Center for American Progress

RELEASE: Low-Income Schools Shortchanged by $8.5 Billion, New CAP Analysis Reveals
Press Release

RELEASE: Low-Income Schools Shortchanged by $8.5 Billion, New CAP Analysis Reveals

With ESEA reauthorization underway, Congress should close the so-called comparability loophole that deprives low-income students and schools of needed resources.

Washington, D.C. — A new analysis released today by the Center for American Progress shows that a funding loophole in the Elementary and Secondary Education Act, or ESEA, deprives more than 12,000 schools and 4.5 million low-income students of resources that are otherwise available to their more affluent counterparts. These inequitably funded schools receive around $1,200 less per student than other schools in their districts; however, if the federal loophole were closed, high-poverty schools would receive around $8.5 billion in additional funds each year.

While Title I, Part A, of the ESEA requires school districts to provide “comparable” educational services in high-poverty and low-poverty schools as a condition of receiving Title I dollars, districts can compute comparability using average teacher salaries or teacher-to-student ratios instead of actual expenditures on teacher salaries. Since teacher salaries constitute the largest proportion of school budgets and teachers with greater experience earn higher salaries and tend to teach in lower-poverty schools, the law can mask significant funding inequities.

The Center for American Progress’ new brief presents a state-by-state breakdown that reveals the estimated number of inequitably funded schools and the total number of low-income students in those schools using 2011-12 data from the U.S. Department of Education.

“Title I is supposed to ensure that students living in poor communities have access to the same educational opportunities as their more affluent peers. Unfortunately, due to the so-called comparability loophole, massive disparities in school funding persist,” said Catherine Brown, Vice President of Education Policy at CAP.

“Due to the comparability loophole, more than 4.5 million low-income students across the country are attending schools that are not funded to the same level as schools that may be just a few blocks away,” said Robert Hanna, Senior Policy Analyst at CAP. “Congress should strengthen the comparability requirement in ESEA reauthorization and give states and districts a phase-in period to comply.”

“Simply put, the size of these funding gaps is appalling. But contrary to popular belief, these gaps aren’t too large to be closed feasibly. Considering how much states and districts spend on education, closing the gap would only cost between 1 percent and 2 percent of their total education budgets on average,” said Max Marchitello, Policy Analyst at CAP.

Under the comparability requirement in current law, for instance, a hypothetical Title I-eligible school—East Dillon Elementary—has 200 students and 10 teachers paid at an average salary of $45,000. Its neighbor—more affluent West Dillon Elementary, which has the same number of students and teachers—pays its teachers an average salary of $65,000. Total expenditures between the two schools differ by $400,000, and per-pupil expenditures are $2,000 less per student. Under federal law, however, these schools are still comparable. Such a scenario is playing out at thousands of schools nationwide, CAP’s analysis reveals.

To ensure that low-income schools are funded at equal levels with their more affluent counterparts, CAP recommends that Congress update the law and close the comparability loophole in the following ways:

  • Base the comparability calculation on actual expenditures, including actual teacher salaries
  • Require districts to achieve comparability between Title I and non-Title I schools only by demonstrating that Title I schools receive state and local funding that is at least equal to the average of the district’s non-Title I schools
  • Require districts that only serve Title I schools to show that higher-poverty schools receive no less than the average total of state and local funds for lower-poverty schools

Click here to read “Comparable but Unequal” by Robert Hanna, Max Marchitello, and Catherine Brown.

For more information or to speak to an expert, contact Allison Preiss at [email protected] or 202.478.6331.