ESEA Title I-A Formulas: In Brief
Rebecca R. Skinner
Specialist in Education Policy
August 28, 2015
Congressional Research Service
7-5700
www.crs.gov
R44164
ESEA Title I-A Formulas: In Brief
Summary
Title I-A of the Elementary and Secondary Education Act (ESEA) authorizes the largest grant
program in the ESEA, funded at $14.4 billion in FY2015. It is designed to provide supplementary
educational and related services to low-achieving and other students attending pre-kindergarten
through grade 12 schools with relatively high concentrations of students from low-income
families. Under current law, the U.S. Department of Education (ED) determines Title I-A grants
to local educational agencies (LEAs) based on four separate funding formulas: Basic Grants,
Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG). Annual
appropriations bills specify portions of each year’s Title I-A appropriation to be allocated to LEAs
and states under each of these formulas.
For each formula, a maximum grant is calculated by multiplying a “formula child count,”
consisting primarily of estimated numbers of school-age children in poor families, by an
“expenditure factor” based on state average per pupil expenditures for public K-12 education. In
some formulas, additional factors are multiplied by the formula child count and expenditure
factor. These maximum grants are then reduced to equal the level of available appropriations for
each formula, taking into account a variety of state and LEA minimum grant and “hold harmless”
provisions. In general, LEAs must have a minimum number of formula children and/or a
minimum formula child rate to be eligible to receive a grant under a specific Title I-A formula.
Some LEAs may qualify for a grant under only one formula, while other LEAs may be eligible to
receive grants under multiple formulas. This report provides a general overview of the key
components of each of the formulas.
This report provides a summary of key changes to the Title I-A formulas proposed in the Student
Success Act (H.R. 5), as passed by the House, and the Every Child Achieves Act of 2015 (S.
1177), as passed by the Senate. Both bills would provide for a comprehensive reauthorization of
the ESEA and would make changes to the distribution of funds under Title I-A. H.R. 5 would
change the distribution of funds to LEAs and schools after ED has calculated grant amounts using
the aforementioned formulas. S. 1177 would alter the distribution of funds from LEAs to schools
and would add an additional formula to the four existing Title I-A formulas.
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ESEA Title I-A Formulas: In Brief
Contents
Introduction ..................................................................................................................................... 1
Overview of Title I-A Formulas ...................................................................................................... 1
Stages in the Grant Calculation Process .................................................................................... 2
Formula Child Count and Rate ................................................................................................. 2
Expenditure Factor .................................................................................................................... 3
Weighted LEA Formula Child Counts for the Targeted Grant and EFIG Formulas ................. 3
LEA Hold Harmless and State Minimum Grant Provisions ...................................................... 3
Factors Included Only in the EFIG Formula ............................................................................. 4
Allocations at the School Level ................................................................................................ 4
Summary of Key Changes Proposed to the Title I-A Formulas in the 114th Congress .................... 6
H.R. 5 ........................................................................................................................................ 7
S. 1177 ....................................................................................................................................... 7
Tables
Table 1. Overview of ESEA Title I-A Allocation Formula Characteristics ..................................... 5
Contacts
Author Contact Information ............................................................................................................ 8
Acknowledgments ........................................................................................................................... 8
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Introduction
Title I-A of the Elementary and Secondary Education Act (ESEA) authorizes the largest grant
program in the ESEA, funded at $14.4 billion in FY2015. It is designed to provide supplementary
educational and related services to low-achieving and other students attending pre-kindergarten
through grade 12 schools with relatively high concentrations of students from low-income
families. Under current law, the U.S. Department of Education (ED) determines Title I-A grants
to local educational agencies (LEAs) based on four separate funding formulas: Basic Grants,
Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG).1 After
calculating grants, ED provides each state with information on the grants calculated for LEAs in
it. The state then makes specific adjustments to the grant amounts, including reserving funds for
administration and school improvement and determining grants for charter schools that are their
own LEAs. After making adjustments to the grant amounts calculated by ED, the state then
provides funds to the LEAs. The LEAs, in turn, distribute funds to schools, often based on the
percentage of children in each school eligible for free or reduced-price lunch.2
This report provides a general overview of the key components of each of the four formulas used
to allocate Title I-A funds.3 Table 1 provides a summary of these components or “factors.” The
last section of the report provides a summary of key changes to the Title I-A formulas that have
been proposed in the 114th Congress during House and Senate consideration of bills to provide for
a comprehensive reauthorization of the ESEA.
Overview of Title I-A Formulas
Under Title I-A, funds are allocated to LEAs via state educational agencies (SEAs) using four
different allocation formulas specified in statute: Basic Grants, Concentration Grants, Targeted
Grants, and Education Finance Incentive Grants (EFIG).4 Annual appropriations bills specify
portions of each year’s Title I-A appropriation to be allocated to LEAs and states under each of
these formulas. In FY2015, about 45% of Title I-A appropriations were allocated through the
Basic Grants formula, 9% through the Concentration Grants formula, and 23% through each of
the Targeted Grants and EFIG formulas. Once funds reach LEAs, the amounts allocated under the
four formulas are combined and used jointly.
For each formula, a maximum grant is calculated by multiplying a “formula child count,”
consisting primarily of estimated numbers of school-age children in poor families, by an
“expenditure factor” based on state average per pupil expenditures for public K-12 education5. In
1For more information about how grants are determined under each of these formulas, see CRS Report RL34721,
Elementary and Secondary Education Act: An Analytical Review of the Allocation Formulas, by Rebecca R. Skinner.
2 Children living in households where income is up to 130% of the federal poverty level (FPL) are eligible for free
meals. Children living in households where income is over 130% but up to 185% of the FPL are eligible for reduced-
price meals. For more information, see Department of Agriculture, “Child Nutrition Programs—Income Eligibility
Guidelines,” 80 Federal Register 17026-17027, March 31, 2015, http://www.gpo.gov/fdsys/pkg/FR-2015-03-31/pdf/
2015-07358.pdf.
3 For more detailed information about the Title I-A formulas, seeCRS Report R40672, Education for the
Disadvantaged: Analysis of Issues for the ESEA Title I-A Allocation Formulas, by Rebecca R. Skinner, Education for
the Disadvantaged: Analysis of Issues for the ESEA Title I-A Allocation Formulas, by Rebecca R. Skinner.
4 SEAs make a number of adjustments before determining the final amounts that LEAs actually receive, such as
reservations for school improvement and administration.
5 While the Title I-A program is focused on improving student academic achievement, the factors used to determine
grant amounts do not include a specific academic achievement factor. Rather, one of the primary factors in determining
(continued...)
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ESEA Title I-A Formulas: In Brief
some formulas, additional factors are multiplied by the formula child count and expenditure
factor. These maximum grants are then reduced to equal the level of available appropriations for
each formula, taking into account a variety of state and LEA minimum grant and “hold harmless”
provisions. In general, LEAs must have a minimum number of formula children and/or a
minimum formula child rate to be eligible to receive a grant under a specific Title I-A formula.
Some LEAs may qualify for a grant under only one formula, while other LEAs may be eligible to
receive grants under multiple formulas.
Stages in the Grant Calculation Process
As discussed previously, under Title I-A funds are allocated to LEAs via SEAs under four
different formulas. Under the Basic, Concentration, and Targeted Grant formulas, funds are
initially calculated 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 EFIG formula, allocations
are first calculated for each state overall, with state totals subsequently suballocated to LEAs
using a different formula. That is, under EFIG a state grant amount is affected by the formula
child count within the state relative to the formula child count in other states. Subsequently, LEAs
within each state compete with each other for grants, and these grants are determined, in part,
based on how an LEA’s formula child count compares to that of other LEAs in the same state.
Under the other three Title I-A formulas, grants are initially determined at the LEA level, so each
LEA competes for funding against all other LEAs nationwide.
Formula Child Count and Rate
Although the allocation formulas have several distinctive elements, the primary factors used in all
four are a formula child count and an expenditure factor. The formula child population used to
determine Title I-A grants for the 50 states, the District of Columbia, and Puerto Rico consists of
children ages 5 to 17 (1) in poor families, according to estimates for LEAs from the Census
Bureau’s Small Area Income and Poverty Estimates (SAIPE) program; (2) in institutions for
neglected or delinquent children or in foster homes; and (3) in families receiving Temporary
Assistance for Needy Families (TANF) payments above the poverty income level for a family of
four (hereinafter referred to as TANF children). Children in poor families account for about 97%
of the total formula child count. Each element of the formula child count is updated annually.
The formula child rate is the percentage of children ages 5 to 17 residing in a given LEA who are
formula children. It is calculated by dividing the number of formula children in an LEA by the
number of children ages 5 to 17 who reside in the LEA. The latter child count is determined
based on SAIPE data.
(...continued)
grant amounts at the LEA level is the number of children residing in the LEA that are from families with income below
the federal poverty level. Grants from LEAs to schools, as discussed in a subsequent section, are often based on a
schools’ percentage of students eligible to receive free or reduced-price lunch. Research has demonstrated that there is
a correlation between students’ socioeconomic status and academic achievement with students from lower income
families tending to have lower academic achievement. For more information, see, for example, Selcuk R. Sirin,
“Socioeconomic Status and Academic Achievement: A Meta-Analytic Review of Research,” Review of Educational
Research, vol. 75 (Fall 2005), pp. 417-453.
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ESEA Title I-A Formulas: In Brief
Expenditure Factor
The expenditure factor for all four Title I-A formulas is equal to state average per pupil
expenditure (APPE) for public K-12 education, subject to a minimum and a maximum percentage
of the national average, further multiplied by 0.40. State APPE is subject to a minimum of 80%
and a maximum of 120% of the national APPE for Basic, Concentration, and Targeted Grants.
That is, if a state’s APPE is less than 80% of the national APPE, the state’s APPE is automatically
raised to 80% of the national APPE. If a state’s APPE is more than 120% of the national APPE,
the state’s APPE is automatically reduced to 120% of the national APPE. For EFIG, the minimum
and maximum thresholds for state APPE relative to national APPE are 85% and 115%,
respectively. After adjustments, should they be needed, a state’s APPE is multiplied by 0.40 as
specified in statute.
Weighted LEA Formula Child Counts for the Targeted Grant and
EFIG Formulas
Both the Targeted Grant and EFIG formulas include weighting schemes to increase aid to LEAs
with the highest concentrations of formula children. In general, children counted in the formulas
are assigned weights on the basis of (1) each LEA’s formula child rate (commonly referred to as
percentage weighting) and (2) each LEA’s number of formula children (commonly referred to as
number weighting). Under both percentage weighting and number weighting, a weighted formula
child count is produced and the higher of the two weighted counts is used to determine LEA grant
amounts. As a result, the higher an LEA’s formula child count or formula child rate is, the higher
its grants per child counted in the formula will be.
LEA Hold Harmless and State Minimum Grant Provisions
All four formulas contain hold harmless provisions to prevent large decreases in LEA grant
amounts from year to year, assuming appropriations are sufficient to provide hold harmless
amounts. Assuming appropriations are sufficient, a Title I-A hold harmless amount is the
minimum percentage of an LEA’s prior-year grant that the LEA will receive in the current year.
Under all four formulas, LEAs with a relatively high percentage of formula children receive a
higher hold harmless level. More specifically, the hold harmless rate under each formula is 85%
of the previous-year grant if the LEA’s percentage of formula children is less than 15%, 90% if
the LEA’s percentage of formula children is at or above 15% and less than 30%, and 95% if the
LEA’s percentage of formula children is at or above 30%. In order to benefit from the hold
harmless provisions under each formula, an LEA must meet the eligibility requirements for the
specific formula. The exception to this requirement is that LEAs that met the eligibility
requirements to receive a Concentration Grant but fail to meet the requirements in a subsequent
year will continue to receive a grant based on the hold harmless provisions for four additional
years.
All four formulas have state minimum grant provisions. Minimum grant amounts for each
formula are calculated in part or wholly based on a percentage of the level of appropriations
provided to each formula. This percentage is higher under the Targeted Grant and EFIG formulas
than it is under the Basic and Concentration Grant formulas.6
6 Under Basic and Concentration Grants, a state must receive a minimum of 0.25% of the total allocation amount for
the specific formula, subject to a series of caps. Under Targeted Grants and EFIG, a state must receive a minimum of
(continued...)
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ESEA Title I-A Formulas: In Brief
Factors Included Only in the EFIG Formula
The EFIG formula includes two factors used to determine state level grants that are not included
in any of the other three formulas—the effort factor and the equity factor. The effort factor for
each state is based on APPE for public K-12 education compared to personal income per capita
(PCI) for each state compared to the nation as a whole.7 In general, the effort factor benefits states
that have a relatively high level of spending on education relative to their PCI in their state.
Similar to the expenditure factor, the effort factor is also bounded but with more narrow bounds
of 0.95 and 1.05. These relatively narrow bounds minimize the influence of the effort factor in the
determination of state grants. The effort factor is the same for all LEAs in a given state.
The equity factor for each state is determined based on variations in APPE among the LEAs in
the state. The application of the equity factor results in higher grants to states with less variation
in APPE among their LEAs and lower grants to states with greater variation in APPE among their
LEAs. That is, the equity factor favors states with more equitable APPE among their LEAs.
In addition to determining state grant amounts, the equity factor is also used in the determination
of LEA weighted student counts. Depending on a state’s equity factor, one of three sets of weights
is used in determining an LEA’s weight formula child count.8 While the use of the equity factor in
determining state grants rewards states where APPE among LEAs is more equitable, at the LEA
level, higher weights are used in determining weighted student counts for LEAs in states where
APPE among LEAs is less equitable. Within a state with more variation in APPE among its
LEAs, this results in higher grants for LEAs with a relatively high number of formula children or
a relatively high formula child rate relative to what would be provided if only a single set of
weights was used. Conversely, the lower the variation in APPE among LEAs in a given state, the
lower the weights used to determine weighted formula child counts. Thus, in a state with less
variation in APPE among its LEAs, the use of the weights produces smaller differences in the
weighted formula child counts of LEAs with a relatively high number of formula children or a
relatively high formula child rate as compared with other LEAs in the state; thereby, lessening the
differences in grant per formula child to each LEA in that state relative to grants that are provided
to states in which APPE among LEAs is less equitable.
Allocations at the School Level
Unlike other federal elementary and secondary education programs, most Title I-A funds are
subsequently allocated to individual schools by formula, although LEAs retain substantial
discretion to control the use of a significant share of Title I-A grants at a central district level.9
(...continued)
0.35% of the total allocation amount for the specific formula, subject to a series of caps.
7 More specifically, the effort factor is a ratio of the three-year average APPE for public elementary and secondary
education to the three-year average state PCI divided by the ratio of the three-year average national APPE to the three-
year average national PCI.
8 LEAs in states with an equity factor of less than 0.10 (meaning that there is less variation in APPE among the LEAs
in the state) receive the lowest set of weights. LEAs in states with an equity factor of 0.10 to less than 0.20 receive
weights that are higher than those used for the aforementioned set of LEAs. LEAs in states with an equity factor of 0.20
or higher (meaning that there is greater variation in APPE among LEAs in the state) receive the highest set of weights.
For example, some of the weights accorded to LEAs in the latter group are twice as high as those accorded to LEAs in
the first group.
9 Detailed guidance regarding the selection of schools to receive Title I-A grants and the allocation of funds among
them may be found in the ED policy guidance document Local Educational Agency Identification and Selection of
School Attendance Areas and Schools and Allocation of Title I Funds to Those Areas and Schools, 2003.
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link to page 9 ESEA Title I-A Formulas: In Brief
While there are several rules related to school selection, LEAs must generally rank their public
schools by their percentages of students from low-income families, and serve them in rank order.
All participating schools must generally have a percentage of children from low-income families
that is higher than the LEA’s average, or 35%, whichever of these two figures is lower,10 although
LEAs have the option of setting school eligibility thresholds higher than the minimum in order to
concentrate available funds on a smaller number of schools.11
Table 1. Overview of ESEA Title I-A Allocation Formula Characteristics
Education
Formula
Concentration
Finance Incentive
Characteristic
Basic Grants
Grants
Targeted Grants
Grants (EFIG)
Formula child count
Children aged 5-17
Same as Basic
Same as Basic
Same as Basic
(1) in poor families;
Grants
Grants
Grants
(2) in institutions for
neglected or
delinquent children
or in foster homes;
and (3) in families
receiving Temporary
Assistance for
Needy Families
(TANF) payments
above the poverty
income level for a
family of four
Formula child
10 or more formula
More than 6,500
10 or more formula
10 or more formula
eligibility threshold
children AND a
formula children OR
children AND a
children AND a
for LEAsa
formula child rate of
a formula child rate
formula child rate of
formula child rate of
more than 2%
of more than 15%
5% or more
5% or more
AND must meet the
eligibility
requirements for
Basic Grants
Weighting of
None
None
At all stages of the
For allocation of
formula child count
allocation process,
funds within states
formula children are
only, formula
assigned weights on
children are assigned
the basis of each
weights on the basis
LEA’s number of
of each LEA’s
formula children and
number of formula
formula child rate
children and formula
child rate
10 This minimum percentage is reduced from 35% to 25% for schools participating in certain desegregation plans.
11 There is an exemption from all of the Title I-A school selection requirements for small LEAs—defined in this case as
those with enrollments of 1,000 or fewer students.
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Education
Formula
Concentration
Finance Incentive
Characteristic
Basic Grants
Grants
Targeted Grants
Grants (EFIG)
Expenditure factor
State average
Same as Basic
Same as Basic
Same as Basic
expenditures per
Grants
Grants
Grants, except that
pupil for public K-12
the minimum is 85%
education, subject to
and the maximum is
a minimum of 80%
115% of the national
and maximum of
average per pupil
120% of the national
expenditure
average per pupil
expenditure, further
multiplied by 0.40
Minimum state grant
Up to 0.25% of total
Same as Basic
Up to 0.35% of total
Same as Targeted
state grants, subject
Grants
state grants, subject
Grants
to a series of caps
to a series of caps
LEA hold harmless
85%-95% of the
Same as Basic
Same as Basic
Same as Basic
previous-year grant,
Grants, except that
Grants
Grants
depending on the
LEAs are eligible for
LEA’s formula child
the hold harmless
rate, applicable only
for up to four years
to LEAs meeting the
after they no longer
formula’s eligibility
meet the eligibility
thresholds
threshold
Stages in the grant
Grants are
Same as Basic
Same as Basic
Grants are first
calculation process
calculated at the LEA Grants
Grants
calculated for states
level, subject to state
overall, then state
minimum provisions
total grants are
allocated to LEAs in
a separate process
Additional formula
None
None
None
State effort and
factors
equity factors are
applied in the
calculation of state
total grantsb
Source: Table prepared by CRS.
a. The formula child rate is the percentage of children ages 5-17 residing in a given LEA who are formula
children. It is calculated by dividing the number of formula children in an LEA by the number children ages
5-17 who reside in the LEA.
b. The effort factor is calculated based on average per pupil expenditures for public K-12 education compared
to personal income per capita for each state compared to the nation as a whole. The equity factor is
determined based on variations in average per pupil expenditures among the LEAs in each state.
Summary of Key Changes Proposed to the Title I-A
Formulas in the 114th Congress
The ESEA was last comprehensively amended by the No Child Left Behind Act of 2001 (NCLB;
P.L. 107-110). During the 114th Congress, the House Education and the Workforce Committee
reported the Student Success Act (H.R. 5), which would provide for a comprehensive
reauthorization of the ESEA. The bill was subsequently passed on the House floor on July 7,
2015. The Senate Health, Education, Labor, and Pensions (HELP) Committee reported the Every
Child Achieves Act of 2015 (ECAA; S. 1177), which would also provide for a comprehensive
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ESEA Title I-A Formulas: In Brief
reauthorization of the ESEA. S. 1177 was subsequently passed on the Senate floor on July 16,
2015.12
Both H.R. 5 and S. 1177 would make changes to how funds are distributed under Title I-A. H.R.
5 would change the distribution of funds to LEAs and schools after ED has calculated grant
amounts using the aforementioned formulas. S. 1177 would alter the distribution of funds from
LEAs to schools and would add an additional formula to the four existing Title I-A formulas.
Each of these changes is summarized below.
H.R. 5
Under H.R. 5, a new option for distributing funds from the state level to LEAs and from LEAs to
schools would be available. This option is often referred to as the “state option” or “Title I-A
portability.” Under the state option, Title I-A LEA grants would be calculated by ED using the
four formulas prescribed by current statute. However, once the grants were calculated each state
would have the option of using a new formula to reallocate the total amount of Title I-A funds
that were “earned” by the LEAs in the state under the current law formulas. States would be
permitted to redistribute all of the Title I-A funds received to LEAs based on each LEA’s share of
enrolled eligible children. An eligible child would be defined as a child from a family with an
income below 100% of the poverty level based on the most recent data available from the
Department of Commerce. LEAs would, in turn, distribute the funds received to individual public
schools in the LEA based on each school’s share of enrolled eligible children. That is, any LEA or
any public school that enrolled at least one eligible child would receive Title I-A funds under the
state option. This is significantly different than current law, under which LEAs must meet various
criteria to receive a Title I-A grant and funds are generally provided to schools with relatively
high percentages of students eligible for free or reduced-price lunch.
It should be noted that if a state chose to implement the state option, the amount of funding it
received under Title I-A would not change. Rather, Title I-A funds would shift only among the
LEAs in a given state. As the state option would use different criteria for determining LEA grant
amounts than are used under current law, a given LEA could receive a substantial increase or
decrease in its grant amount in comparison to the amount it would receive under current law.
Similarly, schools could also see changes in their grant amounts relative to what they may receive
under current law.
S. 1177
S. 1177 would add a fifth Title I-A funding formula, the Equity Grant formula. This new formula
would be similar to the existing Education Finance Incentive Grant (EFIG) formula in that grants
would initially be calculated at the state level and then state funds would be suballocated to LEAs
in a given state. However, the proposed formula would use different factors than the EFIG
formula uses to determine state grant amounts and would alter the calculation of grants at the
LEA level as well.13 The Equity Grant formula would only be implemented if overall
12 For a more detailed discussion of ESEA reauthorization proposals in the 114th Congress, see CRS Report R43916,
ESEA Reauthorization Proposals in the 114th Congress: Selected Key Issues, by Rebecca R. Skinner and Jeffrey J.
Kuenzi.
13 For example, the Equity Grant formula would not include the effort factor in the determination of state grant amounts
under the EFIG formula. In addition, in determining state grant amounts the Equity Grant formula uses the same
expenditure factor for all states rather than allowing the expenditure factor to vary by state as is done under the EFIG
formula
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ESEA Title I-A Formulas: In Brief
appropriations for Title I-A exceeded $17 billion and would only be used to allocate funds in
excess of that amount.
S. 1177 would not include a state option. However, S. 1177 would alter the process by which
schools are annually ranked to determine Title I-A grants. While there are several rules related to
Title I-A school selection, under current law LEAs must generally rank their public schools by
their percentages of students from low-income families, and serve them in rank order. This must
be done without regard to grade span under current law for any eligible school attendance area14
in which the concentration of children from low-income families exceeds 75%. Below this point,
an LEA can choose to serve schools in rank order at specific grade levels (e.g., only serve
elementary schools in order of their percentages of children from low-income families). Under S.
1177, LEAs would have to serve elementary and middle schools with more than 75% of their
children from low-income families and high schools with more than 50% of their children from
low-income families before choosing to serve schools in rank order by specific grade levels.
However, no LEA would be required to reduce the amount of funding provided to elementary and
middle schools below the level provided in the fiscal year prior to the enactment of S. 1177 in
order to comply with the proposed requirement related to serving high schools under Title I-A.
Author Contact Information
Rebecca R. Skinner
Specialist in Education Policy
rskinner@crs.loc.gov, 7-6600
Acknowledgments
Leah Rosenstiel and Elizabeth Crowe, Research Assistants at CRS, also contributed to this report.
14 A “school attendance area” means, in relation to a particular school, the geographic area in which the children who
are normally served by that school reside. An “eligible school attendance area” means a school attendance area in
which the percentage of children from low-income families is at least as high as the percentage of low-income families
served by the LEA as a whole.
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