Contents

• Introduction
• Title I-A Formulas
• Formula Child Count and Formula Child Rate
• Weighted LEA Formula Child Counts for Targeted Grant and EFIG Formulas
• Expenditure Factor
• LEA Hold Harmless and State Minimum Grant Provisions
• Factors Included Only in the EFIG Formula
• State Adjustments to LEA Grant Amounts
• Summary of Formula Characteristics
• Allocations at the School Level
• Equitable Services for Private School Students

Summary

Title I-A of the Elementary and Secondary Education Act (ESEA) authorizes aid to local educational agencies (LEAs) for the education of disadvantaged children. Title I-A grants provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of children from low-income families. The Title I-A program is the largest grant program authorized under the ESEA and is funded at $18.4 billion for FY2026.

The U.S. Department of Education (ED) determines Title I-A grants to LEAs based on four separate funding formulas: Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants. 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.

Each LEA's grant amount is based on multiple factors, including adjustments for minimum grant provisions, hold harmless provisions, and the amount of funding available to be allocated under the formulas. For each formula, a maximum grant is calculated by multiplying a formula child count—consisting primarily of estimated numbers of school-age children living in families in poverty—by an expenditure factor based on state average per pupil expenditures for public elementary and secondary education. In some formulas, additional factors are multiplied by the formula child count and expenditure factor. These maximum grant amounts are then ratably reduced to equal the level of available appropriations for each formula, taking into account a variety of state minimum grant and LEA 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. Once funds reach LEAs, the amounts allocated under the four formulas are combined and used jointly.

This report provides a general overview of the key components of each of the four formulas used to allocate Title I-A funds.

Introduction

Title I-A of the Elementary and Secondary Education Act (ESEA) authorizes aid to local educational agencies (LEAs) for the education of disadvantaged children. Title I-A grants provide supplementary educational and related services to low-achieving and other students attending elementary and secondary schools with relatively high concentrations of children from low-income families. In recent years, Title I-A also has been used as a vehicle to which numerous requirements affecting broad aspects of public elementary and secondary education for all students have been attached as conditions for receiving Title I-A grants. The Title I-A program is the largest grant program authorized under the ESEA and is funded at $18.4 billion for FY2026. The ESEA was most recently comprehensively reauthorized by the Every Student Succeeds Act (ESSA; P.L. 114-95) in 2015.

The U.S. Department of Education (ED) determines Title I-A grants to LEAs based on four separate funding formulas. After calculating grants, ED provides each state educational agency (SEA) with the calculated grant amounts for LEAs in the state. 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.¹ 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 public 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. Table 1 provides a summary of these components (or factors).

Title I-A Formulas

Under Title I-A, funds are allocated to LEAs via states using four different allocation formulas specified in statute: (1) Basic Grant formula, (2) Concentration Grant formula, (3) Targeted Grant formula, and (4) Education Finance Incentive Grant (EFIG) formula. For the purposes of the Title I-A program, state is defined as the 50 states, the District of Columbia, and Puerto Rico. The annual Labor, Health and Human Services, and Education, and Related Agencies appropriations bill specifies that portions of each year's appropriation be allocated under each of these different formulas.³ Under three of the formulas—Basic Grant, Concentration Grant, and Targeted Grant—grants are initially calculated at the LEA level. State grants are the total of allocations for all LEAs in the state, adjusted for state minimum grant provisions. Under EFIG, grants are first calculated for each state overall, and funds are subsequently suballocated to LEAs within a state using a different formula. Once funds reach LEAs, the amounts allocated under the four formulas are combined and used jointly.⁴

Each LEA's grant amount is based on multiple factors, including adjustments for minimum grant provisions, hold harmless provisions, and the amount of funding available to be allocated under the formulas. For each formula, a maximum grant is calculated by multiplying a formula child count—consisting primarily of estimated numbers of school-age children living in families in poverty—by an expenditure factor, which is based on state average per pupil expenditures (APPE) for public elementary and secondary education. In some formulas, additional factors are multiplied by the formula child count and expenditure factor. These maximum grants are then ratably reduced so that in the aggregate they equal the level of available appropriations for each formula, taking into account state minimum grant and LEA hold harmless provisions. In general, LEAs must have a minimum number of formula children and/or a minimum percentage of children that are formula children 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. Table 1 summarizes various characteristics of the four Title I-A formulas.

Formula Child Count and Formula Child Rate

The population used to determine Title I-A grants for the states includes children who are ages 5-17 and meet at least one of the following criteria: (1) living in families in poverty, according to estimates from the U.S. Census Bureau's Small Area Income and Poverty Estimates (SAIPE) program;⁵ (2) living in institutions for neglected or delinquent children or in foster homes; or (3) living in families with income above the federal poverty level but who receive local assistance through Temporary Assistance for Needy Families (TANF).⁶ Each of these counts is updated annually. To obtain the percentage of children in an LEA who are formula children (also referred to as the formula child rate), the formula child count is divided by the total number of children ages 5-17 living in the LEA's geographic boundaries. For example, in an LEA with 200 formula children and 1,000 children ages 5-17, the formula child rate would be 20%. The data on the total number of children also are based on SAIPE estimates. In FY2025, children living in families in poverty, aligning with the first criterion listed above, accounted for 97.11% of the total formula child count.⁷

To be eligible to receive a grant under each of the formulas, an LEA must meet certain eligibility requirements. The eligibility requirements vary from formula to formula. As detailed in Table 1, the thresholds that an LEA must meet with respect to its formula child count and formula child rate are lower for the Basic Grant formula than for the other formulas, while the Concentration Grant formula has the highest thresholds that an LEA must meet in terms of number of formula children or formula child rate. The Targeted Grant and EFIG formulas each have the same eligibility criteria, which are similar to the Basic Grant formula eligibility requirements but with a higher formula child rate threshold.

Weighted LEA Formula Child Counts for Targeted Grant and EFIG Formulas

Both the Targeted Grant and EFIG formulas utilize a weighted formula child count to increase aid to LEAs with the highest numbers or percentages 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). The weights are applied under percentage weighting and under number weighting in a stepwise manner to all LEAs for which ED calculates Title I-A grants to produce two weighted formula child counts. The higher of the two weighted counts is used to determine LEA grant amounts. In general, the higher an LEA's formula child count or formula child rate is, the higher its grant amount per child counted in the formula will be.

Expenditure Factor

For LEAs in a given state, the expenditure factor for all four Title I-A formulas is equal to state APPE for public elementary and secondary education,⁸ subject to a minimum and a maximum percentage of the national average, further multiplied by 0.40.⁹ More specifically, state APPE are multiplied by 40% and then subject to a minimum of 80% and a maximum of 120% of 40% of the national APPE (referred to as the lower bound and upper bound, respectively) for the Basic, Concentration, and Targeted Grant formulas. If a state's APPE multiplied by 40% falls below the lower bound, the state's expenditure factor is raised to the lower bound amount. If a state's APPE multiplied by 40% is above the upper bound, the state's expenditure factor is reduced to the upper bound amount. For EFIG, the minimum and maximum bounds for state APPE relative to 40% of the national APPE are 85% and 115%, respectively. ¹⁰

The following example demonstrates the expenditure calculation for the Basic Grant, Concentration Grant, and Targeted Grant formulas.

• Step One: Assume the national APPE is $10,000. Multiplying this amount by 40% equals $4,000. The lower and upper bounds are established by multiplying $4,000 by 80% to produce a lower bound of $3,200 and multiplying $4,000 by 120% to produce an upper bound of $4,800.
• Step Two: Assume a state's APPE is $14,000. Multiplying the amount by 40% equals $5,600. This amount is compared with the lower and upper bounds established in Step One. As $5,600 is higher than $4,800, the state's expenditure factor used in each of the formulas is reduced to the upper bound amount calculated in Step One.

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 grant amount an LEA will receive in a given year based on a specified percentage of the LEA's prior-year grant amount. 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%. To benefit from the hold harmless provisions under the Basic Grant, Targeted Grant, and EFIG formulas, an LEA must meet the eligibility requirements for the specific formula in the current year. LEAs that met the eligibility requirements to receive a Concentration Grant in a past year 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 after the year in which the LEA last met eligibility requirements.¹¹

All four formulas have state minimum grant provisions. State minimum grant amounts for each formula are calculated in part or in whole based on a specified 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.

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 elementary and secondary education compared with personal per capita income (PCI) for each state compared with the ratio of those figures for the nation as a whole.¹² In general, the effort factor benefits states that have a relatively high level of spending on education relative to the 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 diminish 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 current expenditures per pupil (CEPP)¹³ among the LEAs in the state. A measure of disparity referred to as the coefficient of variation (CV) measures the average amount of difference within a state among each LEA's CEPP and the state average CEPP.¹⁴ The CV is subtracted from 1.3 to produce a state's equity factor. The application of the equity factor results in higher grants to states with less variation in CEPP (i.e., lower CV) among their LEAs and lower grants to states with greater variation in CEPP (i.e., higher CV) among their LEAs. That is, the equity factor favors states that have less disparity in spending among their LEAs.

In addition to determining state grant amounts under EFIG, the CV is also used in the determination of LEA weighted student counts for the purposes of suballocating grants to LEAs. Depending on a state's CV, one of three sets of weights is used in determining an LEA's weighted formula child count.¹⁵ While the use of the CV in determining state grants rewards states where variation of CEPP among LEAs varies the least, at the LEA level, higher weights are generally used in determining weighted student counts for LEAs in states where CEPP among LEAs varies more (i.e., a state has a higher CV). Within a state with more variation in CEPP among its LEAs, the use of higher sets of weights 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 a single set of weights were used. Conversely, the lower the variation in CEPP 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 CEPP 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.

State Adjustments to LEA Grant Amounts

After ED calculates LEA grants, state educational agencies (SEAs) make a number of adjustments before determining the final amounts that LEAs receive. These adjustments include the following:

• provision of funds to eligible charter schools that are their own LEAs or to account for recent LEA boundary changes; and
• optional use by states of alternative methods to reallocate all of the grants as calculated by ED for the state's small LEAs (defined as those serving an area with a total population of 20,000 or fewer) among the state's small LEAs.¹⁶

When making these adjustments, an SEA must continue to apply the aforementioned LEA hold harmless provisions under each Title I-A formula.¹⁷

After making the adjustments above and before allocating funds to LEAs, states must reserve the greater of (1) 7% of state total Title I-A allocations or (2) the amount the state reserved for school improvement under Title I-A in FY2016 plus its School Improvement Grant for FY2016 to be used for school improvement activities. When reserving funds for school improvement for FY2018 and subsequent fiscal years, an SEA is prohibited from providing any LEA with less funding than it received in the prior fiscal year as a result of such reservation. As a result of the application of this rule, an SEA may not be able to reserve the "full amount" for school improvement.¹⁸

States may reserve for state administration the greater of (1) 1% of state total allocations under Title I-A, Title I-C, and Title I-D; or (2) $400,000.¹⁹ States may also reserve an additional 3% of the state total allocation for direct student services. The prohibition against an SEA providing any LEA with less funding than it received in the prior fiscal year as a result of reservations for school improvement does not apply to reservations for administration and direct student services. If an SEA chooses to reserve funds for either or both of these purposes, the SEA has two options for adjusting LEA grant amounts, under which the SEA may either (1) preserve and adjust for or (2) disregard LEAs' hold harmless amounts.²⁰

Summary of Formula Characteristics

Table 1 provides a summary of the Title I-A formula characteristics discussed in this section.

Allocations at the School Level

Unlike other federal elementary and secondary education programs, most Title I-A funds are subsequently allocated to individual public schools by formula, although LEAs retain substantial discretion to control the use of a portion of Title I-A grants at a central district level.²¹ 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.²² This must be done without regard to grade span for any eligible school attendance area in which the concentration of children from low-income families exceeds 75%.²³ Below this point, an LEA can choose to serve schools in rank order at specific grade levels (e.g., serve elementary schools in order of their percentages of children from low-income families). LEAs have the option 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.²⁴

All Title I-A participating schools generally must 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, 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.²⁵ LEAs establish a per-pupil payment for each child from a low-income family in a Title I-A school. LEAs may establish higher per-pupil payments at schools with higher percentages of children from low-income families, provided higher per-pupil payments are not made at a school with a lower percentage of children from low-income families.

Schools that receive Title I-A funds operate one of two types of Title I-A programs. Schoolwide programs²⁶ are authorized if the percentage of low-income students served by a school is 40% or higher.²⁷ In schoolwide programs, Title I-A funds may be used to improve the performance of all students in a school. For example, funds might be used to provide professional development services to all of a school's teachers, upgrade instructional technology, or implement new curricula. During the 2022-2023 school year, 86% of Title I-A schools operated a schoolwide program.²⁸ The second type of Title I-A school service model is the targeted assistance program (TAP).²⁹ Under TAPs, Title I-A-funded services are generally limited to the lowest-achieving students in the school. For example, students may receive additional instruction in an after-school program, or funds may be used to hire a teacher's aide who provides additional assistance to low-achieving students in their regular classroom. In general, schools have substantial latitude in how they use Title I-A funds, provided the funds are used to improve student academic achievement.³⁰

While the formulas used to determine Title I-A grants rely on the number and percentage of formula children in an LEA, there is no direct relationship between this number and the number of children served with Title I-A funds. Most students served under Title I-A attend schools operating schoolwide programs. All of the students in these schools are considered as being served under Title I-A, regardless of family income. The formula child count used for Title I-A grant determinations includes only children living in families in poverty. For example, during the 2021-2022 school year, 26.6 million students were served, and fewer than 9 million formula children were included in Title I-A grant determinations.³¹

Equitable Services for Private School Students³²

Under Title I-A, Section 1117, after "timely and meaningful consultation" with private school officials, LEAs are required to provide eligible private school children with services and other benefits under Title I-A that address their needs on an equitable basis compared with services and other benefits provided to public school students served under Title I-A.³³ Private school students eligible to receive services must be identified as failing, or most at risk of failing, to meet the challenging state academic standards on the basis of multiple, educationally related, objective criteria by the LEA.³⁴ In addition, an eligible private school student must reside in, as opposed to attend a private school located in, a participating public school attendance area to be eligible for services provided under Title I-A. That is, the LEA in which the student resides is responsible for providing services to the child even if the student attends a private school in another LEA.³⁵ LEAs also must ensure that teachers and families of the children participate on an equitable basis in services and activities developed with respect to parent and family engagement under the ESEA.³⁶

The services, benefits, materials, and equipment provided must be secular, neutral, and nonideological.³⁷ Equitable services must be provided in a timely manner and may be provided through a third-party contractor. The control of public funds and materials purchased with those funds must remain with a public agency.³⁸

The amount of funds that an LEA must reserve to serve private school students from low-income families residing in participating Title I-A school attendance areas is based on the proportional share of such students compared with the total number of low-income students residing in participating school attendance areas. For example, if 10% of the low-income children residing in an LEA's participating Title I-A school attendance areas attend private schools, then the LEA must reserve 10% of its total Title I-A allocation to provide equitable services.³⁹ After subtracting from this reserved amount any funds needed for purposes such as administration and parent and family engagement, if applicable, the LEA divides the remaining amount of funds by the total number of private school students from low-income families residing in participating Title I-A school attendance areas to determine a per-pupil funding amount.⁴⁰ This amount is then multiplied by the number of low-income private school students residing in participating Title I-A school attendance areas that attend a given private school to determine the amount of funds available to serve students in that school who are eligible to receive services.⁴¹

Appendix. ESEA Title I-A Appropriations

Figure A-1 and Table A-1 detail the appropriations levels for Title I-A since FY2001. Overall, in current dollars, after the No Child Left Behind Act of 2001 (NCLB; P.L. 107-110) reauthorized the ESEA, there was a steady increase in Title I-A appropriations through FY2005 and a second period of increasing appropriations from FY2007 to FY2009. There has also been an increase in current dollar appropriations from FY2013 through FY2024. When appropriations are examined in constant dollars (adjusted for inflation), after peaking in FY2009, Title I-A appropriations have often decreased from fiscal year to fiscal year.

Table A-2 provides the current dollar appropriations level and share by Title I-A formula since FY2001. As previously discussed, all post-FY2001 increases in Title I-A appropriations have been divided between Targeted Grants and EFIG.⁴² At the same time, the appropriations levels for Basic Grants and Concentration Grants generally decreased from FY2002 through FY2014 and have remained at the same appropriations level since FY2014. Thus, the share of appropriations allocated via the Targeted Grant and EFIG formulas has been steadily increasing while the share of appropriations allocated via the Basic Grant formula has been steadily decreasing.

Figure A-1. ESEA Title I-A Appropriations Levels in Current and Constant 2025 Dollars, FY2001-FY2025 dollars in thousands

Source: Figure prepared by CRS based on data available from U.S. Department of Education, Budget Service. Notes: Constant dollars based on the Consumer Price Index for All Urban Consumers (CPI-U) prepared by U.S. Department of Labor, Bureau of Labor Statistics, and adjusted to a school-year basis (July 2024-June 2025) by CRS. The appropriations level for FY2009 does not reflect the additional $10 billion for Title I-A appropriated through the American Recovery and Reinvestment Act (ARRA; P.L. 111-5).

Footnotes