Majority of Federal Education Dollars Are Spent on Instruction and Instructional Support by Local School Districts

Washington, D.C. – Despite No Child Left Behind's (NCLB) increased focus on targeting federal resources to help students with the greatest needs, all federal education programs combined have not closed the funding gap between the highest- and lowest-poverty school districts around the country, according to a new analysis conducted by the American Institutes for Research (AIR) for the U.S. Department of Education.

The new report examines the use of $18.4 billion in funds from six federal education programs to determine:

1. how well federal funds are targeted to high-need districts and schools,
2. how districts are spending federal funds, and
3. the comparability of the base of state and local resources to which federal funds are added.

Overall, federal education funds from Title I, Part A; Reading First; Comprehensive School Reform; Title II, Part A; Title III, Part A; and Perkins Vocational Education State Grants were more strongly targeted to high-poverty districts than state or local funds, but they did not close the schools’ funding gap.

“Perhaps the most interesting thing we found is that, even with three times as much funding from federal programs going to the country’s highest-poverty school districts, it’s not enough to make up for the gap in local funds,” said the report’s lead author, Dr. Jay Chambers. “The highest-poverty districts still received 7 percent less in total funding.”

The report’s other findings include:

• A variety of changes to Title I have been made in an effort to increase targeting of funds to the highest-poverty districts and schools. However, in the highest-poverty schools, Title I funding per low-income student has not increased since 1997–98, despite substantial increases in appropriations, and the highest-poverty Title I schools continued to receive less Title I funding per low-income student in 2004–05 than both medium- and low-poverty Title I schools.
• Most of the $18.4 billion from the six programs studied went to instruction (e.g., teachers, aides, and instructional materials) or for instructional support (e.g., professional development), with relatively small amounts allocated for administrative activities. Across the six federal programs, about 10 percent of the funds ($1.8 billion) were used for professional development, with Title I providing more than half of these funds ($1.0 billion), followed by Title II ($518 million).
• Schools across the nation appeared to have a similar base level of state and local expenditures on personnel. However, teachers in the highest-poverty schools tended to have less experience, were less likely to have advanced degrees and had lower salaries than teachers in the lowest-poverty schools.
• Title I added $408 (or a 9 percent increase) per low-income student to staffing expenditures in 2004-05. In an average-size Title I school, this translates to the addition of two teachers and one teacher aide.
• A marked increase in the number of Title I teachers (a 50 percent increase from 1997–98 to 2004–05), accompanied by a decrease in the number of Title I teacher aides, suggests some improvement in the qualifications of the Title I instructional workforce over this period.
• The highest- and lowest-poverty schools were similar in their student-to-teacher ratios, percentage of secondary English and math teachers with a degree in the field they taught, and total spending on school personnel.

The report is based upon the results of two national studies – the National Longitudinal Study of NCLB (NLS-NCLB) and the Study of State Implementation of Accountability and Teacher Quality Under NCLB (SSI-NCLB).

The full report is available at the U.S. Department of Education Web site.