A r c h i v e d I n f o r m a t i o n

Mapping Out the National Assessment of Title I: the Interim Report - 1996

Section 6:
Effective Targeting of Title I Resources

Although Title I, funded at nearly $7 billion in FY 1995, is the largest federal program supporting elementary and secondary education, the number of children in poverty is growing and it is essential that Title I's resources be targeted effectively. The very neediest districts and schools clearly warrant the highest funding priority--evaluations show their children to be at greatest risk of school failure. Yet, historically, Title I funds have been spread thinly among many districts and schools, undermining the program's capacity to help high-poverty schools meet the high expectations set by policymakers. However, policymakers and administrators must balance the needs of the highest-poverty schools and districts with the needs of other communities that could lose Title I services if the funds are concentrated more intensively. This section examines how the balance struck in the legislation alters the distribution of Title I funds among states, school districts, and schools.

What the New Provisions Are

Title I funds are currently distributed through a three-stage process: the federal government allocates funds to the county level, states suballocate the funds to school districts, and districts select which schools are served. The new provisions will change the way funds are allocated to counties, districts, and schools.

Changes in Title I formulas that allocate funds to counties and school districts. Under the antecedent Chapter 1, 90 percent of the funds were distributed through Basic Grants, which go to almost all school districts, and 10 percent were distributed through Concentration Grants to districts with at least 15 percent poverty or more than 6,500 poor children. The new Title I should improve the targeting of funds to the districts and schools with the greatest needs, as well as the fairness and accuracy of allocations, by:

Allocating "new money" (funds above the FY 1995 level) in Title I through Targeted Grants, a weighted formula that provides higher per-pupil amounts to counties and districts with higher percentages or numbers of poor children.
Eliminating from the program school districts with 2 percent or fewer poor children.
Using Census Bureau poverty data that are updated once every two years rather than once a decade.
Moving to direct federal-to-district allocations by FY 1999.

However, several provisions temper these changes, diminishing improvements in targeting at the school district level:

First, the Targeted Grants formula is to be used only for new funds above the FY 1995 appropriated level; the Basic and Concentration formulas are retained for allocating the remaining amount, or "old money." The new formula will have a significant impact on targeting only if there is a substantial infusion of new money for Title I--but static or even declining levels of Title I funding currently appear more likely.
Second, another new Title I funding formula, the Education Finance Incentive Program, would (if funded) decrease targeting on the highest-poverty areas, largely because it would allocate funds based on counts of all school-age children rather than just poor children. This formula is intended to provide a financial bonus for states that have higher levels of education spending ("fiscal effort") and lower levels of disparity in funding among school districts ("fiscal equity").
Third, "hold-harmless" provisions delay the impact of the formula changes and give districts considerable time to adjust. In FY 1996 every school district is guaranteed 100 percent of its FY 1995 amount (unless appropriations decline). In future years, a complicated sliding scale will determine hold-harmless amounts based on the poverty level of the county or district.
Fourth, the reliability of the updated poverty estimates being developed by the Census Bureau is as yet untested. Work on the district-level updates and on a mandated National Academy of Sciences (NAS) evaluation of the Census updates has not yet begun, due to the FY 1995 rescissions and the delay in passing an FY 1996 appropriation; these delays may affect the usefulness and timeliness of the updates and the NAS evaluation.

Changes in how districts allocate funds to schools. Title I procedures require districts to rank-order their school attendance areas or schools based on the percentage of children from low-income families. Schools with a poverty rate at or above the district-wide average are eligible for Title I funds. New provisions that may increase the concentration of funds on high-poverty schools include:

Allocating funds to schools based on their number of low-income students rather than low-achieving students.
Requiring that schools with at least 75 percent poor students be served first, without regard to grade span--a provision intended to assure that high-poverty middle and secondary schools receive Title I services.
Changing special school eligibility rules to allow districts to serve schools below the district poverty average only if the school has a poverty rate of 35 percent or more.
Requiring districts to ensure that participating Title I schools receive an allocation per poor child of at least 125 percent of the district-wide allocation per poor child--a provision intended to prevent districts from spreading the funds too thinly across schools. (However, this provision does not apply if all participating schools are at least 35 percent poor).

What the National Assessment of Title I Has Learned

Targeting funds on high-poverty districts and schools is essential to fulfilling Title I's objective of closing the achievement gap between disadvantaged and advantaged students. In schools serving many children who live in poverty, academic performance tends to be low, and obstacles to raising performance tend to be great. Moreover, the number of poor children is rising, and these children are increasingly concentrated in high-poverty schools. We know that:

In schools with above-average poverty rates, the poverty level of the school influences the test scores of all children, including those from more advantaged families. Low-income students in high-poverty schools are doubly at risk; they have lower achievement levels than low-income students in low-poverty schools.
Achievement of the "average" student in high-poverty schools is lower than the achievement of Chapter 1 students in low-poverty schools (Puma, Jones, Rock, & Fernandez, 1993).
The number of poor children (under age 18) increased by 1 million between 1991 and 1994, from 14.3 million to 15.3 million (Bureau of the Census, 1996). The number of high-poverty schools increased by 14 percent over a similar period, from 19,500 in 1990-91 to 22,200 in 1993-94 (National Data Research Center, 1995).

Data from the 1993-94 Schools and Staffing Survey confirm previous findings that the former Chapter 1 formulas and within-district allocation provisions spread funds to 92 percent of all school districts and 62 percent of all public schools, yet left many of the nation's poorest schools unserved (National Data Research Center, 1995). Moreover, the share of funds allocated to high-poverty districts and schools did not compensate for the extra degree to which students in the highest-poverty communities are at risk of school failure. We have learned that:

At the county level, the counties in the highest-poverty quartile, which had 25 percent of all children and 45 percent of all poor children, received only 43 percent of Chapter 1 funds (U.S. Department of Education, 1993).
One-fifth (19 percent) of the highest-poverty schools did not receive any Chapter 1 funds; this occurred because high-poverty districts had only enough resources to reach the very highest-poverty schools. At the same time, almost half (45 percent) of low-poverty schools received Chapter 1 funds (National Data Research Center, 1995).
Many low-achieving students in high-poverty schools go unserved while higher-achieving students in low-poverty schools receive Chapter 1 services. One-third of the children in high-poverty schools who scored at or below the 35th percentile on reading tests did not receive Chapter 1 services (Puma et al., 1993).
High-poverty high schools and middle schools frequently went unserved as many districts focused their Chapter 1 funds on elementary schools, including those with lower poverty rates. Almost one-third (31 percent) of the highest-poverty high schools did not receive any Chapter 1 funds, even though funds went to over half (55 percent) of low-poverty elementary schools (National Data Research Center, 1995).
The allocation of funds to schools based on their number of low-achieving students penalized schools that were successful in using their Chapter 1 funds to increase student achievement. Indeed, 13 percent of principals in elementary schools reported that they had lost Chapter 1 funds as a result of improved student performance (Millsap, Moss, & Gamse, 1993).

The use of decennial census data to allocate funds has caused inequities because the data become increasingly out of date as the decade progresses. This continues to cause some concern for the 1990's. State allocations show substantial shifts from FY 1992 through FY 1995, reflecting the gradual phase-in of the shift from the 1980 to the 1990 census population counts. The general movement of funds has been toward faster-growing states in the West, displacing funding from older urban areas in the Northeast and Midwest.

Performance Criteria for the National Assessment
of Title I

Decisions on targeting reflect a balance between concentrating more funds on the highest- poverty schools and maintaining support for districts and schools with smaller concentrations of disadvantaged students. Although experts and policymakers may disagree on the desired level of targeting, in general the intent of the changes approved by Congress was to strengthen targeting of resources on higher-poverty schools. And there is at least consensus that using accurate information in the funding formula is essential.

However, whether the new law will significantly improve the targeting of Title I funds is uncertain, because the formula changes are largely dependent on increased funding for Title I and the reliability of updated Census poverty data is as yet unknown. School-level targeting may be more likely to improve, because the new within-district allocation rules are already being implemented. Performance indicators for assessing whether targeting improved include:

Fewer low-poverty school districts receive funds, and high-poverty districts receive a greater share of the funds.
Fewer low-poverty schools receive funds, and funds are concentrated on a smaller number of schools. Conversely, high-poverty schools receive a significant increase in funding and more high-poverty high schools are served.
Census poverty updates for counties and districts provide data for allocating Title I funds that are more accurate and reliable than the decennial census data.

Plans for Evaluating Progress

The National Assessment of Title I (NATI) will examine changes in the distribution of funds at the state, county, district, and school levels. To the extent possible, it will also examine the impact of formula allocations on the kinds of children served.

State and county allocations. Changes in Title I funding patterns among states and counties, by region and by poverty level, will be examined based on the Department's allocation data. This project will also incorporate available Census information on poverty trends and collect information on the criteria states use to suballocate funds. The analysis should be complete by January 1997 for FY 1996 funding patterns and by November 1997 for FY 1997 funding patterns.

Within-district allocations to schools. A Study of Intradistrict Targeting and Resource Allocation will examine resource issues, including how districts allocate Title I funds to schools, the poverty data used to determine eligibility, and exceptions made to the rules governing allocations. Special attention will be given to (1) allocations for high schools and middle schools, (2) the level of Title I funding in schoolwide programs compared to targeted assistance schools, (3) effects of the minimum allocation rule for Title I schools, (4) the extent to which waivers are used to provide Title I funds to schools that would not otherwise be eligible, and (5) the effects of any reductions in Title I funding. The Department expects to award a contract for the study by April 1996 and to obtain preliminary data for the National Assessment by fall 1996.

Title I participation and school poverty. The number of schools served at different poverty and grade levels will be examined based on data from the National Assessment of Educational Progress, which should become available by early 1997.

Census estimates. The National Academy of Sciences (NAS) will conduct a congressionally mandated study of the accuracy and reliability of Census poverty updates and the feasibility of accurately making federal allocations at the district level. The final report is due in December 1998, with an interim report in 1997. Award of this contract has been delayed by the FY 1995 rescissions and delay in passage of a FY 1996 budget; the impact of this delay on the usefulness and timeliness of the NAS reports is unknown.
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[Section 5: Title I Parent Involvement: Partnerships with Families, Schools, and Communities to Support Learning]

[Section 7: Plans for Evaluating Title I]