How States Allocate Funding for Students From Low-Income Backgrounds


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This is the first of a three-part series that explores ways that states fund education for specific student populations and school characteristics. More information on the state policies referenced in this series can be found here.

Our recent 50-State Comparison on K-12 Funding looks at states’ general funding mechanisms and the additional funding systems they employ for specific student and/or school characteristics. When allocating funding, states account for the varying factors that influence the cost of funding education for all students.

One of these factors concerns the resources needed to educate students from low-income households. Additionally, research shows a connection between providing additional funding for such students and their academic performance.

How do states determine which students need these additional resources?

Since schools collect data on students’ family income for participation in the National School Lunch Program, students’ eligibility for free or reduced-price lunch is often a proxy for low-income status — a marker many states and schools use to identify students who could be at risk of dropping out of school and/or of lower academic achievement. Thirty-one states use student eligibility for the National School Lunch Program as a proxy for low-income status, which is one of the main student characteristics states factor in when allocating additional funds — specifically through their at-risk funding mechanisms.

Some states also identify other student populations in need of additional resources allocated through at-risk funding mechanisms, including those in foster care, English language learners, students who are homeless, and students who are eligible for or recipients of such public programs as Medicaid, Children’s Health Insurance Program, Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program.

Some of these student populations may receive additional funding supports through other mechanisms or from other sources from different levels of government. For example, we explore specific state funding mechanisms for English language learners in next blog post as part of this series.

How do states allocate additional funding for these students?

While eight states currently do not have additional funding for these students through a specific at-risk funding mechanism prescribed in statute, most states have a multiple weight system, a flat weight system, a resource allocation model or a categorical funding system to provide additional funds for students from low-income households.

Multiple weight system: More than one weight or dollar amount is assigned based on certain factors. For example, Connecticut provides supplemental funding for districts with a higher concentration of students from low-income households in addition to the supplemental funding it provides for all students from low-income households.

Flat weight system: Districts receive funding for each student who meets the identification criteria. For example, Oklahoma provides the same weighting for all students from low-income backgrounds.

Resource allocation model: States distribute resources, rather than assigning weights or dollar values, based on certain criteria. For example, Illinois uses a resource-based formula to provide tiered support to help districts meet their adequacy funding target. The target includes the cost of meeting specified student-to-staff ratios for students from low-income backgrounds (different than the ratio for students not from low-income backgrounds). The smaller ratios for students from low-income households means a school with more students from low-income backgrounds would need more staff and thus more funding.

Categorical funding: States distribute money to districts or schools based on certain conditions. For example, Wisconsin provides school districts with additional funds if 50% of the district’s students are eligible for free or reduced-price lunch. Policymakers take the appropriated funding amount and distribute the funds based on an eligible school’s membership.

In the next month, we’ll take a look at a few other factors that impact how states allocate school funding, specifically for high-need student populations and rural schools. Stay up to date with Ed Note to learn more.

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Policy Researcher at Education Commission of the States |

As a policy researcher, Alyssa contributes to the policy team's work in various areas of state education policy. Prior to joining Education Commission of the States, she worked as a legislative aide in the Colorado General Assembly. Alyssa earned a bachelor's degree in economics from the University of Denver and a master's degree in public policy and international law from the American University of Paris.

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State Relations Strategist at Education Commission of the States |

Lauren supports the state relations team in cultivating relationships and building partnerships with all Education Commission of the States Commissioners. She is the liaison for Alabama, Arkansas, Delaware, Georgia, Kentucky, Louisiana, Mississippi, New Jersey, North Carolina, Oklahoma, Rhode Island, South Carolina and Tennessee. Prior to joining Education Commission of the States, Lauren worked on public policy and government relations with Save the Children Action Network in Colorado, Clayton Early Learning, National Conference of State Legislatures and with several members of the legislative and executive branches in Colorado. Lauren is dedicated to helping policymakers across the states connect and collaborate to improve education systems for all students.

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Policy Analyst at Education Commission of the States |

As a policy analyst, Eric supports the policy team by tracking legislation, completing 50-State Comparisons and answering information requests. Prior to joining Education Commission of the States, he earned a bachelor’s degree at the University of Kansas and a master’s of public administration at the University of Colorado Denver.

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