Title I Funding

The Title I program spends $8 billion each year on elementary and secondary education. Although state and local funds account for more than 90 percent of national education expenditures, Title I has been an important source of funding for many poor school districts and schools since 1965. In the 1999-2000 school year, Title I funds were targeted on the basis of numbers and percentages of poor children, but the complex allocation process resulted in differences in actual funding per poor child. When the numbers of children from low-income families shift among states, Title I allocations adjust, but not completely, and a state whose share of the nation's poor children changed from year to year would not necessarily see a corresponding change in its Title I allocation amount. The following two factors account for this: lack of current poverty data and various hold-harmless provisions. GAO found no monetary, statutory, or regulatory incentives for states to target their own funds to children from low-income families. Several policy options could increase Title I funds allocated to states and school districts with high numbers and percentages of poor children. These options include changing the appropriations hold-harmless provisions, funding the targeted grant, using an alternative cost factor, and raising the basic grant eligibility threshold.