School Funding: Nurturing Educational Opportunities for All Students

School funding in the US is derived primarily from local and state resources. The federal government allocates only a small share (typically, less than 8%) of the total revenue for education.

A high-level view into regional and national school funding metrics raises sufficiency, adequacy, and equity concerns over whether the current system is ideal for nurturing educational opportunities for all students at all times during the school year.

Unfortunately, school districts in high-poverty areas that cater to a larger population of minority students typically receive less funding per student than districts in low-poverty areas that cater predominantly to white students. These apparent discrepancies in student funding highlight the educational system's inequalities.

High-poverty school districts are not able to spend enough per student in order to attain national average test scores—the widely-accepted standard metric for assessing the various inadequacies of the education system. As it stands, identified below are the main challenges facing public school funding in the country and the steps that can be used to address these inadequacies.

Inadequate and Inequitable School Funding Among Low-Income Students

The current school funding system shortchanges students, especially those from low-income households. It is generally inequitable and inadequate since it relies mainly on local and state resources derived from property tax revenues and other sources that cannot meet the funding demands.

The federal government's role is small, and funding levels vary widely across different states, with low-poverty school districts receiving higher funding per student than their high-poverty counterparts.

School Funding Inequities Aggravated by the Economic Downturn

The inadequacies of the existing education funding system tend to be magnified every time the economy goes through a recession, such as during the Great Recession of 2007 and the more recent Great Lockdown recession that resulted from the COVID-19 pandemic.

After the 2007 recession, it took 8-9 years, on average, for school funding levels to return to their pre-recession levels. In the case of high-poverty school districts, the per-student revenue took even longer to rebound to the previous spending levels. This trend will likely be the same for post-pandemic spending.

Despite catching up, the high-poverty school districts still lag when it comes to the average per-student revenue. The long-standing funding inequities and inadequacies, coupled with the post-recession repercussions observed during economic downturns, cost students and the entire country.

The Way Forward—A Complete Overhaul of the School Funding System Through Reforms

Policymakers need to rethink how schools are funded overall, especially after periods of economic recession.Public education is an investment in society's present and future and serves to stabilize the economy during economic downturns. It is a ready-to-deploy tool for counteracting the effects of recessions since public education promotes overall spending and, as a result, boosts demand when private sector expenditures drop. Increasing school funding is a stimulus for boosting economic recovery.

A funding plan that supports the educational needs of all students must be consistent and stable. It must ensure that the investment requirements it proposes are proportional to the economic and societal importance, size, and types of school district constraints that are to be addressed.

School Funding Sources

The potential success of any student begins with the opportunities and resources available to them. Federal funding needs to be allotted to meet the most critical needs of students all over the country.

American Rescue Plan

In March 2021, Congress enacted the American Rescue Plan (ARP). This $1.9 trillion stimulus package provides critical school funding, and aims to reduce child poverty by 50%, make healthcare affordable, create millions of jobs, and support millions of businesses.

Nearly $170 billion of the ARP funds was allotted for K-12 public schools to:

• Modify learning spaces in compliance with social distancing requirements;
• Revamp the existing HVAC systems;
• Acquire additional buses and drivers; and
• Provide professional support through school counselors to address learning loss, mental health priorities, and student trauma.

Every Student Succeeds Act

The Every Student Succeeds Act (ESSA) is a federal law enacted in 2015 to replace the previous legislation known as "No Child Left Behind." The Act authorized significant funding aimed at increasing the capacity of local communities, schools, local educational agencies, and states to improve student learning conditions in schools and provide students with equitable access to a multifaceted education.

Schools can use ESSA funds to:

• Strengthen teacher-family and community involvement;
• Improve school safety;
• Enhance school climate;
• Increase student access to well-rounded psychological services; and
• Create socially supportive learning environments designed to promote learning.

ESSA requires school districts to use at least 20% of allotted funds on these activities. One of the ESSA funding streams is through the Student Support and Academic Enrichment (SSAE) grants, allocated to states and local educational agencies via the Title I funding allocation formula.

For schools to qualify for this funding, they must develop and submit district plans with a needs assessment examining the potential for improvement in three critical areas:

• Opportunities and access to a well-rounded education;
• A safe and supportive learning environment; and
• Opportunities for technology-first custom learning experiences.

How Schools Can Use Non-Recurring Federal Emergency Funding

The public education system may periodically receive an infusion of additional federal funding, with unprecedented amounts now targeted for future allocations. If used strategically, these emergency funds can improve student outcomes by reducing the student achievement gap between high and low income students.

Here’s a list of some strategies worth exploring.

• Combine emergency funding with other local, state, or federal education laws to cover initial-phase, start-up, one-time, or short-term costs associated with rolling out or scaling a project or program.
• Provide teachers with professional growth opportunities to meet extended or differentiated career needs.
• Provide alternative strategies for addressing teacher shortages, hiring extra staff, and prioritizing hiring minority teachers and administrators.
• Introduce short, small-scale activities that learning education agencies or schools can use to gauge whether an existing program is practical and if they should expand it.
• Invest in system innovation to improve multiple-need student services and free up resources that can be redirected to support other learning requirements.
• Advance social and racial justice among minority and disabled students to promote equity.

Final Thoughts

School funding isn’t disbursed directly to schools. Instead, state and federal funds are channeled through districts, which then purchase resources, construct and maintain schools, and hire administrators, teachers, and support staff. The primary mechanism that targets districts serving low-income students is state funding. The federal government also channels funding towards disadvantaged families, but not to the same extent. That said, funding can only be progressive if most of the money goes to low-income students, and this ultimately depends on a state’s demographic structure, the policies in place, and how different funding streams interact. How states divide their school districts affects their ability to target disadvantaged students through funding formulas.

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