (for all states in the nation in Stage 1, and for all LEAs in the state in Stage

Title II, Part B: Mathematics and Science Partnerships
Part B authorizes grants to eligible partnerships — that include an SEA, an
engineering, mathematics, or science department of an institution of higher education
(IHE), and a high-need LEA — for activities that include professional development,
summer workshops or institutes, and recruitment of mathematics and science
teachers, as well as development of rigorous curricula in these fields. Title II-B funds
are allocated to states by formula if appropriations are equal to or greater than $100
million, as has been the case in recent years.
Population Factor. Children aged 5-17 in poor families, according to the latest
available estimates for LEAs from the Census Bureau.
Minimum State Grant. Each state is to receive a minimum of 0.5% of total funds
available for grants to states.
Fiscal Requirements. Title II-B funds must be used so as to supplement, and not
supplant, state and local funds that would otherwise be available for the activities
authorized under this program.

Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico and the Outlying Areas are treated fully as states.
Other Reservations from Appropriations. Of the total amount appropriated for
Title II-B, 0.5% of total appropriations is reserved for a national evaluation. There
is no specific authority for this reservation in Title II-B itself, rather it appears to be
an exercise of general authority — in ESEA Title IX, Part F — for the Secretary to
reserve up to 0.5% of appropriations for any ESEA programs, except those under
Titles I and III, for evaluation activities.
Mathematics and Science Partnerships Allocation Formula
State Grant = [ ( PF / 3 PF ) * APP ] * S_MIN_ADJ, or S_MIN if greater
Each state receives a Mathematics and Science Partnerships grant equal to the greater
of (1) its proportional share of the population factor for all states, adjusted
downward to provide funds to raise the smallest states to the state minimum level,
or (2) the state minimum grant.
Where:
PF = Population factor
APP = Appropriation for Mathematics and Science Partnerships grants to states
S_MIN_ADJ = State minimum adjustment (proportional decrease to apply the
statewide minimum grant)
S_MIN = State minimum grant

3 = Sum (for all states)

Title II, Part D: Education Technology State Grants
Part D authorizes the Education Technology State Grants (EdTech) program,
which is intended to help elementary and secondary schools improve student
academic achievement by utilizing technology. Formula grants are made to states
based on the proportion of Title I-A funds received by each state relative to the total
amount of funding provided through Title I-A. States subsequently award 50% of the
grants in the form of formula subgrants to all eligible LEAs³⁴ that submit an
application for authorized activities. Each LEA receives the same proportion of
funding from the 50% that it received under Title I, Part A for the same year. The
remaining EdTech funds are awarded competitively to high-need districts or local
partnerships³⁵ through a state- determined, competitive process.³⁶ All local formula

³⁴ An “eligible” LEA is a “high-need” LEA, defined as an LEA that (i) is a current recipient
of funds under Title I, Part A of the ESEA, (ii) is among the LEAs in the state with the
highest numbers or percentages of children from low-income families, and (iii) either has
one or more schools identified for improvement under ESEA Title I-A or has a substantial
need for assistance in acquiring or using technology.
³⁵ A local partnership includes at least one high-need LEA, and at least one of the following:
an LEA that can demonstrate that teachers in schools served by the LEA are effectively
(continued...)

and competitive grant recipients must use at least 25% of the funds received for
continual and effective professional development. Other funds may be used for
relevant technology-related purposes, such as the development or expansion of the
Internet and other technology efforts to connect schools and teachers with parents and
students. The discussion below relates only to the portion of Title II-D funds that is
allocated by formula.
Title I-A Grant Factor. Grants are allocated to states in proportion to total Title I-A
grants (calculated as if no LEA hold harmless were applied).
Minimum State Grant. Each state is to receive at least 0.5% of total state grants.
Maximum SEA and Eligible Entity Reservations for Administration,
Evaluation, and Technical Assistance. No recipient of funds may use more than
5% of the funds received for administrative costs or technical assistance, of which
not more than 60% may be used by the recipient for administrative costs.
Fiscal Requirements. Title II-D is one of may “covered programs” to which a
general ESEA maintenance of effort requirement applies. Recipient LEAs must
provide, from state and local sources, a level of funding (either aggregate or per
pupil) in the preceding year that is at least 90% as high as in the second preceding
year. Title II-D funds must also be used to supplement, not supplant, state and local
funds that would otherwise be available for the activities authorized under this
program.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state. Grants to the Outlying Areas are provided through
a reservation of 0.5% of Title II-D appropriations specifically available for state and
local technology grants. Grants to the Bureau of Indian Affairs are provided through
a reservation of 0.75% of Title II-D appropriations specifically available for state and
local technology grants.

³⁵ (...continued)
integrating technology and proven teaching practices into classroom instruction; an
institution of higher education that is not identified by the state as low-performing and that
is in compliance with the reporting requirements for its teacher education program as
mandated by Section 207(f) of the Higher Education Act of 1965; a for-profit business or
organization that develops, designs, or manufactures technology products or services, or that
has substantial expertise in the application of technology in instruction; or a public or
private non-profit organization with demonstrated experience in the application of
technology in instruction.
³⁶ Prior to distributing competitive grants, the SEA must establish the minimum amount of
each grant to ensure that the grant amount will be effective to administer the proposed
technology plan. Second, the SEA must determine which LEAs would have received a
formula grant that was not of sufficient size to be effective, and give them priority in the
competition. Finally, the SEA must ensure an equitable distribution of the competitive
subgrants between rural and urban areas according to the need demonstrated by the schools
within the LEA.

Other Reservations from Appropriations. Not more than 2% of the total Title II-D
appropriation may be reserved for studies and other national technology activities.
Education Technology State Grants Allocation Formula
Stage 1: Calculation of State Total Education Technology Grant
State Grant = [ ( T1A / 3 T1A ) * APP ] * S_MIN_ADJ, or S_MIN, if greater
Each state receives an EdTech grant equal to its proportional share of total grants
under ESEA Title I, Part A, adjusted downward to provide funds to raise the smallest
states to the state minimum level. If funds are sufficient, no state receives less than
its minimum grant amount.
Stage 2: Calculation of LEA Formula Grant
LEA Grant = ( L_T1A / 3 L_T1A ) * ST_APP]
Each LEA receives an EdTech grant equal to its proportional share of total grants
provided to LEAs in the state under ESEA Title I, Part A.
Where:
T1A = State total grant under ESEA Title I, Part A, but calculated as these grants
would be if no LEA hold harmless were applied
APP = Appropriation
S_MIN_ADJ = State minimum adjustment (proportional decrease to apply the
statewide minimum grant)
S_MIN = State minimum grant
L_T1A = LEA total grant under ESEA Title I, Part A
ST_APP = Amount of state total grant used to made formula grants to LEAs

3 = Sum (for all states or LEAs)

Title III-A, English Language Acquisition State Grants
Title III-A³⁷ authorizes formula grants to states to ensure that limited English
proficient (LEP) students and immigrant children develop English proficiency.³⁸
Grants to the 50 states, the District of Columbia, and Puerto Rico are determined
based on the state’s proportional share of LEP students and immigrant students
relative to the U.S. population of LEP students and immigrant students. For the
purposes of this report section, the term “state” includes the District of Columbia and
the Commonwealth of Puerto Rico.
States are required to distribute funds to eligible local entities³⁹ based on the
number of LEP students in schools served by the entity relative to the total
population of LEP students served by all eligible entities in the state. If this
calculation would result in an eligible entity receiving a grant of less than $10,000,
the SEA may not provide the subgrant. While 95% of the state allocation must be
distributed to the local level, the SEA must reserve up to 15% of its allotment to
award subgrants to eligible entities that have experienced a “significant increase” in
the percentage or number of immigrant students who have enrolled during the prior
fiscal year in public and non-public elementary and secondary schools in the
geographic area served by the eligible entity. These subgrants, however, do not have
to be awarded by a formula.
Population Factors. Grants are determined based on the state’s proportional share
of LEP students and immigrant students relative to the U.S. population of LEP
students and immigrant students. These shares are then weighted with a higher

³⁷ If appropriations are less than $650 million, Title III-A is no longer applicable and
Improving Language Instruction Programs (Title III-B) would be implemented. Title II-B
would provide competitive, rather than formula, grants to eligible entities. Since the
enactment of NCLB, appropriations have not fallen below the $650 million threshhold.
Therefore, Title III-B is not discussed in this report.
³⁸ Statutory language defines a limited English proficient student to be (1) a student ages 3
to 21, (2) who is enrolled or is preparing to enroll in an elementary or secondary school, (3)
who was not born in the United States or whose native language is a language other than
English, who is a Native American or Alaska Native, who is a native of the outlying areas,
who comes from an environment where a language other than English has had an impact on
the student’s level of English language proficiency, or is a migratory student whose native
language is not English and who comes from an environment where English is not the
dominant language, and (4) whose difficulties in speaking, reading, writing, or
understanding English may prevent a student from reaching the proficient level on state
assessments required under Title I-A, succeeding in classrooms where English is the
language of instruction, or participating fully in society (Section 9101). Statutory language
defines an immigrant student as an individual ages 3 to 21 who was not born in any state,
and has not been attending a school in the United States for more than three full academic
years (Section 3301). These latter students are referred to as immigrant or recent immigrant
students throughout this report.
³⁹ An eligible entity is defined as (1) one or more LEAs, or (2) one or more LEAs working
in collaboration with an institution of higher education, community-based organization, or
SEA (Section 3141).

weight (0.8) being assigned to the state’s population of LEP students and a lower
weight (0.2) being assigned to the state’s population of recent immigrant students.
In determining the number of LEP and immigrant students in an individual state and
in the United States, statutory language directs ED to use “the more accurate” of (1)
data available from the American Community Survey (ACS), or (2) the number of
children being assessed for English proficiency as required under Title I-A of the
ESEA.⁴⁰ In practice, ED has been using the ACS data to make state allocations since
FY2005. Title III grants for a specific fiscal year have been based on ACS data from
two years prior. For example, FY2008 grants are based on the 2006 ACS data.
Minimum State Grant. No state can receive a grant of less than $500,000.
Maximum SEA and LEA reservations for Administration, Evaluation, and
Technical Assistance. Each SEA may not reserve more than 5% of its allotment to
carry out professional development activities, planning, evaluation, administration,
technical assistance, or recognition of subgrantees that have exceeded their annual
measurable achievement objectives. Each eligible entity receiving funds may not use
more than 2% of such funds for administration.
Fiscal Requirements. Title III-A is one of may “covered programs” to which a
general ESEA maintenance of effort requirement applies. Recipient LEAs must
provide, from state and local sources, a level of funding (either aggregate or per
pupil) in the preceding year that is at least 90% as high as in the second preceding
year. In addition, Title III funds must be used so as to supplement the level of
federal, state, and local funds that, in the absence of Title III funds, would have been
expended to support programs for LEP and immigrant children and youth. Further,
Title III funds shall not be used to supplant such federal, state, and local funds; that
is, Title III funds may not be used to pay for services that, in the absence of Title III⁴¹
funds, would be required to be provided by other federal, state, or local funds.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state, but its grant may not exceed 0.5% of the total
available for state grants. Grants to the Outlying Areas are provided through a
reservation of 0.5% of the total Title III-A appropriations. There is no specific
reservation for the Bureau of Indian Affairs, but funds are available to support
students in BIA schools (see below).
Other Reservations from Appropriations. The Secretary of Education is required
to reserve the greater of 0.5% or $5 million of the total Title III-A appropriation for

⁴⁰ More specifically, Section 1111(b)(7) requires states to assess the English language skills
of students with limited English proficiency on an annual basis.
⁴¹ More specifically, states, LEAs, and schools are required by law to provide a free public
education to all students and are required to provide core language instruction educational
programs and services for LEP students based on Title VI of the Civil Rights Act of 1964.
Thus, Title III funds must be used to supplement instruction and services required by other
provisions of law. For more information, see
[http://previ ew.ed.gov/progr ams/sfgp/legi slation.html ].

grants to eligible entities that operate elementary, secondary, and postsecondary
schools predominantly for Native American and Alaska Native children. Eligible
entities include, for example, an Indian tribe or an elementary or secondary school
that is operated or funded by the BIA. The Secretary is also required to reserve 6.5%
of the total Title III-A appropriation for national activities. Of the reserved funds, not
more than 0.5% of total Title III-A appropriations may be used for evaluation
activities, and not more than $2 million may be reserved for the National
Clearinghouse for English Language Acquisition and Language Instruction
Educational Programs (NCELA).
English Language Acquisition State Grants Allocation Formula
Stage 1: Calculation of State English Language Acquisition Grant
State Grant = [ (( LEP / 3 LEP ) * 0.8) + ((RIM / 3 RIM ) * 0.2) * APP ] *
S_MIN_ADJ, or S_MIN, if greater
Each state receives an English Language Acquisition grant equal to its proportional
share of LEP children and recent immigrant children weighted by 0.8 and 0.2,
respectively, adjusted downward to provide funds to raise the smallest states to the
state minimum level.
Stage 2: Calculation of English Language Acquisition Grant for an Eligible
Entity
Eligible Entity Grant = (EE_LEP / 3 EE_LEP) * ST_APP
Each eligible entity receives an English Language Acquisition grant equal to its
proportional share of LEP students in schools served by the eligible entity. If this
calculated amount is less than $10,000, the eligible entity may not receive a grant.
Where:
LEP = Number of limited English proficient students in a state
RIM = Number of recent immigrant children and youth in a state
APP = Appropriation
S_MIN_ADJ = State minimum adjustment (proportional decrease to apply the
statewide minimum grant)
S_MIN = State minimum grant
EE_LEP = Number of limited English proficient students in schools served by the
eligible entity
ST_APP = Amount of state total grant used to made formula grants to eligible
entities

3 = Sum (for all states or eligible entities)

Title IV, Part A: Safe and Drug-Free
Schools and Communities
Title IV-A is the federal government’s major initiative to prevent drug abuse
and violence in and around schools. One-half of state grant funds is allocated on the
basis of total population aged 5-17, and one-half is allocated in proportion to Title
I-A Concentration Grants, with a minimum grant amount of the greater of 0.5% of
total funding for state grants or each state’s grant for FY2001. SEAs subsequently
make formula grants to LEAs based on each LEA’s share of total Title I-A funding
(60%) and share of enrollment in public and private non-profit elementary and
secondary schools (40%). Title IV-A also provides funds to state governors to create
programs to deter youth from using drugs and committing violent acts in schools, and
for national programs supporting a variety of national leadership projects designed
to prevent drug abuse and violence in elementary and secondary schools (e.g., the
Safe Schools/Healthy Students initiative).
Population Factor. In the allocation of funds to states, 50% of the appropriations
available for grants to states is allocated in proportion to total school-age (ages 5-17)
population.
In the allocation of state total grants to LEAs, 40% of state total funds is
distributed on the basis of total K-12 enrollment in public and private, non-profit
schools.
Title I-A Grant Factor. In the allocation of funds to states, 50% of the
appropriations available for grants to states is allocated in proportion to Title I-A
Concentration Grants (calculated as if no LEA hold harmless were applied).
In the allocation of state total grants to LEAs, 60% of state total funds is
distributed in proportion to total Title I-A grants.
Minimum State Grant. If sufficient funds are appropriated, each state is to receive
the greater of two minimum amounts: (a) 0.5% of total allocations to states; or (b)
a hold harmless amount equal to the state’s FY2001 allocation under this program.
If appropriations are insufficient to provide the full FY2001 minimum to all states,
as has been the case in some recent years, each state receives an equal proportion of
its FY2001 grant. (Since the 0.5% minimum was applied to FY2001 grants as well,
this also provides each state with at least 0.5% of current state grants.)
Fiscal Requirements. Title IV-A is one of many “covered programs” to which a
general ESEA maintenance of effort requirement applies. Recipient LEAs must
provide, from state and local sources, a level of funding (either aggregate or per
pupil) in the preceding year that is at least 90% as high as in the second preceding
year. Also, Title IV-A funds must be used so as to supplement, and not supplant,
state and local funds that would otherwise be available for the activities authorized
under this program.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state. Grants to the Outlying Areas are provided through

reservation of the greater of 1% of state grant appropriations, or $4,750,000,
whichever is greater, to be allocated among the Outlying Areas at the discretion of
the Secretary. An additional 1% of state grants or $4,750,000 (whichever is greater)
is reserved for the Bureau of Indian Affairs, and 0.2% of state grants is reserved for
programs serving Native Hawaiians.
Other Reservations from Appropriations. At the national level, of the total
amount appropriated for state grants under Title IV-A, up to $2 million may be
reserved for a national evaluation. At the state level, the chief state executive officer
may reserve up to 20% of state total grants for competitive grants. Of the remaining
state funds, up to 3% may be reserved by the SEA for state administration costs, and
up to 5% for statewide activities; regardless of these separate limits, at least 93%
(i.e., not 92%) of state grants remaining after the state’s chief executive officer’s
reservation is to be allocated to LEAs.
Safe and Drug Free Schools and Communities Allocation Formula
Stage 1: Calculation of State Total Safe and Drug-Free Schools and Communities
Allocations
Step 1: Preliminary State Grant = ( APP * 0.5 ) * ( T1A_CON / 3 T1A_CON ) +
( APP * 0.5 ) * ( PF / 3 PF )
In Step 1, one-half of the appropriations available for state grants is multiplied by the
state share of the national total of Title I-A Concentration Grants, and one-half is
multiplied by the state share of the population factor.
Step 2: S_MIN = Greater of ( APP * 0.005 ) or FY2001 Grant
In Step 2, the state minimum is calculated as the greater of 0.5% of total state grants
or each state’s Safe and Drug-Free Schools and Communities grant for FY2001.
Step 3a: If appropriations exceed the FY2001 level
Final State Grant = Preliminary State Grant * S_MIN_ADJ, or S_MIN if greater
In Step 3a, if total state grant appropriations exceed the FY2001 level
($439,250,000), each state’s final grant is equal to the amount calculated in Step 1
multiplied by a (downward) adjustment to pay for increased grants to states receiving
the minimum grant amount, or the state minimum, which is greater.
Step 3b: If appropriations are equal to or less than the FY2001 level
Final State Grant = S_MIN * ( APP / APP_01 )
In Step 3b, if appropriations are equal to or less than the FY2001 level, each state
receives an equal proportion of its FY2001 grant. This proportion is equal to the total
amount available for state grants in the current year (after all national reservations)
divided by the comparable amount for FY2001.

Stage 2: Calculation of LEA Safe and Drug-Free Schools and Communities
Allocations
Final LEA Grant = ( PF / 3 PF ) * ( S_ALL * 0.4 ) + ( T1A / 3 T1A ) * ( S_ALL
* 0.6 )
Of the state total allocation, 40% is allocated on the basis of each LEA’s share of the
state total of the population factor, and 60% on the basis of total Title I-A grants.
Where:
APP = Appropriation (for the current year)
T1A_CON = Title I-A Concentration Grants (calculated as if no LEA hold harmless
were applied)
PF = Population factor
S_MIN = State minimum allocation
S_MIN_ADJ = State minimum adjustment (proportional increase (in small states)
or decrease (in other states) to apply the statewide minimum grant)
APP_01 = Appropriation for FY2001 ($439,250,000)
S_ALL = State total allocation (less funds reserved by the SEA and the chief state
executive officer)
T1A = Total Title I-A Grants
3 = Sum (for all states in the nation in Stage 1, and for all eligible LEAs in the state
in Stage 2)
Title IV, Part B: 21^st Century Community Learning Centers
Title IV-B supports activities provided during non-school hours that offer
learning opportunities for school-aged children. Formula grants are made to states
based on state shares of Title I-A grants. States subsequently award grants to local
entities (e.g., LEAs, community-based organizations) on a competitive basis for a
period of three to five years. SEAs are required, to the extent possible, to distribute
funds equitably among the various geographic areas within the state, including urban
and rural communities. Eligible entities are to serve primarily students who attend
schools eligible for schoolwide programs under Title I-A⁴² and the families of these
students. Eligible entities may use funds for before- and after-school activities that
advance student academic achievement. The program’s focus, however, is currently
on providing after-school activities for children and youth, and literacy-related
activities for their families.
Title I-A Grant Factor. Grants are allocated to states in proportion to total Title I-A
grants (calculated as if no LEA hold harmless were applied).
Minimum State Grant. Each state is to receive at least 0.5% of total state grants.

⁴² In general, 40% or more of the pupils in a school must be from low-income families in
order for the school to qualify for a schoolwide program under ESEA Title I-A.

Fiscal Requirements. Title IV-B is one of many “covered programs” to which a
general ESEA maintenance of effort requirement applies. Recipient LEAs must
provide, from state and local sources, a level of funding (either aggregate or per
pupil) in the preceding year that is at least 90% as high as in the second preceding
year. Also, Title IV-B funds must be used so as to supplement, and not supplant,
state and local funds that would otherwise be available for the activities authorized
under this program.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs. Puerto
Rico is treated as a state. Grants to the Outlying Areas and the Bureau of Indian
Affairs are provided through reservation of up to 1% of total Title IV-B
appropriations.
Other Reservations from Appropriations. At the national level, of the total
amount appropriated for Title IV-B, up to 1% may be reserved by the Secretary for
national activities. At the state level, up to 2% of grants may be reserved for
administration and up to 3% for evaluation and technical assistance.
21^st Century Community Learning Centers Allocation Formula
State Grant = [ ( T1A / 3 T1A ) * APP ] * S_MIN_ADJ, or S_MIN, if greater
Each state receives a 21^st Century Community Learning Center grant equal to its
proportional share of total grants under ESEA Title I, Part A, multiplied by a
(downward) adjustment to pay for increased grants to states receiving the minimum
grant amount, or the state minimum, which is greater.
Where:
T1A = State total grant under ESEA Title I, Part A, but calculated as these grants
would be if no LEA hold harmless were applied
APP = Appropriation for state grants
S_MIN_ADJ = State minimum adjustment (proportional decrease to apply the
statewide minimum grant)
S_MIN = State minimum grant

3 = Sum (for all states)

Title V, Part A: Innovative Programs
Title V, Part A authorizes the Innovative Programs block grant, under which aid
may be provided to SEAs and LEAs that could be used for an especially wide range
of educational services and activities. Part A grants are allocated to states on the
basis of total population aged 5-17, with a state minimum grant amount of 0.5% of
total funding for state grants. At least 85% of Title V-A funds must be allocated by
SEAs to LEAs on the basis of state-developed formulas that take into consideration
each LEA’s enrollment of pupils in public and private schools, with adjustments to
provide increased grants per pupil to LEAs with the greatest numbers or percentages
of “high cost” pupils, including those from economically disadvantaged families and
those living in sparsely populated areas or areas of concentrated poverty. Because
the formulas for suballocation of state total grants to LEAs are developed by the

states, the discussion below will focus on the national formula for allocation to states
only.
Of the Part A funds that may be retained by states (i.e., up to 15% of state total
grants), no more than 15% of these amounts may be used for administrative costs;
remaining funds reserved by states are to be used for one or more of seven specified
types of programs and services, including the broad categories of statewide education
reform, school improvement programs and technical assistance activities. LEAs may
use their Part A funds for any of 27 different types of “innovative assistance
programs.” Whereas several of these are relatively specific (e.g., programs to provide
same gender schools and classrooms), others are more general (e.g., promising
education reform projects). Although this program and its direct predecessors were
funded for each of FY1982-2007, no appropriation was provided for this program for
FY2008.
Population Factor. In the allocation of funds to states, the population factor is total
school-age (5-17 years) children. While substate allocation formulas are ultimately
determined by the states, for the suballocation of state grants to LEAs, the population
factor is each LEA’s enrollment of pupils in public and private schools, with state-
determined adjustments to provide increased grants per pupil to LEAs with the
greatest numbers or percentages of “high cost” pupils, including those from
economically disadvantaged families and those living in sparsely populated areas or
areas of concentrated poverty.
State Minimum. Each state is to receive at least 0.5% of total state grants.
Fiscal Requirements. Under a separate (but substantively identical to others in the
ESEA) maintenance of effort requirement, recipient states must provide, from state
and local sources, a level of funding (either aggregate or per pupil) in the preceding
year that is at least 90% as high as in the second preceding year. In addition, funds
must be used so as to supplement, and not supplant, any other state, local or federal
funds.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state. One percent of total appropriations is reserved for
grants to the Outlying Areas. The Bureau of Indian Affairs receives no funds under
this program.
Other Reservations from Appropriations. Of the total received by each state, an
amount equal to at least 85% of the state’s FY2002 grant, plus 100% of the excess
over FY2002 (50% for states receiving the minimum grant), must be allocated to
LEAs. Remaining funds, if any, could be used for state level activities, with a
maximum of 15% of these used for administration.
Innovative Programs Allocation Formula
State Grant = ( PF / 3 PF) * APP * S_MIN_ADJ, or S_MIN if greater
State grants are equal to the state share of the population factor, multiplied by the
appropriation, multiplied by a (downward) adjustment to pay for increased grants to

states receiving the minimum grant amount, or the state minimum, whichever is
greater.
Where:
PF = Population factor
APP= Appropriation
S_MIN_ADJ = State minimum adjustment (proportional increase (in small states)
or decrease (in other states) to apply the statewide minimum grant)
S_MIN = State minimum

3 = Sum (for all states)

Title VI, Part A, Subpart 1: State Assessment Grants
Subpart 1 of Title VI-A authorizes grants to states for the development and
enhancement of assessments meeting the requirements of Title I-A. In the allocation
of funds, each state first receives $3 million per year, and remaining funds, if any, are
allocated in proportion to population aged 5-17. Of the amount appropriated for this
program each year, a minimum or “trigger” amount is to be allocated as state formula
grants.⁴³ Funds appropriated each year for state assessment grants that are in excess
of “trigger” amounts are to be used for enhanced assessment grants, that are allocated
through competition, not a formula. For FY2008, the “trigger” amount is $400
million; therefore, $400 million is allocated by formula, and the remainder of the
FY2008 appropriation for Title VI-A ($8,732,000) is allocated competitively.
Foundation Grant. Each state initially receives $3 million per year.
Population Factor. After the payment of foundation grants to each state, remaining
funds, if any, are allocated to states in proportion to total population aged 5-17.
Fiscal Requirements. Title VI-A-1 funds must be used so as to supplement, and not
supplant, state and local funds that would otherwise be available for the activities
authorized under this program.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state. Of the total appropriated for Title VI-A-1, 0.5% is
reserved for grants to the Outlying Areas and 0.5% for the Bureau of Indian Affairs.
State Assessment Grants Allocation Formula
State Grant = $3,000,000 + ( ( PF / 3 PF ) * ( APP - $156,000,000) )
Each state receives $3 million plus a share of remaining funds that is proportional to
its share of total school-age (5-17) population in all of the states.

⁴³ States may delay, by one year, the implementation of certain Title I-A assessment
provisions if an amount less than the minimum is appropriated for state assessment
(formula) grants.

Where:
PF = Population factor
APP = Appropriation for State Assessment Grants formula grants to states (i.e.,
“trigger” amount)

3 = Sum (for all states)

Title VI, Part B, Subpart 1: Small, Rural School
Achievement Program
Subpart 1 of Title VI-B authorizes the Small, Rural School Achievement
Program (SRSA), that provides flexibility in the use of funds under several ESEA
programs to rural LEAs with fewer than 600 pupils (or meeting certain other criteria).
Eligible LEAs may also receive additional grants, although these are offset by
amounts received by these LEAs under certain ESEA programs. Among ESEA
formula grant programs, the SRSA is unique in that an initial grant, ranging from
$20,000 to $60,000, is first calculated for each eligible LEA. Then, the amounts
received by each LEA under certain ESEA programs (see below) is subtracted from
the initial grant, and the final grant to each LEA is the remainder (if any) after this
deduction. The rationale for this procedure is that the SRSA is intended to
supplement funds provided under certain other ESEA programs. SRSA funds may
be used for any purpose authorized under ESEA Title I, Part A (Education for the
Disadvantaged), Title II, Part A (Teacher and Principal Training and Recruiting
Fund), Title II, Part D (Enhancing Education Through Technology), Title III (English
Language Acquisition), Title IV, Part A (Safe and Drug-Free Schools and^st
Communities), Title IV, Part B (21 Century Community Learning Centers), or Title
V, Part A (Innovative Programs).
Grants are calculated on the basis of LEAs. State total grants are simply the
total of final grants calculated on behalf of the state’s eligible LEAs.
Population Factor (initial grant calculation). The number of students in average
daily attendance (ADA) at the public schools operated by eligible LEAs.
Eligibility Criteria. Only small, rural LEAs are eligible for grants. These are
defined as LEAs in which all of the schools have a rural locale code,⁴⁴ and either the
total enrollment of the LEA is 600 or less, or the total population density of the
county in which the LEA is located is less than 10 persons per square mile. LEAs
receiving grants under this program are not eligible to receive a grant under Title VI,
Part B, Subpart 2 (below).

⁴⁴ For the SRSA program, the locale codes referred to in the ESEA are “metro-centric” codes
of 7 or 8. For an explanation of these and alternative systems of locale codes, see CRS
Report RL33804, Rural Education and the Rural Education Achievement Program (REAP):
Overview and Policy Issues, by Richard N. Apling and Jeffrey J. Kuenzi. The locale code
requirement may be waived by the Secretary if a state agency determines that the LEA is
located in a rural area.

Expenditure Factor. The initial grant for each eligible LEA is equal to $20,000 plus
$100 multiplied by the number of students in the population factor in excess of 50
students. The initial amount may not exceed $60,000.
Deduction from Initial Grant. Initial grants are reduced by the total of grants to the
LEA under the following programs: (1) the Teacher and Principal Training and
Recruiting Fund (ESEA Title II, Part A, Subpart 2); (2) Enhancing Education
Through Technology (ESEA Title II, Part D); (3) Safe and Drug-Free Schools and
Communities (Title IV, Part A); and (4) Innovative Programs (ESEA Title V, Part
A). If the total deduction is equal to or greater than the initial grant, the LEA
receives no funds under the SRSA program.
Ratable Reduction. After net initial grants are calculated, if appropriations are
insufficient to pay the total of these amounts, grants are reduced by the same
percentage for all LEAs until they equal the aggregate level of appropriations. If, on
the other hand, sufficient funds are available to give all eligible LEAs an amount in
excess of their initial grant, the initial grants are ratably increased, although the
$60,000 maximum grant is maintained.
Fiscal Requirements. SRSA funds must be used so as to supplement, and not
supplant, any other federal, state or local funds.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico and the Outlying Areas are treated as states. There is no provision for
grants to the Bureau of Indian Affairs.
Small Rural Schools Achievement Program Allocation Formula
Step 1: Initial Grant 1 = $20,000 + ( ( ADA - 50 ) * $100)
In Step 1, each LEA receives an initial grant of $20,000 plus $100 for each student
in average daily attendance in excess of 50 students.
Step 2: Initial Grant 2 = Initial Grant 1 or $60,000, whichever is less
In Step 2, a maximum of $60,000 is applied to the initial grant.
Step 3: Initial Grant 3 = Initial Grant 2 - ( T2A + T2D + T4A + T5A ) or $0,
whichever is greater
In Step 3, the LEA total of grants received under ESEA Title II, Part A; Title II, Part
D; Title IV, Part A; and Title V, Part A is subtracted from the amount calculated in
Step 2. If this amount is equal to zero or less, the LEA receives no SRSA grant.
Step 4: Final Grant = ( Initial Grant 3 / 3 Initial Grant 3 ) * APP
In Step 4, each eligible LEA receives a share of available appropriations that is
proportional to its grant amount calculated in Step 3.

Where:
ADA = LEA students in average daily attendance
T2A = LEA grant under ESEA Title II, Part A
T2D = LEA grant under ESEA Title II, Part D
T4A = LEA grant under ESEA Title IV, Part A
T5A = LEA grant under ESEA Title V, Part A
APP = Appropriation

3 = Sum (for all eligible LEAs)

Title VI, Part B, Subpart 2: Rural and Low-Income School
Program
Subpart 2 of Title VI-B authorizes the Rural and Low-Income School Program
(RLIS), under which grants are made to rural LEAs, defined somewhat differently
than under the SRSA program, that do not receive grants under the SRSA program
and that have a school-age child poverty rate of 20% or more. The RLIS grants may
be used for a variety of ESEA-related purposes, including (1) teacher recruitment,
retention, and professional development; (2) parental involvement activities; and (3)
activities authorized under ESEA Title I-A (Education for the Disadvantaged), Title
II-D (Education Technology), Title IV-A (Safe and Drug-Free Schools and
Communities), or Title III (English Language Acquisition).
Under the RLIS program, funds are generally allocated initially to SEAs, based
on the state total number of population factor students in eligible LEAs relative to the
national total of such students. However, if a SEA did not apply for RLIS grants,
eligible LEAs might apply directly to ED for RLIS funds, based on the LEA’s
number of population factor students relative to the national total of such students.
As of FY2007, all RLIS funds have been allocated via SEAs.
When RLIS grants are made via SEAs, states may suballocate funds among
eligible LEAs in one of 3 ways: (1) on a competitive basis; (2) on the basis of the
population factor used to allocate RLIS funds to states; or (3) on the basis of a state-
developed alternative formula, approved by the Secretary of Education, that increases
the share of funds going to LEAs with a concentration of children in poor families.
Population Factor. The RLIS population factor is the number of students in average
daily attendance (ADA) at the schools operated by eligible LEAs (see immediately
below).
Eligibility Criteria. Only rural LEAs with relatively high school-age child poverty
rates are eligible for grants. These are defined as LEAs in which all of the schools⁴⁵
have a rural locale code, and the percentage of school-age children from poor

⁴⁵ For the RLIS program, the locale codes referred to in the ESEA are “metro-centric” codes
of 6, 7 or 8. For an explanation of these and alternative systems of locale codes, see CRS
Report RL33804, Rural Education and the Rural Education Achievement Program (REAP):
Overview and Policy Issues, by Richard N. Apling and Jeffrey J. Kuenzi.

families is at least 20%.⁴⁶ LEAs receiving grants under the SRSA program (above)
are not eligible to receive a grant under the RLIS program.
Fiscal Requirements. RLIS is one of many “covered programs” to which a general
ESEA maintenance of effort requirement applies. Recipient LEAs must provide,
from state and local sources, a level of funding (either aggregate or per pupil) in the
preceding year that is at least 90% as high as in the second preceding year. In
addition, RLIS funds must be used so as to supplement, and not supplant, any other
federal, state or local funds.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico is treated as a state. One-half of one percent of total RLIS grants is
reserved for grants to the Bureau of Indian Affairs and the same amount is reserved
for the Outlying Areas.
Other Reservations from Appropriations. At the state level, up to 5% of grants
may be used for administration and technical assistance.
Rural and Low-Income Schools Allocation Formula
State Grant = ( ADA / 3 ADA ) * APP
The grant is equal to the state total number of students in average daily attendance
in schools operated by eligible LEAs compared to the national total number of such
students (where grants are made via SEAs, as is the case for all funds currently).
Where:
ADA = Students in average daily attendance in eligible LEAs
APP = Appropriation

3 = Sum (for all eligible LEAs)

⁴⁶ The poverty data used for this program are the same as those used for the ESEA Title I-A
program: Census Bureau estimates from the Small Area Income and Poverty Estimates
(SAIPE) program.

Title VII, Part A, Subpart 1: Indian Education Formula Grants
to Local Educational Agencies
Subpart 1 of Title VII-A authorizes grants to LEAs and to schools operated or
funded by the Bureau of Indian Affairs (BIA).⁴⁷ Eligible LEAs must generally meet
Indian pupil enrollment thresholds of at least 10 pupils or 25% of total enrollment.
Formula grants are allocated on the basis of the number of Indian pupils and the
greater of the average per pupil expenditure for the state or 80% of the national
average. The formula grants may be consolidated with grants under other federal
education programs serving Indian pupils (under a demonstration project authority);
and may be used for comprehensive programs of educational services for Indian
pupils, such as culturally related activities and curriculum content, substance abuse
prevention, and family literacy programs.⁴⁸ The state total for this program is the
sum of grants awarded to eligible LEAs in the state.
Population Factor. Indian children and youth enrolled in educational programs
provided by an LEA.
Eligibility Threshold. In most cases, LEAs are eligible for grants if they enroll at
least 10 Indian pupils or Indian pupils constitute at least 25% of total enrollment.
These thresholds do not apply to LEAs located in Alaska, California, or Oklahoma,
or on or near an Indian reservation. Eligible LEAs must establish a committee, a
majority of whose members are parents of Indian children, to develop a program for
the use of funds received under this Subpart. If the LEA fails to meet this
requirement, an Indian tribe representing at least one-half of the Indian children
served by the LEA may apply for the grant.
Expenditure Factor. The expenditure factor is the state average per pupil
expenditure in average daily attendance, or 80% of the national average, whichever
is greater.
Ratable Reduction. After maximum grants (population factor multiplied by the
expenditure factor) are calculated, if appropriations are insufficient to pay the
maximum amounts, these amounts are reduced by the same percentage for all LEAs
until they equal the aggregate level of appropriations, subject to the LEA minimum
grant provision (below).
LEA Minimum Grant. If sufficient funds are available, each eligible LEA is to
receive a minimum of $3,000. This minimum may be raised to $4,000 “if the
Secretary determines such increase is necessary to ensure the quality of the programs
provided” (Sec. 7113(b)(3)).

⁴⁷ The ESEA statute refers to the BIA. However, in practice, the BIA has been superceded
by the Bureau of Indian Education (BIE).
⁴⁸ For additional information on ESEA Title VII-A-1, see CRS Report RL34205, Federal
Indian Elementary- Secondary Education Programs: Background and Issues, by Roger
Walke.

Fiscal Requirements. Recipient LEAs must provide, from state and local sources,
a level of funding (either aggregate or per pupil) in the preceding year that is at least

90% as high as in the second preceding year.

Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
Puerto Rico and the outlying areas are treated as states. The Bureau of Indian Affairs
(Education) receives a grant under the same formula as used for grants to LEAs,
based on the total number of Indian students enrolled in schools funded by the
Bureau.
Other Reservations from Appropriations. At the LEA level, up to 5% of grants
may be reserved for administration.
Indian Education Allocation Formula
Step 1: Preliminary LEA Grant = PF * EF
In Step 1, maximum grants, equal to the population factor multiplied by the
expenditure factor, are calculated for each LEA meeting the Indian student
enrollment eligibility threshold (where applicable).
Step 2: LEA Grant 2 = ( Preliminary LEA Grant / 3 Preliminary LEA Grant ) *
APP * L_MIN_ADJ,
or L_MIN if greater
In Step 2, maximum grants, as calculated in Step 1, are adjusted through application
of the LEA minimum grant provision.
Where:
PF = Population factor
EF = Expenditure factor
APP = Appropriation
L_MIN_ADJ = LEA minimum grant adjustment (proportional decrease, in LEAs
not benefitting from the minimum LEA grant provision, to apply the LEA
minimum grant)
L_MIN = LEA minimum grant

3 = Sum (for all eligible LEAs)

Title VIII (Section 8003(b)): Impact Aid, Payments for
Federally Connected Children: Basic Support Payments
The Impact Aid program compensates LEAs for “substantial and continuing
burden” resulting from federal activities. These activities include federal ownership
of certain federal lands, as well as the enrollments in LEAs of children of parents
who work or live on federal land. The federal government provides compensation
because these activities deprive LEAs of the ability to collect property or other taxes
from these individuals even though LEAs are obligated to provide free public
education to their children. Section 8003(b) authorizes payments directly to LEAs

to compensate them for the cost of serving certain groups of federally connected
children.⁴⁹ The presence of these children can increase the number of children the
LEA must serve without providing a commensurate increase in taxes that support
public education. To be eligible for 8003(b) payments, an LEA must have at least
400 federally connected children, or such children must represent at least 3% of an
LEA’s average daily attendance (ADA).⁵⁰
Population Factors. Each federally connected child is assigned to a category that
has a specific weight associated with it. These weights are used to produce a
weighted student count for each LEA that is used to determine grant amounts. The
weights assigned to each category are shown in Table 12. Federally connected
children receiving the highest weights (i.e., 1.0 or above) have historically been
referred to as “a” children, while students with lower weights have been referred to
as “b” children.⁵¹
Table 12. Weights Applied to Specific Categories of Federally
Connected Children (Section 8003(a)(1))
Shorthand
Children Attending School in the LEA Who...WeightDesignation
reside on federal property with a parent employed on1.0“a” children
federal property situated in whole or in part within the
boundaries of the LEA; (A)(i)
reside on federal property with a parent who is an official1.0“a” children
of, and accredited by, a foreign government and is a
foreign military officer; (A)(ii)
reside on federal property and have a parent on active duty1.0“a” children
in the uniformed services; (B)
reside on Indian lands; (C)1.25“a” children
have a parent on active duty in the uniformed services but0.2“b” children

do not reside on federal property; (D)(i)
⁴⁹ Federally connected children are children who reside with a parent who is a member of
the Armed Forces living on or off federal property; reside with a parent who is an accredited
foreign military officer living on federal property; reside on Indian lands; reside in low-rent
public housing; or reside with a parent who is a civilian working or living on federal land.
⁵⁰ In addition, to receive payments for children of parents employed, but not residing, on
federal property or certain children residing on federal property, an LEA must serve 1,000
or more of such children or such children must represent at least 10% of the LEA’s total
ADA.
⁵¹ These references are derived from a subsection of the previous Impact Aid statute (P.L.
81-874). Although no longer relevant to the current law, these shorthand designations are
still widely used.

Shorthand
Children Attending School in the LEA Who...WeightDesignation
have a parent who is an official of, and has been accredited0.2“b” children
by, a foreign government and is a foreign military officer
but do not reside on federal property; (D)(ii)
reside in low-rent public housing; (E)0.1“b” children
reside on federal property and are not described in0.05“b” children
Subparagraph (A) or (B); (F)
reside with a parent who works on federal property0.05“b” children
situated
— in whole or in part in the county in which such LEA is
located, or in whole or in part in such LEA if such LEA is
located in more than one county; (G)(i); or
— if not in such county, in whole or in part in the same
State as such LEA; (G)(ii)
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Expenditure Factor. Grants are calculated in part based on a local contribution rate
(LCR). For most LEAs, the LCR used in this calculation is either one-half of the
state APPE or one-half of the national APPE.⁵²
Fiscal Requirements. An LEA is eligible for a basic support payment for any fiscal
year only if the state SEA finds that either the combined fiscal effort per student or
the aggregate expenditures of that LEA and the state with respect to the provision of
free public education by that agency for the preceding fiscal year was not less than
90% of such combined fiscal effort or aggregate expenditure for the second preceding
fiscal year.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
LEAs in Puerto Rico and the Virgin Islands serving federally connected children are
eligible to receive grants. Grants are not made to Outlying Areas or the BIA.
Impact Aid Basic Support Payments Allocation Formula
Step 1: WSC = 3 (FCC * WGT)
In Step 1, a weighted student count is calculated by multiplying each federally
connected child by the appropriate weight and summing the total of these
cal cul at i ons.

⁵² Two other LCRs are used less frequently: (1) the previously determined LCR for
comparable districts with unusual circumstances, such as those serving a particularly large
number of disabled children, or (2) the state APPE times the local contribution percentage
(i.e., the percentage of educational revenues that comes from the local level).

Step 2: MBSP = WSC * LCR
In Step 2, the weighted student count calculated in Step 1 is multiplied by a local
contribution rate to determine the LEA’s maximum basic support payment.
Step 3: LOT = ADA% + EXP%
In Step 3, an LEA’s Learning Opportunity Threshold (LOT) percentage is calculated.
An LEA’s LOT percentage is based on (1) the percentage of an LEA’s average daily
attendance that is composed of federally connected children plus (2) the percentage
of an LEA’s total current expenditures that is composed of Section 8003 payments.
The LOT percentage cannot exceed 100%.
Step 4: LOT_P = MBSP * LOT
In Step 4, an LEA’s maximum basic support payment is multiplied by its LOT
percentage. This payment is known as an LEA’s LOT payment. If appropriations
are not sufficient to make 100% of LOT payments, LOT payments are (ratably)
reduced. If appropriations exceed the amount needed to make LOT payments, but
are not enough to provide maximum basic support payments, the percentage of LOT
paid is increased.⁵³
Where:
WSC = Weighted student count
FCC = Federally connected children
WGT = Weights for categories of federally connected children
MBSP = Maximum basic support payment
LCR = Local contribution rate
ADA% = Percentage of an LEA’s average daily attendance that is composed of
federally connected children
EXP% = Percentage of an LEA’s total current expenditure that is composed of
Section 8003 payments
LOT = Learning Opportunity Threshold percentage
LOT_P = LOT payment

3 = Sum (for weighted student count)

⁵³ For example, if there was only enough funding to provide 100% of LOT, then an LEA
with a LOT percentage of 60% and a maximum basic support payment of $2 million would
receive $1.2 million. However, if there was enough to pay 125% of LOT, the LEA would
receive $1.5 million.

Title VIII (Section 8003(d)): Impact Aid, Payments for
Federally Connected Children: Payments for Children with
Disabilities
Section 8003(d) authorizes payments directly to LEAs based on the number of
certain federally connected children with disabilities who are eligible to receive⁵⁴
services under the Individuals with Disabilities Education Act (IDEA). More
specifically, payments are limited to certain IDEA-eligible children, most notably
those whose parents are members of the Armed Forces (residing on or off military
bases) and those residing on Indian lands.⁵⁵
Population Factors. Weighted child counts are calculated for eligible federally
connected children who are also eligible for IDEA by multiplying eligible “a”
children by a factor of 1.0 and eligible “b” children by a factor of 0.5.⁵⁶ An LEA’s
payment is its percentage share of the total weighted child count multiplied by the
funds appropriated for Section 8003(d).
Fiscal Requirements. An LEA is eligible for a basic support payment for any fiscal
year only if the state SEA finds that either the combined fiscal effort per student or
the aggregate expenditures of that LEA and the state with respect to the provision of
free public education by that agency for the preceding fiscal year was not less than
90% of such combined fiscal effort or aggregate expenditure for the second preceding
fiscal year.
Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
LEAs in Puerto Rico and the Virgin Islands serving federally connected children are
eligible to receive grants. Grants are not made to Outlying Areas or the BIA.
Impact Aid Payments for Children with Disabilities Allocation Formula
Step 1: WSC = [(HWC * 1.0) + (LWC * 0.5)]
In Step 1, a weighted student count is calculated by multiplying each federally
connected child eligible for IDEA by the appropriate weight.

⁵⁴ For more information about IDEA, see CRS Report RS22590, The Individuals with
Disabilities Education Act (IDEA): Overview and Selected Issues, by Richard N. Apling and
Nancy Lee Jones.
⁵⁵ LEAs may only receive payments under Section 8003(d) for federally connected children
with disabilities who reside on or off federal property with a parent on active duty in the
uniformed services, reside on or off federal property with a parent who is an official of a
foreign government and is a foreign military officer, or reside on Indian lands.
⁵⁶ Federally connected children eligible for the highest weight (1.0) include children who
reside on federal property with a parent on active duty in the uniformed services, reside on
federal property with a parent who is an official of a foreign government and is a foreign
military officer, or reside on Indian lands. Children living off federal property with a parent
on active duty in the uniformed services or reside off federal property with a parent who is
an official of a foreign government and is a foreign military officer receive the lower weight.

Step 2: LEA grant = (WSC /3 WSC) * APP
In Step 2, an LEA’s weighted student count is divided by the total weighted student
count and multiplied by the appropriation for Section 8003(d) to provide each LEA
with a proportional share of available funds.
Where:
WSC = Weighted student count
HWC = Federally connected children with high weights
LWC = Federally connected children with low weights
APP = Appropriation

3 = Sum (of weighted student count for eligible LEAs)

Title VIII (Section 8007): Impact Aid, Construction Payments
Section 8007 provides funds for construction and facilities upgrading to certain
LEAs with high percentages of children living on Indian lands or children of military
parents. Of these funds, 40% are used to make formula grants, and 60% are used to
make competitive grants.⁵⁷ This discussion focuses on funds awarded by formula.
Formula grants are available to LEAs receiving Section 8003 payments and in which
either (1) students living on Indian land constitute at least 50% of the LEA’s total
student enrollment, or (2) military students living on or off base constitute at least
50% of the LEA’s total student enrollment. The funds available for formula grant
construction payments are divided equally between these two groups of LEAs (i.e.,
20% of total Section 8007 appropriation for each group). Grants for LEAs impacted
by military dependent students are determined by dividing the total amount of
available funding by the total number of weighted student units of military children
living on or off base across all eligible LEAs, and multiplying this result by the total
number of weighted student units of these children enrolled in an LEA. The same
calculation is made for LEAs impacted by children living on Indian lands.
Population Factors. At least 50% of an LEA’s total student enrollment must be
composed of either (1) military children living on or off base, or (2) children living
on Indian lands. These student counts are then multiplied by their relevant weights
to produce a weighted student count. (See discussion of Section 8003(b) for
additional information about these categories of students and the applicable weights.)

⁵⁷ Although statutory language mandates that 40% of the appropriations for Section 8007
be distributed through formula grants and 60% through competitive grants, in recent years,
the Labor, Health and Human Services, and Education Appropriations Acts have specified
that the funds be distributed solely through formula or competition. For example, for
FY2008, Section 8007 funds are being distributed only through competition in accordance
with the FY2008 Consolidated Appropriations Act (P.L. 110-161, Division G, Title III). In
FY2007, funds were distributed only by formula based in accordance with Section 104 of
P.L. 110-5, Revised Continuing Appropriations Resolution, 2007.

Treatment of Puerto Rico, Outlying Areas, and the Bureau of Indian Affairs.
LEAs in Puerto Rico and the Virgin Islands serving federally connected children are
eligible to receive grants. Grants are not made to Outlying Areas or the BIA.
Impact Aid Payments for Construction Allocation Formula (for formula grants
only)
Step 1: WSC = [(MB * 1.0) + (MOB *0.02)] or WSC = (CIL * 1.25)
In Step 1, a weighted student count is calculated by (1) multiplying the number of
military children living on or off base by the appropriate weight and adding the
results, or (2) multiplying the number of children living on Indian lands by the
appropriate weight.
Step 2: LEA grant = [(APP * 0.2) / (3WSC)] * WSC
In Step 2, the funds available for formula grants are divided equally between LEAs
in which military students living on or off base constitute at least 50% of the LEA’s
total student enrollment and LEAs in which students living on Indian lands constitute
at least 50% of the LEA’s total student enrollment (20% of the total Section 8007
appropriation going to each group). For example, grants for LEAs impacted by
military dependent students are determined by dividing the total amount of available
funding (20% of the Section 8007 appropriation) by the total number of weighted
student units of military children living on or off base across all eligible LEAs to
produce an amount per weighted child. This amount is then multiplied by the total
number of weighted student units of these children enrolled in the LEA. The same
calculation is made for LEAs impacted by children living on Indian lands.
Where:
WSC = Weighted student count
MB = Federally connected children with parent in the military and living on a
military establishment
MOB = Federally connected children with parent in the military and living off of a
military establishment
CIL = Children living on Indian lands
APP = Appropriation

3 = Sum (of weighted student count for eligible LEAs)

Analyses
This report concludes with a series of analyses of selected aspects of the ESEA
allocation formulas. Given space limitations, as well as the limited availability of
current grant data at the LEA level, all of these analyses are conducted at the state
(not LEA) level.
ESEA Allocations, and Total Federal Funds, Compared to
Total Revenues From All Sources for Public K-12 Education
Table 13, below, provides two different “federal share” calculations for each
state. The first of these compares total ESEA formula grant allocations for FY2006
to total revenues for public K-12 education for the 2005-2006 school year. The table
is sorted on the basis of this calculation, from lowest to highest. The second
calculation compares federal grants under all K-12 education programs administered
by ED, including not only the ESEA but also the Individuals with Disabilities
Education Act (IDEA) and other federal programs, to total public K-12 revenues for
2005-2006 (i.e., the same denominator as in the first comparison). Figure 1 further
illustrates this ESEA share for the states; states are again sorted according to the
ESEA share of total public K-12 revenues, from lowest to highest.
As seen in Table 13, the share of public K-12 education revenues that is
provided under ESEA programs varies substantially among the states, although
ESEA funding constitutes only approximately one-tenth or less of total public K-12
education revenues in all cases except Puerto Rico. The ESEA share of revenues is
lowest, 2.5% or less, for the states of Iowa, Massachusetts, Minnesota, Connecticut,
and New Jersey. These states have relatively low rates of poverty, so their grants
under Title I-A and other programs with formulas based on Title I-A grants are
relatively low. Also, three of these states (Connecticut, Massachusetts, and New
Jersey) have especially high levels of state and local source funding for public K-12
education, so federal grants are low in comparison.
At the other end of the scale, Puerto Rico is a special case, with an ESEA share
(21.3% of total revenues) that is at least twice as high as that of any state. Among
the states, the ESEA share is highest, at 8.4% to 10.7%, for the states of New
Mexico, Montana, North Dakota, South Dakota, and Alaska. These states receive
relatively high grants under the ESEA Impact Aid and Indian Education programs,
among others. In addition, Alaska, Montana, North Dakota, and (to a lesser extent)
South Dakota benefit substantially from the state minimum grant provisions in
several of the ESEA program formulas.
The total federal share of revenues is in most cases slightly more than twice the
ESEA share. For example, the national average for ESEA grants as a share of total
public K-12 education revenues is 4.1%, while the national average for total ED
funds as a share of public K-12 education revenues is 9.1%, a ratio of 2.2. States
where this ratio is much lower, 1.6 or below, include South Dakota, Montana,
Alaska, Wyoming, and North Dakota, plus Puerto Rico — all jurisdictions where the
ESEA share is relatively high. In contrast, states where the ratio of the total federal
share to the ESEA share is especially high, at 2.8 to 3.4, include Maine, Minnesota,

Louisiana, Utah, Mississippi, and Iowa. Most of these states have especially low
ESEA shares, but Louisiana and Mississippi have both relatively high ESEA shares
and high ratios of total federal share to ESEA share, indicating a comparatively high
level of support from both ESEA and other federal programs, as well as lower than
average non-federal revenues per pupil.
Table 13. ESEA Allocations, and Total Federal Source
Revenues, as a Percentage of Total Revenues From All Sources
for Public Elementary and Secondary Education, 2005-2006
ESEA Allocations,Total Federal Revenues
StateFY2006 as aPercentage of Totalas a Percentage of AllPublic K-12 Education
Revenues, 2005-2006Revenues, 2005-2006
National Average4.19.1
New Jersey1.94.4
Connecticut 1.9 4.8
Minnesota2.36.5
Massachusetts 2.4 5.6
Iowa2.58.6
Maryland2.66.2
Indiana2.76.9
New Hampshire2.75.5
Wisconsin2.86.0
Virginia2.86.7
Ohio3.07.6
Utah3.29.6
Pennsyl va nia 3.2 8.1
Colorado3.37.3
Kansas3.49.0
Nevada3.57.1
Michigan3.58.2
Maine3.59.9
Missouri3.78.9
Washington 3.7 9.0
Illinois3.88.4
New York3.87.2
Nebraska3.910.0
Georgia4.09.2
Rhode Island4.07.7
Oregon4.19.8
South Carolina4.110.2
Florida4.210.1
Delaware4.38.3
North Carolina4.310.8
Vermont4.47.6
T e nnessee 4.5 11.2
California 4.5 10.8
Hawaii4.68.3
Idaho4.710.8
Arka nsas 4.8 11.3

ESEA Allocations,Total Federal Revenues
StateFY2006 as aPercentage of Totalas a Percentage of AllPublic K-12 Education
Revenues, 2005-2006Revenues, 2005-2006
Texas5.012.0
Alabama5.012.0
Kentucky5.011.7
West Virginia5.312.0
Oklahoma6.013.4
Wyoming6.310.1
Louisiana 6.6 18.5
Arizona6.611.8
Mississippi 6.6 20.7
District of Columbia6.712.2
New Mexico8.414.5
Montana8.914.0
North Dakota9.615.8
South Dakota10.516.5
Alaska10.717.0
Puerto Rico21.332.0
^Sources^:^T^o^{tal ESEA}^allo^catioⁿ^s^d^a^{ta: U.S. Dep}^a^r^t^m^eⁿ^t^o^f^Ed^u^catioⁿ^,^B^u^d^g^{et Ser}^v^ice
^Fed^e^r^a^{l so}^u^r^{ce an}^d^to^{tal p}^u^b^{lic K-}¹²^ed^u^catioⁿ^r^e^v^eⁿ^u^e^{s d}^a^{ta: U.S. Dep}^a^r^t^m^eⁿ^t^o^f^E^d^u^catioⁿ^,
^Natioⁿ^a^{l Cen}^t^er^f^o^r^Ed^u^catioⁿ^{Statistics. T}^a^b^l^{e p}^r^ep^ar^ed^b^y^CRS.

Figure 1. ESEA and Total Federal Share of Public K-12 Education
Revenues

^P^uer^t^o^Rⁱ^c^o
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^M^ont^ana^Nor^t^{h D}^a^k^o^t^a
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^Maⁱⁿ^e^Mi^s^s^o^u^rⁱ
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⁰⁵¹⁰¹⁵²⁰²⁵³⁰³⁵
^Fe^de^r^a^l^S^h^a^r^e^of^R^e^v^e^nue^s^:^E^S^E^A^a^nd^Tot^a^l
^ES^{EA Sh}^a^r^e^To^t^a^l^F^e^d^e^r^a^l^S^h^a^r^e
State Expenditure and Effort Factors and Equity Multiplier
Tables 14, 15, and 16, along with Figures 2, 3, and 4, provide the state
expenditure, effort, and equity factors that are used in one or more of the ESEA Title
I-A allocation formulas.
Expenditure Factor. The expenditure factor is the most broadly influential
of these factors, as — in one form or the other — it applies to all Title I-A grants.
Further, all Title I-A formula factors apply indirectly to several other ESEA formulas.
As was discussed earlier, expenditure factors are intended to adjust for state or local
differences in the costs of providing public K-12 education, although they are often
criticized as reflecting differences in ability to pay for educational services as well.
One version of the Title I-A expenditure factor applies to all Title I-A formulas
except Education Finance Incentive Grants (EFIG), while the other version is used

in the calculation of EFIG Grants. These versions differ only with respect to the
constraints, expressed as a percentage of the national average per pupil expenditure,
applied to the state average per pupil expenditure (80%/120% of the national average
for three formulas, 85%/115% for EFIG Grants). In Table 14 and Figure 2, states
are sorted on the basis of the three-formula version of the expenditure factor, from
lowest to highest.
Ten states, those at the floor or the ceiling, are grouped at each end of the
expenditure factor scale for the three-formula version of the expenditure factor;
within each of the groups, states are listed in alphabetical order. For the EFIG Grant
version, even more states are grouped at the floor (15 states) or the ceiling (13 states),
since the bounds associated with this version of the expenditure factor are more
narrow. The remaining states are distributed throughout the range between these
bounds. While the state variation in expenditure values is not large in absolute terms,
the factor does have substantial influence on the size of Title I-A grants. Holding all
else constant, the expenditure factor provides grants that are 50% higher in states at
the maximum factor than in states at the minimum factor under the three-formula
version of the factor, and that are 35% higher in the EFIG Grant version.

Table 14. ESEA Title I-A Expenditure Factors, FY2007
Title I-A ExpenditureTitle I-A Expenditure
State Factor, FY2007 Factor, FY2007
(3 formulas; $) (EFIG formula; $)
Alabama 2,810.56 2,986.22
Arizona 2,810.56 2,986.22
Idaho 2,810.56 2,986.22
Mississippi 2,810.56 2,986.22
Neva da 2,810.56 2,986.22
North Carolina2,810.562,986.22
Oklahoma 2,810.56 2,986.22
Puerto Rico2,810.562,986.22
T e nnessee 2,810.56 2,986.22
Utah 2,810.56 2,986.22
Florida 2,866.80 2,986.22
T e xas 2,924.80 2,986.22
South Dakota2,948.002,986.22
North Dakota2,967.202,986.22
New Mexico2,969.202,986.22
California 3,022.00 3,022.00
Arka nsas 3,051.60 3,051.60
South Carolina3,077.203,077.20
Louisiana 3,098.40 3,098.40
Missouri 3,107.60 3,107.60
Washington 3,138.80 3,138.80
K e ntucky 3,159.60 3,159.60
Io wa 3,163.60 3,163.60
Colorado 3,178.40 3,178.40
Georgi a 3,203.20 3,203.20
Oregon 3,291.20 3,291.20
Montana 3,340.00 3,340.00
K a nsas 3,415.20 3,415.20
Minnesota 3,506.80 3,506.80
West Virginia3,537.203,537.20
Nebraska 3,573.60 3,573.60
V i rginia 3,614.00 3,614.00
Indiana 3,662.00 3,662.00
Hawaii 3,720.80 3,720.80
Ohio 3,728.80 3,728.80
Illinois 3,794.40 3,794.40
Wisconsin 3,859.60 3,859.60
New Hampshire3,864.403,864.40
Michigan 3,949.60 3,949.60
Maryland 4,089.20 4,040.18
Pennsyl va nia 4,194.40 4,040.18
Wyoming 4,203.60 4,040.18
Alaska 4,215.84 4,040.18
Connecticut 4,215.84 4,040.18
Delaware 4,215.84 4,040.18
District of Columbia4,215.844,040.18
Maine 4,215.84 4,040.18

Title I-A ExpenditureTitle I-A Expenditure
State Factor, FY2007 Factor, FY2007
(3 formulas; $) (EFIG formula; $)
Massachusetts 4,215.84 4,040.18
New Jersey4,215.844,040.18
New York4,215.844,040.18
Rhode Island4,215.844,040.18
V e rmont 4,215.84 4,040.18
^Source:^Ex^pen^d^itu^{re f}^actors^{are calcu}^{lated by}^C^R^S^on^th^{e bas}ⁱ^s^of^av^erag^{e ex}^pen^d^itu^re
^p^e^r^p^u^p^{il d}^a^{ta f}^r^o^m^th^{e U.S. Dep}^a^r^t^m^eⁿ^t^o^f^Ed^u^catioⁿ^,^Natioⁿ^a^{l Cen}^t^er^f^o^r^Ed^u^catⁱ^oⁿ
^Statis^tics^.^T^a^{ble prepared by}^C^R^S.
Figure 2. State Expenditure Factor for ESEA Title I-A (3 Formulas)

^E^x^pe^ndⁱ^t^u^r^e^F^a^c^t^or
^$2,⁵⁰⁰^$²^,⁷⁰⁰^$2,⁹⁰⁰^$3,¹⁰⁰^$^3,³⁰⁰^$3,⁵⁰⁰^$3,⁷⁰⁰^$^3,⁹⁰⁰^$4,¹⁰⁰^$4,³⁰⁰^$⁴^,⁵⁰⁰
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^T^enne^s^s^e^e^Ut^a^h
^Fl^o^rⁱ^d^a^Te^x^a^s
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^Ne^{w M}^e^xⁱ^c^o^Ca^lⁱ^f^orⁿⁱ^a
^A^r^k^a^ns^as^S^out^h
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^W^a^s^hⁱⁿ^gt^on^K^ent^uc^k^y
^Io^w^a^C^o^l^o^r^ado
^G^e^or^gi^a^O^r^egon
^M^oⁿ^t^ana^K^a^ns^as
^Mⁱ^nne^s^o^t^a^W^e^s^t^Vⁱ^r^gⁱⁿ^ia
^N^ebr^as^k^a^Vⁱ^r^gⁱⁿ^ia
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^Ne^{w J}^e^r^s^e^y^Ne^w^Y^o^r^k
^Rh^{ode I}^s^l^and^V^e^r^m^ont

Effort Factor. The effort factor used in the Title I-A EFIG Grant formula is
illustrated in Table 15 and Figure 3, below. As discussed above, this factor is
intended to reward states with relatively high levels of expenditures per pupil for
public K-12 education compared to their level of personal income per capita. This
factor is equal to the average per pupil expenditure (APPE) for public elementary and
secondary education divided by state personal income per capita (PCI) for each state,
divided by the national average of this ratio. In other words, it is the ratio of APPE
to PCI for each state divided by the ratio of APPE to PCI for the nation. The effort
factor is greater than 1.0 for states where the ratio of expenditures per pupil for public
elementary and secondary education to personal income per capita is greater than
average for the nation as a whole, and below 1.0 for states where the ratio is less than
average for the nation as a whole. However, the range of the effort factor is limited
to 0.95 to 1.05. The limited range, and therefore the limited impact on grant levels,
of this factor is evident. Only 14 states fall within the narrow range between the
minimum of 0.95 and the maximum of 1.05, while 18 states are at the minimum of
0.95 and the remaining 20 states are at the maximum of 1.05. If all other relevant
factors are held constant, a state with a maximum effort factor (1.05) would receive
an EFIG grant of 11% more than if its effort factor were at the minimum (0.95). As
a result, the factor has a limited impact on actual grants.
Table 15. ESEA Title I-A Effort Factor, FY2007
StateTitle I-A EffortFactor, FY2007
Alabama0.95
Arizona0.95
California0.95
Colorado0.95
Florida0.95
Idaho0.95
Minnesota0.95
Nevada0.95
North Carolina0.95
North Dakota0.95
Oklahoma0.95
Puerto Rico0.95
South Dakota0.95
Tennessee0.95
Texas0.95
Utah0.95
Virginia0.95
Washington0.95
Maryland0.9557
Mississippi 0.9714
Iowa0.9776
New Hampshire0.978
Missouri0.9805
Connecticut 0.9936
Illinois1.0258
Oregon1.0295
K a nsas 1.0306

StateTitle I-A EffortFactor, FY2007
Georgia1.0382
District of Columbia1.0387
Massachusetts 1.0394
Nebraska1.0403
New Mexico1.0474
Alaska1.05
Arkansas1.05
Delaware1.05
Hawaii1.05
Indiana1.05
Kentucky1.05
Louisiana1.05
Maine1.05
Michigan1.05
Montana1.05
New Jersey1.05
New York1.05
Ohio1.05
Pennsyl va nia 1.05
Rhode Island1.05
South Carolina1.05
Vermont1.05
West Virginia1.05
Wisconsin1.05
Wyoming1.05
^Source:^{Data f}^r^o^m^{U.S. Dep}^a^rtm^eⁿ^t^o^f^Ed^u^c^a^t^ioⁿ^,^Natioⁿ^a^l
^C^eⁿ^t^{er f}^o^{r Edu}^cation^Statis^tics^.^T^a^{ble prepared by}^C^R^S^.

Figure 3. Effort Factors for the Title I-A EFIG Formula, FY2007

^E^ffo^r^t^F^a^c^t^o^r
^0.⁹⁴^0.⁹⁶⁰^.⁹⁸¹¹^.⁰²¹^.⁰⁴¹^.⁰⁶
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^Mⁱⁿⁿ^es^ot^a^Nev^ada
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^S^out^{h Dak}^o^t^a^T^enne^s^s^e^e
^Te^x^a^s^Ut^ah
^Vⁱ^r^gⁱⁿ^ia^W^a^s^hⁱ^ngt^on
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^N^e^bras^k^a^Ne^{w M}^e^xⁱ^c^o
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^Del^a^ware^Hawaiⁱ
^Iⁿ^dⁱ^ana^K^e^nt^uc^k^y
^Loui^sⁱ^ana^Maⁱⁿ^e
^Mⁱ^c^hⁱ^gan^M^o^nt^ana
^Ne^{w J}^e^r^s^e^y^New^Y^o^rk
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^Wⁱ^scoⁿ^sⁱⁿ^Wy^o^mⁱⁿ^g
Equity Factor and Multiplier. Finally, the EFIG equity multiplier is
displayed in Table 16 and Figure 4. As discussed above, this factor is intended to
reward states with relatively equal levels of expenditures per pupil among their
LEAs. The equity multiplier is equal to 1.3 minus the state’s equity factor. The
equity factor is the coefficient of variation for average per pupil expenditure among
the state’s LEAs. In the CV calculations for this formula, an extra weight (1.4 vs.
1.0) is applied to estimated counts of children from poor families. As a result, the
lower a state’s expenditure disparities among its LEAs, the lower is its CV and equity
factor, and the higher is its multiplier. Conversely, the greater a state’s expenditure
disparities among its LEAs, the higher is its CV and equity factor, and the lower is
its multiplier.
Among the states, equity multipliers for FY2007 ranged from 1.0653 (Illinois)
to 1.3 for the single-LEA entities of the District of Columbia, Hawaii, and Puerto
Rico. Thus, all other relevant factors held constant, a state with a maximum
multiplier would receive an EFIG Grant of approximately 22% more than if it had
the lowest equity multiplier. States with the lowest equity multipliers (1.13 or

below), in addition to Illinois, include Montana, Virginia, Massachusetts, Missouri,
Wyoming, Vermont, and New York. States with the highest equity multipliers (1.21
or above), in addition to the 3 jurisdictions noted above, include West Virginia,
Florida, Iowa, Washington, Delaware, and North Carolina.
Table 16. ESEA Title I-A Equity Multiplier, FY2007
StateTitle I-A EquityMultiplier, FY2007
Illinois1.0653
Montana1.0998
Virginia1.1095
Massachusetts 1.1175
Missouri1.1207
Wyoming1.1213
Vermont1.1239
New York1.1272
Pennsyl va nia 1.1302
Idaho1.1307
New Jersey1.1451
Ohio1.1465
New Hampshire1.1493
Arizona1.1527
Michigan1.1577
Utah1.1620
Minnesota1.1650
South Dakota1.1669
Indiana1.1755
Tennessee1.1776
North Dakota1.1793
Maine1.1803
Nevada1.1807
Oklahoma1.1812
Connecticut 1.1829
Arkansas1.1840
Kentucky1.1847
Mississippi 1.1870
Maryland1.1895
Nebraska1.1908
South Carolina1.1911
Georgia1.1916
California 1.1957
Oregon1.1990
Rhode Island1.1999
Alaska1.2000
Kansas1.2000
New Mexico1.2000
Colorado1.2011
Alabama1.2064
Texas1.2067
Louisiana 1.2068

StateTitle I-A EquityMultiplier, FY2007
Wisconsin1.2083
North Carolina1.2131
Delaware1.2157
Washington 1.2174
Iowa1.2190
Florida1.2369
West Virginia1.2467
District of Columbia1.3000
Hawaii1.3000
Puerto Rico1.3000
^So^urc^e^:^{Data f}^r^o^m^{U.S. Dep}^a^r^t^m^eⁿ^t^o^f^Ed^u^catioⁿ^,^Natioⁿ^a^{l Cen}^t^er^f^o^r
^Edu^cation^Statis^tics^.^T^a^{ble prepared by}^C^R^S^.

Figure 4. State Equity Multipliers for the Title I-A EFIG
Formula, FY2007

¹¹^.⁰⁵¹^.1¹^.¹⁵¹^.²¹^.2⁵¹^.3¹^.³⁵
^I^l^lⁱ^noi^s^M^ont^an^a
^Vi^r^gⁱⁿⁱ^a^M^a^s^s^ac^hus^et^t^s
^Mis^s^o^u^rⁱ^Wy^o^mⁱⁿ^g
^Ve^r^m^oⁿ^t^Ne^{w Y}^o^rk
^P^e^nns^y^l^v^ani^a^I^dah^o
^Ne^w^Je^r^s^e^y^Ohi^o
^{New Ha}^m^p^s^hⁱ^r^e^Arⁱ^z^oⁿ^a
^Mi^c^hⁱ^g^aⁿ^Ut^ah
^Mⁱⁿ^nes^o^t^a^S^o^ut^{h Da}^k^o^t^a
^In^dⁱ^aⁿ^a^T^enne^s^s^e^e
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^Di^s^t^ri^c^t^of^Hawaⁱⁱ
^Pu^e^r^t^o^Rⁱ^co

State Population Size
Table 17 and Figure 5, below, provide state total ESEA formula grants per
child for FY2007 calculated on the basis of total school-age children and school-age
children in poor families. The states are sorted only on the basis of their total number
of school-age children, from largest (California) to smallest (District of Columbia).
As shown below, there is substantial variation in average grants per school-age
child as well as grants per school-age child in a poor family among states in all
population size ranges. For example, among the 5 smallest jurisdictions (Wyoming,
Vermont, North Dakota, Alaska, and the District of Columbia), the average grant per
school-age child ranges from $592 to $1,407, while the average grant per school-age
child from a poor family varies from $3,957 to $10,935. This variation results
largely from 3 factors: the varying impact of “caps” placed on state minimums under
the Title I-A allocation formulas; variations in school-age child poverty rates (a
higher poverty rate is associated with higher grants per school-age child but, at least
in the smallest states, lower grants per school-age child from a poor family); and the
eligibility of Alaska for substantial funds under Titles VII and VIII. Smaller, but still
substantial, variation also may be seen among states in other size ranges.
Nevertheless, overall the average grants per child are generally much higher for
the smallest states than for the remaining states. The average for the 12 smallest
jurisdictions (New Hampshire and smaller) is $644 per school-age child and $4,879
per school-age child from a poor family. Similarly, these jurisdictions received
5.18% of ESEA formula grants for FY2007, but have only 3.14% of the Nation’s
school-age children and 2.46% of the school-age children from poor families. In
contrast, the average for all of the other states plus Puerto Rico is $386 per school-
age child and $2,254 per school-age child from a poor family. Thus, the smallest
states receive approximately 1.7 times as much as the remaining states per school-age
child, and approximately 2.2 times as much per school-age child from a poor family.
This results primarily from the state minimum grant provisions in many of the ESEA
allocation formulas.
Although the differences in average grants per child between the smallest and
other states are quite substantial, the small states receive a relatively modest share of
total ESEA funds. The total share of funds received by the 12 smallest jurisdictions
(11 smallest states plus the District of Columbia) for FY2007 was 5.2%. Even if
these small states were to receive the same amount of ESEA funds per child as other
states, the net increase in funds reallocated to the larger states would be relatively
marginal. For example, if the share of funds going to the smallest states were
reduced by half, the average increase for the remaining states would be
approximately 2.7%.

CRS-85
Table 17. Total ESEA Grants Per Child for FY2007,
States Ranked by Their Total Number of School-Age Children
% Share of Total%Share of Total% Share of School-Total ESEATotal ESEA Grants
State ESEA Formula School-AgeAge Population in Grants ($) PerPer School-Age Child
Grants, FY2007 Population Poor Families School-Age Child From a Poor Family
National Average — — — 4042,375
California 12.74 12.47 13.06 413 2,316
T e xas 9.05 8.59 10.73 425 2,004
New York8.185.966.485542,997
Florida 4.41 5.37 5.17 332 2,025
Illinois 4.17 4.28 3.73 394 2,658
Pennsyl va nia 3.56 3.81 3.33 377 2,538
ⁱ^{ki/CRS-RL34721}Ohio 3.15 3.74 3.52 340 2,124
^g/wMichigan 3.27 3.36 3.37 392 2,304
^s^.orGeorgi a 2.97 3.33 3.32 361 2,129
^le^akNorth Carolina2.262.933.143121,713
New Jersey1.942.791.802802,560
^://wikiV i rginia 1.67 2.42 1.67 278 2,370
^h^ttpArizona 2.69 2.17 2.24 500 2,851
Indiana 1.61 2.13 1.81 306 2,112
Washington 1.70 2.06 1.59 333 2,550
T e nnessee 1.50 1.97 2.12 308 1,684
Massachusetts 1.53 1.96 1.41 315 2,578
Missouri 1.58 1.91 1.86 335 2,025
Maryland 1.34 1.82 1.07 297 2,966
Wisconsin 1.48 1.79 1.25 334 2,807
Minnesota 1.00 1.68 0.96 240 2,484
Colorado 1.05 1.56 1.11 271 2,243
Alabama 1.44 1.51 1.88 383 1,815
Louisiana 1.99 1.45 2.41 555 1,966
South Carolina1.331.421.643781,914
Puerto Rico3.041.404.418741,637

CRS-86
% Share of Total%Share of Total% Share of School-Total ESEATotal ESEA Grants
State ESEA Formula School-AgeAge Population in Grants ($) PerPer School-Age Child
Grants, FY2007 Population Poor Families School-Age Child From a Poor Family
K e ntucky 1.37 1.35 1.60 410 2,033
Oklahoma 1.27 1.18 1.32 434 2,294
Oregon 0.97 1.16 1.08 339 2,135
Connecticut 0.83 1.13 0.68 298 2,928
Utah 0.53 1.04 0.56 206 2,241
Mississippi 1.27 1.02 1.62 504 1,863
Io wa 0.57 0.96 0.63 241 2,162
Arka nsas 0.91 0.93 1.18 397 1,837
K a nsas 0.81 0.93 0.66 355 2,946
Neva da 0.60 0.86 0.64 279 2,214
ⁱ^{ki/CRS-RL34721}New Mexico1.130.660.906952,989Nebraska0.530.590.423622,965
^g/wIdaho 0.40 0.54 0.43 300 2,220
^s^.or
^le^akWest Virginia0.650.520.705012,208
New Hampshire0.310.410.193043,796
^://wikiMaine 0.38 0.39 0.31 395 2,857
^h^ttpHawaii 0.51 0.37 0.26 557 4,675
Rhode Island0.390.320.314993,030
Montana 0.54 0.30 0.29 730 4,404
Delaware 0.30 0.27 0.19 451 3,858
South Dakota0.540.260.228405,770
Alaska 0.85 0.24 0.18 1,407 10,935
North Dakota0.410.190.138777,591
V e rmont 0.27 0.18 0.12 592 5,447
Wyoming 0.32 0.17 0.10 772 7,564
District of Columbia0.360.140.211,0023,957
^Sources^:^T^o^tal^ESEA^allo^catioⁿ^s^d^a^{ta: U.S. Dep}^a^r^t^m^eⁿ^t^o^f^Ed^u^catioⁿ^,^B^u^dg^et^S^e^rvⁱ^ce.^Popu^l^a^tⁱ^oⁿ^dat^a^—^U^.^S^.^D^e^part^m^eⁿ^t^of^C^o^m^m^e^{rce, Bu}^reau^of
^th^{e C}^eⁿ^s^u^s^{, Sm}^{all A}^r^{ea In}^com^e^an^{d P}^o^v^e^rty^Es^tim^ates^P^r^og^ram^.^T^a^{ble prepared by}^C^R^S^.

Figure 5. ESEA Grants Per Child to States Sorted by Population Size

^Gr^aⁿ^t^s^P^e^{r C}^hⁱ^l^d
^$0^$2,⁰⁰⁰^$4,⁰⁰⁰^$^6,⁰⁰⁰^$^8,⁰⁰⁰^$10,⁰⁰⁰^$12,⁰⁰⁰
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ESEA Formula Grants and State Average
School-Age Child Poverty Rates
Table 18 and Figure 6 provide state total ESEA formula grants for FY2007 per
child (both total school-age population and school-age population in poor families)
with states sorted by their school-age child poverty rate, from lowest (New
Hampshire) to highest (Puerto Rico). The states are divided into three groups based
on their relative poverty rates.

Table 18. ESEA Formula Grants Per Child, FY2007, for States
Sorted by Their School-Age Child Poverty Rate
School-Age ChildTotal ESEA GrantsTotal ESEA Grants
StatePoverty Rate, 2006 (in %; based on incomePer School-AgePer School-AgeChild From a Poor
in 2005)Child ($)Family ($)
States with Relatively Low School-Age Child Poverty Rates
New Hampshire8.03043,796
Utah9.52062,241
Minnesota 9.6 240 2,484
Maryland 9.9 297 2,966
Connecticut 10.1 298 2,928
Wyoming 10.3 772 7,564
V e rmont 10.7 592 5,447
New Jersey10.82802,560
Io wa 11.1 241 2,162
Hawaii 11.3 557 4,675
North Dakota11.38777,591
Delaware 11.7 451 3,858
V i rginia 11.8 278 2,370
Wisconsin 11.9 334 2,807
K a nsas 12.0 355 2,946
Nebraska 12.2 362 2,965
Massachusetts 12.2 315 2,578
^Aver^{age for}^Low10.93092,820
^Pover^{ty Rate States}
States with Medium School-Age Child Poverty Rates
Colorado 12.3 271 2,243
Alaska 12.8 1,407 10,935
Washington 13.0 333 2,550
Neva da 13.0 279 2,214
Maine 13.7 395 2,857
Idaho 13.9 300 2,220
Indiana 14.5 306 2,112
South Dakota14.68405,770
Illinois 14.7 394 2,658
Pennsyl va nia 14.7 377 2,538
Ohio 15.9 340 2,124
Oregon 15.9 339 2,135
Rhode Island16.14993,030
Florida 16.4 332 2,025
Missouri 16.5 335 2,025
Montana 16.6 730 4,404
Michigan 16.8 392 2,304
^Aver^{age f}^o^r^M^e^di^um15.23632,393

^Pover^{ty Rate States}

School-Age ChildTotal ESEA GrantsTotal ESEA Grants
StatePoverty Rate, 2006 (in %; based on incomePer School-AgePer School-AgeChild From a Poor
in 2005)Child ($)Family ($)
States with Relatively High School-Age Child Poverty Rates
Georgi a 17.4 361 2,129
California 17.5 413 2,316
Arizona 17.9 500 2,851
New York18.05542,997
T e nnessee 18.6 308 1,684
North Carolina18.63121,713
Oklahoma 18.9 434 2,294
South Carolina19.93781,914
K e ntucky 20.2 410 2,033
Alabama 21.1 383 1,815
T e xas 21.5 425 2,004
Arka nsas 21.7 397 1,837
New Mexico22.56952,989
West Virginia22.65012,208
District of24.61,0023,957
Columbia
Mississippi 27.0 504 1,863
Louisiana 28.0 555 1,966
Puerto Rico52.78741,637
^Aver^{age f}^o^r^Hⁱ^gh20.44452,182
^Pover^{ty Rate States}
National Average17.04042,375
^Sources^:^T^o^{tal ESEA}^allo^catioⁿ^s^d^a^{ta: U.S. Dep}^a^r^t^m^eⁿ^t^o^f^Ed^u^catioⁿ^,^B^u^d^g^{et Ser}^v^{ice. P}^o^p^u^latioⁿ
^{data: U.S. Departm}^e^nt^o^f^C^o^m^m^e^{rce, B}^u^reau^of^th^{e C}^eⁿ^s^u^s^{, Sm}^{all A}^r^{ea In}^com^e^an^{d P}^o^v^e^rty
^Es^tim^ates^P^r^og^ram^.^T^a^{ble prepared by}^C^R^S^.

Figure 6. ESEA Grants Per Child by State Poverty Rate

Differences among states are less obvious or large than in the state population
size analysis above. However, especially if one focuses on groups of states according
to their school-age child poverty rate, as in Figure 6, two significant patterns appear.
First, the average grant per school-age child increases as the state average poverty
rate rises, from $309 per child for low poverty states to $363 for states in the middle
range to $445 for high poverty states, 1.44 times as much as for low poverty states.
This reflects the fact that most ESEA funds are allocated under, or in proportion to,
the Title I-A allocation formulas, and estimated school-age children in poor families
is the primary formula factor in those.
At the same time, an opposite trend is found in average grants per school-age
child in a poor family. This figure declines from $2,820 for low poverty states to
$2,393 for states in the middle range and $2,182 for states with the highest poverty
rates. This is a reflection of at least 3 factors. First, many of the states with the
lowest poverty rates are small, and receive high grants per child as a result of state
minimum provisions (e.g., New Hampshire, Wyoming, Vermont, North Dakota, and
Delaware). Second, a large proportion of the low poverty rate states have high
expenditure factors (e.g., Connecticut, New Jersey, Massachusetts, and others) while
a large proportion of the highest poverty rate states have low expenditure factors
(e.g., California, Arizona, Tennessee, North Carolina, Alabama, Arkansas,
Mississippi, and others). And third, the targeting on high poverty areas under the

Title I-A Concentration, Targeted, and Education Finance Incentive Grant formulas
is carried out at the LEA, not the state, level. As was noted above, these formulas
tend to favor LEAs with especially large numbers of school-age children in poor
families. In many cases, LEAs with such high concentrations of poverty are found
in states with low poverty rates overall (e.g., Baltimore City, Maryland or Boston,
Massachusetts), while in several states with high poverty rates, poverty tends to be
widely dispersed (e.g., West Virginia or Mississippi).