Technology Challenge Programs in the Elementary and Secondary Education Act

Technology Challenge Programs in the Elementary and Secondary Education Act

Order Code 98-969 EPW
CRS Report for Congress
Received through the CRS Web
Technology Challenge Programs in the
Elementary and Secondary Education Act
Updated January 3, 2001
Patricia Osorio-O’Dea
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Technology Challenge Programs in the Elementary and
Secondary Education Act
Summary
Throughout the 1980s and 1990s, federal policymakers have been interested in
the use of technology in education. This interest comes partly out of concern over
poor student performance, and the idea that educational technology can improve that
performance. Many policymakers feel U.S. students should receive training in school
that will enable them to work in an increasingly technological environment. The
federal government provides support to technology in education through several
different programs. Among these initiatives are the Technology Literacy Challenge
Fund, and the Technology Innovation Challenge Grant, each of which was first
authorized by the Improving America’s Schools Act of 1994 (P.L. 103-382) as
components of Title III of the Elementary and Secondary Education Act. Both
programs have become part of President Clinton’s educational technology initiative,
and are intended to support the development and expansion of technology in
elementary and secondary schools.
The Technology Literacy Challenge Fund provides formula allocations to states
for the purpose of improving technology access, education, professional development,
and instruction in elementary and secondary schools. Funds are awarded to local
educational agencies on a competitive basis within each state. The Challenge Fund
received its first appropriation of $200 million in FY1997, with a $425 million
appropriation for each of fiscal years 1998 through 2000. The FY2001 appropriation
is $450 million. Program evaluations are being conducted, but have not yet been
completed. The Technology Innovation Challenge Grant program provides 5-year
grants to technology consortia (which must include at least one participating local
school district that serves a significant percentage of low income children)
demonstrating intensive use of technology in elementary and secondary education.
There are currently 99 active Challenge Grant projects, 48 of which have gone to just
nine states, since the program’s first competition in FY1995. Overall 36 states have
received Challenge Grant funding.
Similar to the Challenge Fund, the Technology Innovation Challenge Grant
program has yet to be fully evaluated. While a guide for evaluating Challenge Grant
projects has been released, individual project and overall program evaluation has not
been completed.
Like the rest of the Elementary and Secondary Education Act, the Technology
Literacy Challenge Fund and the Technology Innovation Challenge Grant program are
expected to be considered for reauthorization in the 107th Congress. Issues that may
be considered include: the effectiveness of technology in education and of these
particular programs; the degree to which the programs support, complement, and
expand state and local technology efforts; whether the programs complement,
duplicate, or conflict with other federal efforts to support educational technology; and
whether they are the best way to distribute federal support for educational technology.

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Technology Literacy Challenge Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Technology Innovation Challenge Grant . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Program Impact and Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Legislation in the 106th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
S. 2. “Educational Opportunities Act” . . . . . . . . . . . . . . . . . . . . . . . . 8
H.R. 4141 “Education Opportunities to Protect and Invest in Our
Nation’s Students (Education OPTIONS) Act” . . . . . . . . . . . . . 8
Reauthorization Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
List of Tables
Table 1. Technology Literacy Challenge Fund: Appropriations for
FY1997 — FY2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Technology Literacy Challenge Fund Allocations . . . . . . . . . . . . . . . . . 3
Table 3. Technology Innovation Challenge Grant: Appropriations for
FY1995 — FY2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 4. Technology Innovation Challenge Grant Awards,
FY1995 — FY2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Technology Challenge Programs in the
Elementary and Secondary Education Act
Introduction
Throughout the last 2 decades, information technology has become increasingly
prevalent in society. Policymakers have been interested in the use of this technology
in elementary and secondary schools, partly out of concern over poor student
performance, and the idea that educational technology can improve that performance.
Also, many policymakers feel that U.S. students should receive training in school that
will enable them to work in an increasingly technological environment. Elementary
and secondary schools have made significant efforts to incorporate information
technology in education, partly to improve student performance, and partly to
recognize the need for computer literacy. Nevertheless, some schools around the
country have lagged in their procurement and use of computer technology; others
with access to information technology have outdated systems or make relatively little
use of it.
Many federal programs provide support to elementary and secondary education
initiatives seeking to acquire and utilize information technology to educate their
students. Two such programs, the Technology Innovation Challenge Grant and the
Technology Literacy Challenge Fund, were authorized in the Improving America’s
Schools Act (IASA) of 1994, as components of Title III, Part A of the Elementary
and Secondary Education Act (ESEA) of 1965. Title III authorizes several programs
to foster the acquisition of technology, and the development of technology
applications for use in elementary and secondary education.1 In 1996, the Clinton
Administration called for $2 billion in federal support over 5 years.2
Technology Literacy Challenge Fund
Title III, Part A of the ESEA authorizes the Technology Literacy Challenge
Fund (hereafter, Challenge Fund) under Subpart 2, State and Local Programs for
School Technology Resources. The purpose of Part A is to support an all-
encompassing system for the acquisition and use of technology and technology-
1 For a detailed description of federal technology initiatives in elementary and secondary
education see CRS Report 96-178, Information Technology and Elementary and Secondary
Education: Current Status and Federal Support, by Patricia Osorio-O’Dea.
2 In his 1996 State of the Union Address, President Clinton called for increasing technology
access in schools to improve education in the U.S. by: connecting every classroom and library
to the Internet by 2000; providing the necessary training and support for teachers to utilize
technology; providing access to state-of-the-art technology for all teachers and students; and
ensuring that effective software and on-line resources are made available for use with the
curriculum.

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enhanced curriculum, instruction, and administrative support to improve education
in elementary and secondary schools. The Challenge Fund provides formula
allocations to states when the annual appropriation for Subparts 1-3 of Part A is at
least $75 million for the fiscal year.3 Funds are allocated to states proportionate to
their share of ESEA Title I, Part A funding, with a minimum allocation of one-half of
one percent of the program’s appropriation to any state.4
To qualify for funding, each state must submit a statewide technology plan to the
U.S. Department of Education (ED) that includes its strategy for financing technology
in schools, how private and public entities will participate, and benchmarks and
timetables for reaching its goals. Funds allocated to states are to be awarded on a
competitive basis by the state educational agency (SEA) to local educational agencies
(LEAs) for:
! developing or expanding technology applications to support school
reform; improving student learning, supporting professional
development, and providing administrative support;
! acquiring the necessary resources to support connectivity for
improved student learning through regular and meaningful
technology use; providing professional development support to
incorporate technology into the school curriculum and for purposes
of long-term planning;
! gaining connectivity to wide area networks to access information and
educational resources, particularly through libraries and institutions
of higher education; and providing education to parents and families.
Priority for funding within each state is given to LEAs having the highest percentage
or number of children in poverty and the greatest need for technology.
The Challenge Fund received its first appropriation totaling $200,000,000 in
FY1997 (Table 1). Funding more than doubled in FY1998, reaching a total of
$425,000,000 and remained the same for FY1999 and FY2000. The FY2001
appropriation is $450,000,000. From the annual appropriations, $2,000,000 in
FY1998 and $2,125,000 in FY1999 and FY2000 supported evaluation of the
Challenge Fund program (Table 2).
3 Subpart 1 is for National Programs for Technology in Education; Subpart 2 supports State
and Local Programs for Technology Resources; and, Subpart 3 supports Regional Technical
Support and Professional Development.
4 U.S. Department of Education. Technology Literacy Challenge Fund, Non-regulatory
Guidance. Available online: [http://www.ed.gov/Technology/TLCF/nonreg.html].

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Table 1. Technology Literacy Challenge Fund: Appropriations for
FY1997 — FY2001
Percentage change in
appropriation from
FY
President’s request
Appropriation
previous year
1997
$250,000,000
$200,000,000
100
1998
$425,000,000
$425,000,000
113
1999
$475,000,000
$425,000,000
0
2000
$450,000,000
$425,000,000
0
2001
$450,000,000
$450,000,000
6
Table 2 provides state allocation amounts for FY2000 and FY2001. In FY2001,
California, New York, and Texas received 29% of total program funding, totaling
$1.3 million. States receiving minimum grants received $2,125,000 in FY2000, and
$2,250,000 for FY2001.
Table 2. Technology Literacy Challenge Fund Allocations
Percentage change
State
2000 allocation
2001 allocation
from previous year
Alabama
6,761,395
7,016,251
3.8
Alaska
2,125,000
2,250,000
5.9
Arizona
6,349,707
6,759,013
6.4
Arkansas
4,155,152
4,402,591
6.0
California
49,833,809
55,910,034
12.2
Colorado
3,737,675
3,540,698
-5.3
Connecticut
3,684,123
3,961,450
7.5
Delaware
2,125,000
2,250,000
5.9
Florida
19,174,306
21,615,810
12.7
Georgia
11,035,407
12,462,971
12.9
Hawaii
2,125,000
2,250,000
5.9
Idaho
2,125,000
2,250,000
5.9
Illinois
17,298,200
17,195,244
-0.6
Indiana
6,142,228
6,224,264
1.3
Iowa
2,761,599
2,612,528
-5.4
Kansas
2,932,445
3,041,404
3.7
Kentucky
6,776,628
6,903,567
1.9
Louisiana
10,167,918
10,086,672
-0.8
Maine
2,125,000
2,250,000
5.9

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Percentage change
State
2000 allocation
2001 allocation
from previous year
Maryland
5,388,264
5,727,168
6.3
Massachusetts
7,935,186
7,859,733
-1.0
Michigan
17,401,424
17,714,845
1.8
Minnesota
4,604,715
4,361,266
-5.3
Mississippi
6,627,314
6,378,138
-3.8
Missouri
6,980,860
7,464,334
6.9
Montana
2,125,000
2,250,000
5.9
Nebraska
2,125,000
2,250,000
5.9
Nevada
2,125,000
2,250,000
5.9
New Hampshire
2,125,000
2,250,000
5.9
New Jersey
9,094,025
9,462,864
4.1
New Mexico
3,480,502
3,887,966
11.7
New York
38,534,228
42,421,720
10.1
North Carolina
7,738,808
8,878,706
14.7
North Dakota
2,125,000
2,250,000
5.9
Ohio
15,918,779
15,183,430
-4.6
Oklahoma
5,014,310
5,476,241
9.2
Oregon
3,623,745
3,640,779
0.5
Pennsylvania
17,679,471
17,847,681
1.0
Rhode Island
2,125,000
2,250,000
5.9
South Carolina
5,244,846
5,858,834
11.7
South Dakota
2,125,000
2,250,000
5.9
Tennessee
6,991,296
7,011,388
0.3
Texas
35,170,428
38,333,996
9.0
Utah
2,125,000
2,250,000
5.9
Vermont
2,125,000
2,250,000
5.9
Virginia
6,119,482
6,812,166
11.3
Washington
5,759,388
5,627,085
-2.3
West Virginia
3,899,015
3,939,681
1.0
Wisconsin
6,655,800
6,465,265
-2.9
Wyoming
2,125,000
2,250,000
5.9
District of Columbia
2,125,000
2,250,000
5.9
Puerto Rico
13,952,522
15,164,217
8.7
American Samoa
505,192
544,030
7.7
Northern Marianas
267,794
289,345
8.0

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Percentage change
State
2000 allocation
2001 allocation
from previous year
Guam
491,913
490,401
-0.3
Virgin Islands
860,101
926,224
7.7
BIA
2,125,000
2,250,000
5.9
Evaluation set-aside
2,125,000
2,250,000
5.9
Total
$425,000,000
$450,000,000
5.9
Source: U.S. Department of Education, FY2001 budget tables.
Technology Innovation Challenge Grant
Authorized under Title III, Part A as the National Challenge Grants for
Technology in Education (Section 3136), the Technology Innovation Challenge
Grant program (hereafter, Challenge Grants) provides competitive 5-year awards to
technology consortia for administration of demonstration projects.5 Under this
program, consortias must include at least one district serving a substantial percentage
or number of poor children. Priority for funding is given to projects that directly
benefit students and serve areas with high percentages of disadvantaged students;
projects that provide professional development for teachers and other related
personnel; and projects that contribute substantial resources towards achieving the
project’s goals.
In FY1995, funding for the Challenge Grant program was $9,000,000 (Table 3).
Funding increased over 300% in its second year to $38,000,000. By FY2000,
program funding reached $146,255,000, an increase of 27% from the previous fiscal
year, followed by a 7% decrease in funding between FY2000 and FY2001.
5 Under the authorizing statute, states receive Challenge Grant funding only when
appropriations for Subparts 1-3 of Part A are less than $75 million. However, the
appropriations process has not followed this statutory requirement and has continued
Challenge Grant funding even as the annual appropriation has exceeded $75 million.
Consortias may include LEAs, SEAs, institutions of higher education, businesses, libraries,
academic content experts, software designers, and other entities that can help provide local
programs.

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Table 3. Technology Innovation Challenge Grant: Appropriations for
FY1995 — FY2001
Percentage change
in appropriation
FY
President’s request
Appropriation
from previous year
1995
$50,000,000
$9,000,000
—
1996
$0
$38,000,000
322
1997
$60,000,000
$56,965,000
50
1998
$75,000,000
$106,000,000
86
1999
$106,000,000
$115,000,000
9
2000
$ 110,000,000
$146,255,000
27
2001
—a
$136,328,000
-7
a The Clinton Administration’s ESEA reauthorization proposal would not have included the current
Technology Innovation Challenge Grant program; instead, the Administration’s proposal would have
replaced it with the Next Generation Technology Innovation program, which would have
consolidated the Technology Innovation Challenge Grants and the Star Schools program (ESEA
Title III, Part B).
In some years, the appropriations process has targeted specific projects for
funding under the Challenge Grant program. In FY1999, Congress specified funding
totaling $10,400,000 for several projects. The FY2000 appropriations statutory
language as well as conference report, earmarked $32,060,000 in Challenge Grant
funding to 49 projects. The FY2001 appropriations conference report earmarked
$46,328,000 for 91 projects. Projects earmarked for funding receive single-year
awards.
Fourteen recipients were awarded $21,991,379 for their first-year grants in
FY1999 for the Technology Innovation Challenge Grants. Over $110,000,000 will
be awarded to these recipients over 5 years.6 A competition for new grants did not
take place in FY2000; however, ED used FY2000 appropriations to fund three
applicants from the FY1999 competition. Overall, a total of 99 Challenge Grant
awards have been made.
6 Continued funding over the 5 years is contingent upon fiscal year appropriations and grantee
performance.

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Table 4. Technology Innovation Challenge Grant Awards,
FY1995 — FY2000
FY
Total first-year awards
Total 5-year awards
Total
1995
$14,523,422*
$90,026,070
19
1996
$23,049,139
$104,645,921
24
1997
$18,460,289
$80,442,979
19
1998
$30,764,165
$162,721,198
20
1999
$21,991,379
$112,435,165
14
2000
$6,236,000
not available
3
Source: U.S. Department of Education.
* Funding for the FY1995 projects’ first year came from FY1995 and FY1996 appropriations
(funded through December 1996).
Of the 99 active Challenge Grant projects, 48 awards have gone to California,
Illinois, Massachusetts, Michigan, New York, South Carolina, South Dakota, Texas,
and Washington. California has received 10 Challenge Grants; four of these were
awarded in 1997. Illinois has received seven grants since the program’s inception.
Fourteen states have not received any Challenge Grant awards through the regular
process since the program’s first competition in 1995.
Program Impact and Evaluation
Substantive evaluations of the Challenge Grants and the Challenge Fund have yet
to be completed by ED. However, ED is undertaking several efforts to measure the
progress and results of both programs, and of the effects of the application of
technology in elementary and secondary education. First, for the Technology Literacy
Challenge Fund program, ED released evaluation guidance in 1998, intended to
provide districts with information on how to design their program evaluations. In
addition, ED’s first report to Congress outlining first-year progress of states and their
subgrantees (June 1999) discussed states’ evaluation efforts. Overall, ED found that,
in addition to states being at different stages of implementing technology in schools,
they are also at different stages of evaluating their technology efforts. A five-state
case study of progress and implementation of the Technology Literacy Challenge
Fund program has also been completed and other evaluation projects are expected to
be completed in 2001.
In FY1997, ED began conducting an evaluation of the Challenge Grant program,
including the development of evaluation designs for each individual grant recipient.
ED is also conducting a formative evaluation examining how and to what extent the
Challenge Grants are supporting the development, implementation, and expansion of
innovative uses of technology to improve teaching and learning. A case study report
of the program was expected to be completed in late 2000 but has not yet been
released; a report on lessons learned is expected in fall 2001.

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Legislation in the 106th Congress
Numerous proposals to reauthorize the ESEA Technology Challenge programs,
as well as the rest of the ESEA, were introduced during the 106th Congress. The
major proposals for reauthorizing the Technology Challenge programs introduced and
acted upon are described below. None of these proposals was enacted.
S. 2. “Educational Opportunities Act”. S. 2 would amend ESEA Title III to
increase emphasis on professional development and parental involvement, and set as
a goal ensuring that every child is computer literate by the end of the 8th grade. The
bill would retain the Technology Literacy Challenge Fund and Technology Innovation
Challenge Grants, renaming them the Technology Literacy Fund and Technology
Innovation Grants, and would require ED to submit an evaluation to Congress on
outcomes of these programs within 3 years. The bill would authorize $815 million for
all education technology initiatives for 2001, including $5 million for technology
leadership activities, $10 million for regional technical support and professional
development, with the remainder going to the Technology Literacy Fund (70%) and
Technology Innovation Grants (30%). The bill was reported out of the Health,
Education, Labor and Pensions Committee on April 12, 2000 (S.Rept. 106-261); the
full Senate debated S. 2 between May 1 and May 9, 2000, but no further action
occurred.
H.R. 4141 “Education Opportunities to Protect and Invest in Our Nation’s
Students (Education OPTIONS) Act”. H.R. 4141 would consolidate several
ESEA Title III programs into a State and Local Technology for Success Grants
program, including the Challenge Fund and Challenge Grants, with 50% of funds
allocated based on Title I, Part A grants and 50% based on population aged 5-17.
Within each state, at least 95% of funds would be distributed to LEAs (at least 80%
through a state-developed formula targeting high need districts, the remainder through
competitive grants). LEAs receiving formula grants must use at least 20% for
professional development of teachers in the integration of technology into the
curriculum. Other allowable local activities include using technology to increase
academic achievement, expanding access, and developing performance measurements.
LEAs using funds to purchase computers to access the Internet would be required to
have filters to block material deemed harmful to minors. The House Committee on
Education and the Workforce reported H.R. 4141 on May 4, 2000 (H.Rept. 106-608)
and no further action occurred.
Reauthorization Issues
Like the rest of the ESEA, the Technology Literacy Challenge Fund and the
Technology Innovation Challenge Grant programs are expected to be considered for
reauthorization in the 107th Congress. Below are several issues that may be
considered during reauthorization discussions.
How effective is technology in education? The effectiveness of information
technology in education remains unclear. Some research has found technology to
yield positive results. However, critics are concerned that some elementary and
secondary schools, particularly those serving disadvantaged students, may not have

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equitable access or use technology; that students will become isolated and less social
as a result of technology in schools; and that technology may take away resources
from other critical school needs.7
How effective have these two programs been? Determining whether and how
to amend and extend these programs is complicated by the absence of evaluation
results. Evaluations of the Challenge Fund and Challenge Grant programs are
underway but have not been completed. There is no guarantee that these evaluations
will be available prior to reauthorization discussions.
How well do these programs support, complement, and expand state and
local technology efforts? These programs emphasize technology planning at the
state and local level, so that funded projects are not conducted in isolation from
broader goals, and are not solely dependent upon federal resources.8 In its first year
of competition, the Challenge Grant projects leveraged over 70 million additional
dollars for Challenge Grant activities from private businesses, colleges and
universities, museums, libraries, and other state and regional federal agencies. The
Challenge Fund has not yet reported overall program results.
To what extent do these programs complement, duplicate, or conflict with
other federal efforts to support educational technology? Currently, ED and other
federal agencies administer over 20 federal programs that support educational
technology.9 Many of these programs have overlapping objectives. There exists a
large degree of fragmentation among educational technology initiatives, with no
coordination of federal support. Congress may consider reviewing the overall federal
educational technology support in determining a course of action for the Challenge
Fund program and the Challenge Grant program. This may be particularly relevant
given the substantial being generated through the universal service E-rate program.10
7 For a detailed discussion on the major issues affecting technology acquisition and use in
elementary and secondary education see CRS Report 96-178, Information Technology and
Elementary and Secondary Education: Current Status and Federal Support, by Patricia
Osorio-O’Dea.
8 For additional information on resources used by state and local agencies for technology
development in elementary and secondary education, see Southwest Educational Development
Laboratory and Texas Education Network. The State Report: Progress, Policies and
Partnerships Bring Internet Connectivity to K-12 Schools. Austin, Texas, 1997. Also, see
U.S. Government Accounting Office. School Technology: Five School Districts’
Experiences in Funding Technology Programs. GAO Report to Congressional Requesters,
GAO/HEHS-98-35. January 1998.
9 For details on other federal programs that provide support for educational technology
development, applications and training, see CRS Report 96-178, Information Technology and
Elementary and Secondary Education: Current Status and Federal Support, by Patricia
Osorio-O’Dea.
10 For additional information regarding the E-rate program, see CRS Report 98-604, E-Rate
for Schools: Background on Telecommunications Discounts Through the Universal Service
Fund, by James Stedman and Patricia Osorio-O’Dea.

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How should federal support for educational technology be distributed?
Congress may consider whether these and other technology programs are most
effectively administered as discretionary national grants or formula grants to states.
Some members of the Congress have expressed concern regarding the breadth of the
distribution of the Challenge Grant funds and whether some states are disadvantaged
in this competitive grant program.11
11 The Senate report (S.Rept. 105-300) on Department of Education appropriations for
FY1999 states that since 1995 grants have been disproportionately awarded to states with
high levels of private funding, access to technology, and large concentrations of disadvantaged
students. Meanwhile, projects from predominantly rural states are turned down, attributing
a lack of community resource contributions and low numbers of children benefitting from the
projects as reasons for rejection. S.Rept. 105-300. Departments of Labor, Health and
Human Services, and Education and Related Agencies Appropriation Bill, 1999.