Evaluating the Role of States in Federal Education Programs

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K-12 public education in the U.S. is funded primarily by state and local governments. In fact, only about 8 percent of elementary and secondary education spending comes from the federal government. 

About 47 percent of total K-12 education spending in the U.S. comes from state governments. States vary greatly in their ratio of federal, state and local funding (table 1). Louisiana has the highest percent of educational funds that come from the federal government, at 15 percent. Vermont has the highest percent of state funding at 89 percent, and South Dakota has the lowest percentage of state funding at 30 percent. New Hampshire has a local contribution of 60 percent, and  Washington, D.C., has a local contribution of 89 percent.

Federal education funding is usually provided through programs, which have certain requirements and criteria for participants, sometimes including fund-matching requirements. Most federal funding programs dealing with K-12 education are administered by the U.S. Department of Education. Yet, the largest U.S. Department of Education program is the Pell Grant program, which provides money to low-income individuals to pursue post-secondary education.  

In K-12 education, the largest U.S. Department of Education program is the Title I program, which provided $14.9 billion to schools in fiscal year 2016. Title I is authorized (table 2) under the Elementary and Secondary Education Act and provides funding to school districts that serve high percentages or numbers of low-income schools. The funding must provide targeted support for failing or at-risk students. If the school’s population comprises more than 40 percent of students who are low-income, though, Title I funds can be used for school-wide programs. 

Two substantial federal education programs are not administered by the U.S. Department of Education. The Head Start program is administered by the Department of Health and Human Services, and the National School Lunch Program is a division of the Department of Agriculture. Although these programs are federally funded, states also play a role in providing those services, either through direct supplemental funding of the federal program or through providing similar state programs. 

The federal Head Start program supports the development and school-readiness of low-income children from birth to age 5. Head Start is a pre-kindergarten program for 3- and 4-year-olds who make up 80 percent of the children served by the Head Start program. The program also includes Early Head Start, which provides services and child care for infants and pregnant women. 

Head Start provides federal grants to local grantees, such as child care centers or schools, for up to 80 percent of the total program cost.1 In exchange for these funds, the grantees are subject to certain program requirements relating to enrollment, services and program structure. The grantee is responsible for funding the remaining 20 percent with nonfederal funds, unless they are granted a waiver by the local Health and Human Services officer.2 These funds can be direct or through in-kind donations of volunteer time or resources such as building space. 

Sometimes, states supplement the federal money in order (table 3) to help local agencies meet their nonfederal match requirements or to expand services and enrollment capacity.3 Fourteen states provide a direct state supplement to the federal Head Start program. 

Oregon has the highest percent of total funding that is attributed to their state supplement; almost 45 percent of their funding is provided from the state. They also have the largest amount of state supplement, at $66 million. The lowest state supplement is provided by Ohio, which amounts to $384,000 and approximately 0.12 percent of the total Head Start funding in the state.

Thirty-six states do not provide a supplement to Head Start funding. However, 43 states and D.C. have their own state-funded, pre-K programs, which may provide similar services to low-income children.4 Only five states do not invest state money into pre-K programs.5 

Under the Head Start program, states can apply for a grant to provide a state director of Head Start collaboration, who provides technical assistance for Head Start grantees in the state. For more information the role of states in providing pre-K services, see the CSG Capital Research Brief, Early Childhood Investments.

The National School Lunch Program works with participating schools to provide nutritionally balanced, low-cost or free lunches to students from low-income families. The U.S. Department of Agriculture administers the program, providing cash reimbursements and donations of certain commodities. 

The National School Lunch Program requires states to (table 4) match a portion of funding provided to school food authorities. The percent match required varies across states, from Nevada’s 0.47 percent to New Hampshire’s 2.91 percent. 

The National School Lunch Program instructs participating school food authorities to comply with specific dietary requirements. These requirements are based on the Office of Disease Prevention and Health Promotion’s publication, Dietary Guidelines for Americans. School districts who meet the requirements can obtain a certificate of compliance, which entitles them to an additional 6-cent per lunch reimbursement.

Although state and local governments provide the majority of K-12 education funding, the federal government supplements those efforts through specific, targeted programs. The federal government plays a significantly larger role in funding pre-kindergarten and postsecondary education programs than in K-12 education programs. States and localities elect to participate in federal programs, where they adhere to certain guidelines in order to receive federal funds. Some states, though, may choose to operate independent programs that provide similar services to the federal ones. 

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