	Introduction

The Elementary and Secondary Education Act (ESEA) is the primary source of federal aid to K-12 education. The ESEA was last reauthorized by the Every Student Succeeds Act (ESSA; P.L. 114-95 ) in 2015. The Title I-A program has always been the largest grant program authorized under the ESEA and was funded at $15.5 billion for FY2017. 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 poverty. 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). This report begins with an overview of key issues that have factored prominently in the evolution of the Title I-A formulas. The report then traces, in detail, the evolution of the Title I-A formulas in statute and identifies the reasons offered for changes to them, as expressed in committee reports, floor debates, and, to a limited extent, congressional hearings. The report concludes with three appendices. Appendix A provides historical appropriations data for the Title I-A formulas dating back to FY1980. Appendix B provides a summary of major changes that have been made to the factors that comprise each of the four Title I-A formulas that are currently authorized from their initial enactment through the ESSA. Appendix C provides a list of selected acronyms used in this report. By shifting the distribution of funds under the formulas, especially under the Concentration Grant, Targeted Grant, and EFIG formulas, the inclusion of state minimum grant and LEA hold harmless provisions may reduce the targeting of funds on LEAs with higher concentrations of poverty by reducing grant amounts to LEAs that would have otherwise received more funding. The Concentration Grant formula was added in the 1970s in an attempt to provide additional funding for LEAs with concentrations of poverty. As both of these formulas were enacted into law, and the Basic Grant and Concentration Grant formulas were retained, funds are allocated through four formulas under current law. The Title I-A program was also amended to include two new formulas—Targeted Grants (developed by the House) and Education Finance Incentive Grants (EFIG; developed by the Senate)—in an attempt to target Title I-A funds more effectively on concentrations of poverty. A compromise on a single new formula was not reached; nor was there agreement on eliminating the existing formulas. Appendix C. Selected Acronyms Used in This Report
AFDC : Aid to Families with Dependent Children
APPE : Average per pupil expenditures
ARRA : American Recovery and Reinvestment Act
BIA : Bureau of Indian Affairs
BIE : Bureau of Indian Education
CV : Coefficient of variation
ECIA : Education Consolidation and Improvement Act
ED : U.S. Department of Education
EFIG : Education Finance Incentive Grants
ELLs : English language learners
ESEA : Elementary and Secondary Education Act
ESSA : Every Student Succeeds Act
GEPA : General Education Provisions Act
HEW : Department of Health, Education, and Welfare
IASA : Improving America's Schools Act
IDEA : Individuals with Disabilities Education Act
LEA : Local educational agency
MOE : Maintenance of effort
NAEP : National Assessment of Educational Progress
NCLB : No Child Left Behind Act
NDEA : National Defense Education Act
NIE : National Institute of Education
PCI : Per capita income
SAIPE : Small Area Income and Poverty Estimates
SEA : State educational agency
SIE : Survey of Income and Education
SNS : Supplement, not supplant
TANF : Temporary Assistance to Needy Families
The Elementary and Secondary Education Act (ESEA) is the primary source of federal aid to K-12 education. The ESEA was last reauthorized by the Every Student Succeeds Act (ESSA; P.L. 114-95) in 2015. The Title I-A program has always been the largest grant program authorized under the ESEA. 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 students from low-income families.
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). The current four formula strategy has evolved over time, beginning with the Basic Grant formula when the ESEA was originally enacted in 1965. The Concentration Grant formula was added in the 1970s in an attempt to provide additional funding for LEAs with high concentrations of poverty. During consideration of ESEA reauthorization in the early 1990s, there was an attempt by the Senate to replace the two existing formulas with a new formula (Education Finance Incentive Grant (EFIG) formula) that would better target Title I-A funds to concentrations of poverty. A compromise on a single new formula was not reached; nor was there agreement on eliminating the existing formulas or only adding one of the new formulas created by the House (Targeted Grant formula) and the Senate (EFIG formula). As a result, funds are allocated through four formulas under current law.
This report begins with an overview of key policy issues and underlying tensions that have factored into the evolution of the Title I-A formulas. These include issues related to the selection of poverty measures and identification of formula children, determination of the role state expenditures on public K-12 education would play in allocations, the use of state minimum grant and LEA hold harmless provisions, determination of the relative emphasis to place on percentages versus counts of formula children when targeting Title I-A funds on areas with high concentrations of poverty, and the tradeoff between transparency and complexity with respect to the formulas.
The report then traces the evolution of the Title I-A formulas and identifies the reasons offered for changes to them, as expressed in committee reports, floor debates, and to a limited extent, congressional hearings. The report concludes with three appendices. Appendix A provides historical appropriations data for the Title I-A formulas dating back to FY1980. Appendix B provides a summary of major changes that have been made to the factors that comprise each of the four Title I-A formulas that are currently authorized from their initial enactment through the ESSA. Appendix C provides a list of selected acronyms used in this report.