Jennifer Cohen Kabaker: All Related Content

The American Recovery and Reinvestment Act of 2009 provided an unprecedented $100 billion in additional funding for education over fiscal years 2009, 2010, and 2011. It has been notoriously difficult to interpret how states used those funds, despite promises of “transparency” from the Obama Administration. Did the money go to support the states that needed the most help? According to a recent U.S. Department of Education report, no—on average states with high per pupil spending and high student achievement received the most.

The report examines distributions of ARRA funds per pupil at the state level, grouping them by various indicators of need such as student poverty, budget gaps, and percentages of students attending persistently low-achieving schools.  The authors find that 25 percent of states that had the highest per pupil spending received an average of $435 more per pupil than the 25 percent with the lowest spending. The trend is mostly explained by $4.4 billion in Race to the Top (RttT) grants which were awarded primarily to higher-spending states.

The 25 percent of states with the highest student poverty rates received the least ARRA funding per pupil, $1,358 compared to $1,372 on average. The states that received the most per pupil were actually the states with average poverty rates (between 12.9 and 20.4 percent). Those states received $1,419 per pupil on average. Similarly, states with the highest performing students (based on the percentage scoring proficient on National Assessment of Education Progress tests) also received more per pupil than states with lower-performing students. The high-performing states received $1,463 per pupil, while the low-performing states received $1,304.

However, the report’s findings suggest more ARRA funds found their way to states with big budget gaps. States with the largest budget shortfalls did receive more funding per pupil than those with smaller shortfalls – a surprising conclusion given that Congress did not target the funds to states with large funding gaps. The 25 percent of states with the highest funding gap received $1,431 per pupil, while those states with the smallest gaps received $1,288. Again, this difference is primarily attributable to Race to the Top funding – the states with the largest gaps received $109 per pupil in RttT, while the states with the smallest gaps received only $7 per pupil.

Overall, it is not be completely surprising that the ARRA funds did not target states with the highest need as measured by student achievement and spending. Much of the ARRA funds were distributed through existing federal funding formulas like Title I or Individuals with Disabilities Education Act, which take into account many other factors besides need like state size. The State Fiscal Stabilization Fund, the largest program in the ARRA, distributed funds according to population size. Instead, Race to the Top, a $4.4 billion competitive grant program, seems to drive most of the funding differences across states. This is likely because it was intended to benefit states that were willing to or already investing in their education systems and demonstrating positive results.

Still, interpret the Department’s conclusions with caution. In calculating per pupil expenditures, the authors had to exclude some ARRA funding that technically went to education programs. But more importantly, the figures include all State Fiscal Stabilization Funds allocated to each state, not only those spent on K-12 education. States were allowed to spend the funds on both K-12 and higher education, and on average 20 percent of the funds went to higher education. As a result, the numbers cited above and in the report actually overstate per pupil spending from ARRA, particularly in states that spent most of those funds on higher education, like Wyoming and Colorado.

In all, the report sheds some much-needed light on the distribution of ARRA funds to states (as well as school districts, though that is a whole other discussion). And it suggests that the various ARRA programs mostly did what they were intended to do – push out money to states as quickly as possible based on existing funding formulas and population. While the Department attempted to encourage states and districts to use these formula funds to support reform efforts, few did. Instead the overwhelming goal of keeping teachers in classrooms and students in seats dominated. Any hope of reform now rides completely on the backs of the competitive grant programs.

Last Friday, the Office of Management and Budget at the White House released a sequestration report, confirming the impact of the automatic, across-the-board funding cuts scheduled for January 2013. Sequestration resulted from the “supercommittee’s” failure to find $1.2 trillion in 10-year cuts to federal spending (or tax increases) last year. According to the report, the majority of Department of Education spending programs will face an 8.2 percent cut as a result of the sequester. Unless Congress and the President agree to turn off the sequester, school districts across the country will face some difficult budget decisions starting in January and continuing into the 2013-14 school year.

To get a better idea of what these cuts will mean for schools, Ed Money Watch used Census data on school districts’ total annual revenue and federal revenue for the 2009-10 school year to calculate the percent of each district’s revenue made up of federal funds, as well as how much each district stands to lose under a 8.2 percent cut. (We did a similar analysis recently looking at the impact of Congressman Ryan’ proposed 20 percent cut.)

It is important to note that not all cuts will happen at the same time. Specifically, cuts to Title I and Individuals with Disabilities Education Act spending will not take effect until next school year because the programs are mostly forward funded (due to something called “advance appropriations”). Other programs, such as Impact Aid, will face immediate cuts in January 2013. School nutrition programs, however, are exempt from the sequester. Unfortunately, the Census data do not disaggregate by funding source, so it is not possible to include this exemption in our calculations.  

Unsurprisingly, the districts that rely the most on federal funds for their annual revenue will take the greatest hit due to a 8.2 percent cut as a proportion of their total revenue. For example, Shannon County School District in South Dakota relied on the federal government for 67.9 percent of its annual revenue in 2010. If that funding were to be cut by 8.2 percent, Shannon County would lose $1.5 million, or 5.6 percent of its $18.1 million in annual revenue. Shannon County serves over 1,100 students, 98 percent of whom participate in Free and Reduced Price Lunch and 99 percent of whom identify as American Indian.  The district receives nearly $5 million in Title I funding for disadvantaged students and over $8 million in Impact Aid funding to replace revenue lost from the lack of property taxes derived from Bureau of Indian Affairs land.

Similar stories can be told for numerous districts with high proportions of low-income, American Indian, English Language Learner, or other high-needs students.

But even districts that do not rely on federal funding for large portions of their annual revenue stand to lose significant funding. Forty-eight districts stand to lose more than $10 million should the 8.2 percent cut become a reality. These large districts include New York City Public Schools, which would lose about $168 million, Los Angeles Unified School District, which would lose $111 million, and Chicago Public Schools, which would lose $100 million.

But it also includes many lesser-known districts like Gwinnett County School District outside of Atlanta, GA, which would lose over $16 million, or Cypress-Fairbanks School Districts outside of Houston, TX, which would lose over $10.5 million. Though these figures represent less than 2 percent of each of these district’s budgets, finding savings to accommodate these cuts will surely be a challenge.

The 8.2 percent cut from the sequester will also have a dramatic impact on districts that serve particularly fragile communities like students with the most challenging special education needs or districts that have recently experienced natural disasters. For example, the Los Angeles County Office of Education, which serves nearly 9,000 students with severe special needs, would lose nearly $37 million, 3.6 percent of its annual revenue. The Recovery School District in New Orleans would lose nearly $12 million, 4.0 percent of its revenue.

Sequestration is a blunt instrument that prevents Congress from targeting spending cuts to the programs that are best equipped to face such cuts. Limiting federal spending may be a worthy goal in this austere time, but the current method stands to hurt the school districts and students that need the extra funding support the most. This is not an argument for increasing federal spending, but rather an argument for ensuring that any decisions to cut such spending are done thoughtfully and with an eye towards equity.

To download these data for every school district in the country, click here. 

Paul Ryan’s proposal to cut federal spending by 20 percent has been impossible to ignore – especially what that might mean for education programs. Federal spending currently makes up about 10 percent of annual spending for education, so a 20 percent cut to that spending would only translate to 2 percent of total spending, on average. But what about the impact on non-average school districts?  As it turns out, more than 1,500 districts rely on federal funds for 20 percent or more of their annual revenue, and those districts would take a big hit.

Last week, Ed Media Commons showcased data from the Federal Education Budget Project, Ed Money Watch’s parent initiative, to reveal that these cuts could mean much more for districts that rely more heavily on federal funds. Using Census data on school districts’ total annual revenue and federal revenue for the 2009-10 school year, we calculated the percent of each district’s revenue made up of federal funds, as well as how much each district stands to lose under a 20 percent cut.

Of the more than 1,500 districts that rely on federal funds for 20 percent or more of their annual revenue, seventy-seven would lose more than 10 percent of their annual revenue if Congress were to cut federal spending by 20 percent. Those districts tend to be smaller, with enrollments mostly between 100 and 2,000.

These districts’ reliance on federal revenue can mostly be explained by high proportions of American Indian students. Many districts receive funds under Impact Aid, a federal program that provides funds to school districts with high proportions of “federally impacted” students like American Indians. Because those districts do not benefit from property tax revenue from people living on Indian reservations, the federal government makes up for that lost revenue. For example, Sanders Unified School District in Arizona had an enrollment of 1,049 in 2010 and nearly 97 percent of those students identified as American Indian. Of that district’s approximately $15 million in annual revenue, just over $9 million comes from federal sources. If Congress were to cut spending by 20 percent, Sanders Unified could lose as much as $1.8 million, 12 percent of its annual revenue.

Many large districts would also be disproportionately affected by big cuts to federal education funding. Los Angeles Unified School District, Chicago Public Schools, and Miami-Dade School District, the second-, third-, and fourth-largest school districts in the country, each rely on federal funds for more than 16 percent of their annual revenue. Chicago receives nearly 24 percent, or $1.2 billion, of its annual $5.1 billion in total revenue from federal sources. That federal funding comes from several federal programs aimed at low-income students such as Title I (about $300 million) and Free and Reduced Price Meals (about $140 million), as well as special education (about $90 million). A 20 percent cut to federal funding would mean a loss of $244 million for Chicago.

Of course, some districts rely very little on the federal government for education funding. Over 2,100 districts get 5 percent or less of their annual revenues from federal sources. These districts also tend to be smaller – only 248 have enrollments over 5,000 – and tend to serve wealthier and less diverse populations. Cheshire School District in Connecticut, for example, had an enrollment of 4,950 in 2010 and an annual revenue of over $71 million, only 4.5 percent of which came from federal sources. The district has a student poverty rate of only 3.1 percent, very few English language learners, and is made up of nearly 87 percent white students. This means the district receives very little federal funding under programs like Title I or Free and Reduced Price Meals. If federal spending were cut by 20 percent, Cheshire would only lose $637,000 in revenue.

While a 20 percent cut would be devastating for many school districts, others would lose only the aforementioned 2 percent or even less. These austere times mean that cuts to federal spending are likely. We hope that Congress is able to target those cuts in such a way that protects the most vulnerable students that benefit directly from federal spending. While Title I and Individuals with Disabilities Education Act special education spending are often the most discussed, it is important that programs like Impact Aid also factor heavily into negotiations. For many of these districts, such a cut could mean millions of dollars or a substantial portion of their annual revenue.

Click here to download these data for every school district in the nation. To view programmatic and demographic data, please visit febp.newamerica.net/k12.

The New America Foundation's Federal Education Budget Project announced Monday an update to its education funding database, www.edbudgetproject.org. The update includes the most recent data available for virtually all of the nation’s higher education institutions.

These days, anyone who follows the news can recite statistics on student debt. The media has repeated countless times phrases like “there is $1 trillion in outstanding student debt” and “borrowers have an average of $23,300 in loans.” But do these numbers really mean what the media, policymakers and advocates think they mean? Which is, do these numbers tell how much debt the typical student carries? Not at all.

First and foremost, it’s important to clarify that “$1 trillion” refers to the total outstanding balance of the entire universe of student loans. That’s all loans from federal and private sources, for undergraduate or graduate students attending or who attended any type of school. The loans could have been taken out in September of 2011 for the current school year or they could have originated in 1995 but have not been repaid yet.

Similarly, that $23,300 number, which comes from a New York Federal Reserve Bank study of a representative sample of all outstanding loan balances as of 2011, refers to the average student loan balance only for students who took out loans. It excludes students who have already paid their loans off or who did not take out any loans.

Despite their ubiquity, these numbers don’t actually paint a picture of student borrowing as experienced by the typical borrower. Yet most press accounts imply that the average student loan balance for borrowers reflects the student loan balance for the average borrower.

In fact, most borrowers carry student loan balances well below the average. According to that same study, the median student loan balance is $12,800. This means that half of borrowers owe less than that amount and half owe more. Similarly, 75 percent of borrowers owe less than $28,000, and 90 percent owe less than $54,000 currently. While the press can certainly cite the average loan balance at $23,300, they should also make clear that most borrowers currently owe significantly less.

Now consider the discussion about debt owed by recent graduates. The most recent survey for the Baccalaureate and Beyond dataset, collected by the National Center on Education Statistics, provides data on cumulative student loan balances as of 2009 for the graduating class of 2008. These data show that the average student loan balance was $25,619 for students that took out loans.

But once again, the average borrower owed far less than that amount. Specifically, the data suggest that the typical borrower (the borrower with a loan balance at the 50^th percentile) owed $19,857 one year after graduation. Seventy-five percent of borrowers owed less than $33,857 and 90 percent owed less than $50,000. On the other end, 25 percent of borrowers owed less than $10,000.

It is also important to note that the Baccalaureate and Beyond data show that 65.6 percent of students took out loans. So that means that 34.4 percent of graduates of the class of 2008 had no loans to begin with.

This is why the distinction between average and median student debt, and the distribution of debt among percentiles of borrowers matters. By focusing on average student debt, journalists, policymakers and advocates are skewing the discussion on student debt toward one extreme that affects a minority of borrowers. They’ve convinced their audience (and likely themselves) that the average loan balance (which is disproportionately affected by outlier loans with particularly large balances) should drive the discussion, not the debt of the average student borrower, nor the debt levels of the majority of borrowers.

As the discussion on student debt continues, journalists, policymakers and advocates should bear in mind what the data cited above say about the typical borrower: she is in less debt than the average loan size figures would have us believe.

“It has more to do with how they spend it than what they're spending,” said Jennifer Cohen, a senior policy analyst for the Federal Education Budget Project, which is maintained by the New America Foundation. For example, New Jersey and New York are ...

The new tests are projected to be ready for use in schools in 2014. It is too early to determine if these tests are going to provide a more accurate picture of student learning, according to Jennifer Cohen, Senior Policy Analyst at the New American Foundation, a nonprofit, nonpartisan public policy institute, and there are still challenges that lie ahead for this program.

Original article

In August of 2010, Congress passed and the president signed into law the Education Jobs Fund, a $10 billion program meant to fill gaps in state funding for K-12 education salaries and benefits. The funds, which were intended for use in the 2010-11 school year, are available through September 30^th, 2012. Much like the State Fiscal Stabilization Fund, a similar program created in the American Recovery and Reinvestment Act of 2009, Congress required that the Department of Education distribute the funds among states based on population. Lawmakers also included a maintenance of effort (MOE) provision that essentially required states to maintain certain levels of funding for both K-12 and higher education. The data gathered through this maintenance of effort provision, which each state must submit annually on spending levels, provide an interesting picture of state spending for K-12 and higher education and tax revenues since 2006. Below, we examine that data to gain insight on the degree to which low tax revenues have affected state spending on education during the downturn.  

Unlike the State Fiscal Stabilization Fund, the maintenance of effort provision for the Education Jobs Fund allowed each state to select a different MOE calculation depending on their tax revenue situation. The three options are: (1) maintain K-12 and higher education spending at 2009 spending levels; (2) maintain K-12 and higher education spending levels at the same proportion of state spending as they did in 2010; or (3) if state tax revenues in 2009 were lower than in 2006, maintain K-12 and higher education spending levels at either 2006 levels or in the same proportion of state spending as they did in 2006.

Each method results in very different data, so it is best to analyze fluctuations in state spending for education by each MOE method. Today, we will examine the data on the 31 states that opted to use method 3 – because their tax revenues were lower in 2009 than in 2006, they could keep spending for K-12 and higher education at 2006 levels (we’ll save the discussion of states that kept spending in the same proportion of total spending as 2006 for another day).

Unsurprisingly, the degree to which total tax revenues in these 31 states dropped from 2006 to 2009 varied greatly. New Mexico saw the greatest drop in revenues at 23.2 percent, while Georgia saw a 16.7 percent drop and Arizona saw a 15.6 percent drop. West Virginia experienced the smallest drop at 0.1 percent (about $4 million).

Despite the revenue drops these state reported, their MOE submissions show that they increased education spending significantly from 2006 to 2011, particularly for K-12 education. For example, Utah’s submission shows a 28.4 percent increase in funding for K-12 education from $1.8 billion to $2.3 billion. Oregon shows an increase of 19.2 percent and Illinois shows an increase of 19.8 percent. Increases in Indiana and Nevada are both over 65 percent.  Only three states – Arizona, Minnesota, and Mississippi – showed increases below 3.0 percent.

Of course, it wouldn’t be unusual for states to increase  K-12 education spending over a 5-year period under more normal budget circumstances due to increasing enrollment and costs. What the MOE data could be telling us is that many states protected K-12 spending during the economic downturn that began in 2007.

But these numbers are also curious, if not dubious. Large contractions in state tax revenues and repeated media reports of states cutting education spending make some of these data difficult to believe. 

The MOE data for the 31 states also show growth in higher education spending, though not at as high of rates as K-12 spending. New York State showed an increase of 22.3 percent from $3.3 billion to $4.0 billion from 2006 to 2011 and Connecticut showed an increase of 17.6 percent. But many states showed increases below 3.0 percent – 13, including Arizona, Colorado, Illinois, Pennsylvania, and Virginia. Low growth for higher education in many states is not surprising. States often make cuts (or delay increases) to higher education before K-12 education because it has a smaller constituency and they can rely on tuition increases to make up the difference. However, many public higher education systems have faced dramatic increases in enrollment as a result of the economic downturn, placing greater pressure on their strapped systems.

One can’t help but wonder what to make of the MOE reports. Are state K-12 and higher education systems really better off in terms of state support than media reports would have us believe? It’s hard to know for certain because the numbers may include block programs or additional funding streams that are not included in basic state support. State spending through these specific programs could benefit only certain districts or be earmarked for very specific uses.

What is clear is, however, is that states have been able to use the MOE provision of the Education Jobs Fund to their advantages. All 31 states successfully show that their tax revenues were lower and that they funded K-12 and higher education above 2006 levels in 2011 – thereby meeting the MOE requirement. Whether districts and schools are actually seeing more funding than in 2006, especially per pupil, is entirely another story.   

To download data on all 50 states and the District of Columbia, click here.

“It has opened up a new world of presidential power that people didn’t know was ripe for the taking,” says Jennifer Cohen, education expert at the New America Foundation, a centrist think tank.

Original article

At Ed Money Watch, we have often encouraged Congress to consider changing the Title I funding formulas to more logically target disadvantaged students in states and school districts. That’s why we were glad to learn that today the House Committee on Education and the Workforce will likely vote on an amendment to the Student Success Act (HR 3989) that would change the Title I funding formula to more equitably fund rural school districts.

Known as the All Children are Equal (ACE) Act, Rep. Glenn “GT” Thompson’s (R-PA) amendment would phase out the number weighting provision in the Title I funding formulas. Currently, number weighting directs disproportionately high Title I allocations to large school districts, even though they may have relatively low concentrations of students in poverty. Eliminating this provision would theoretically ensure that smaller districts with larger poverty concentrations – typically rural districts – receive a greater, more fair share of funding.

Organizations representing rural school districts, such as the Rural Schools and Community Trust, have long pushed to eliminate number weighting in the Title I formulas. A brief look at the data shows why.

To get a better sense of how Title I allocations vary by school district locale type – urban, suburban, town, and rural, as defined by the National Center for Education Statistics – Ed Money Watch went to the data the Federal Education Budget Project collects on Title I allocations by district.* In each state, we calculated the average 2010 Title I allocation per poor pupil (as defined by the Census poverty rate) weighted by the population of poor students by district locale type. The data exclude Hawaii and the District of Columbia, each of which has only a single school district. Wisconsin is also excluded from the analysis because the National Center for Education Statistics does not provide a locale type designation for school districts in the state. This average allocation gives us a better sense of how much more urban and suburban districts are getting than rural districts as result of number weighting and other provisions in the Title I formulas.

Our findings match expectations, for the most part. In all but six states, the federal funding formula provided urban districts with more Title I funding per poor pupil than rural school districts. In Connecticut, Massachusetts, and Michigan, urban districts received more than 50 percent more Title I funding per poor pupil than their rural counterparts. The funding formula provided urban districts in another 22 states with between 20 and 50 percent more Title I funding per poor pupil than rural districts in those states. The six states where rural districts received more per poor pupil than urban districts – Kentucky, Montana, New Mexico, North Dakota, South Dakota, and West Virginia – are both small and predominantly rural, potentially explaining why their rural districts fare so well. It is possible that the large number of rural districts in each state and the influence of the small state minimum may overcome the effects of number weighting. North and South Dakota are particular outliers – the funding formula provided their urban districts with 37.1 percent and 45.6 percent less Title I funding per poor pupil, respectively, than their rural districts.

The results are less clear-cut for suburban districts. The federal funding formula provided suburban districts in 25 states with more Title I funding per poor pupil than their rural counterparts.  Of the 22 states where rural districts received more Title I funding per pupil, rural districts in 5 states received more than 50 percent more than their suburban counterparts. In North and South Dakota, rural districts got more than twice as much Title I money per poor pupil than suburban districts. But again, these small, rural states likely have very few suburban districts.

Given this evidence, it is clear that urban districts in the vast majority of states fare far better per poor pupil than their rural counterparts. However, the urban advantage is much stronger in some states than others, suggesting that other provisions in the Title I funding formulas – like the small state minimums and state fiscal effort – alter the effect of number weighting. But the data also suggest that the number weighting in the funding formula does not benefit suburban districts as much as it does urban districts – in many states, rural districts receive more Title I funds per poor pupil than their suburban counterparts.

As the lawmakers on the House Education and Workforce Committee get set to vote on the All Children are Equal (ACE) Act, some might shy away from what will certainly be a complicated debate. But this pending formula fight is worth it.

Not only should Congress address how the current formula – which distributes over $14.5 billion in federal funding to districts annually – disadvantages rural districts with its number weighting provision, they should tackle other provisions in the formula that also skew Title I distributions to states and districts with smaller concentrations of poor students. 

Click here to see these data for all 50 states.

Click here to search for your district on the Federal Education Budget Project website.

*We downloaded the full dataset for K-12 districts (available here) and conducted the analysis in Stata.

President Barack Obama submitted his fourth budget request to Congress on February 13th, 2012. The detailed budget request includes proposed funding levels for federal programs and agencies in aggregate for the upcoming ten fiscal years, and specific fiscal year 2013 funding levels for individual programs subject to appropriations. Congress will use the president's budget request to inform its consideration of tax and spending legislation later this year, including the fiscal year 2013 appropriations bill that will set specific funding levels for federal education programs. Fiscal year 2013 begins October 1, 2012.

In August of 2011, Congress signed the Budget Control Act which set appropriations funding limits for 2013 at $1.047 trillion (excludes funding for overseas military operations, emergencies, and other adjustments). This is $4 billion above enacted 2012 appropriations. That law also established a congressional committee to draft legislation that would reduce the deficit over nine years. The committee failed to meet its goals last year, triggering a pending “sequester” (across-the-board spending cuts) of the yet-to-be enacted fiscal year 2013 appropriations. While the pending sequester is scheduled under current law, the president’s fiscal year 2013 budget request proposes that Congress pass legislation to turn it off, maintaining the appropriations funding limit of $1.047 trillion for fiscal year 2013.  

Despite the minimal increase in total appropriations funding allowed under the Budget Control Act (pre-sequestration), the administration has proposed an overall increase for education programs for fiscal year 2013. In fact, under the president's proposal, the U.S. Department of Education would receive the largest increase (in absolute terms) in discretionary funding from fiscal year 2012 levels compared to any other non-security domestic agency.

The administration has proposed a $69.8 billion budget for education programs subject to the annual appropriations process, up from $68.1 billion in 2012. The increase is due to moderate funding increases for several programs, including Race to the Top, Work-Study grants, and the Teacher Incentive Fund. Other key programs, such as Title I Part A grants to local educational agencies, Individuals with Disabilities Education Act Part B grants to states, and Pell Grants would be funded at 2012 levels. In addition, the president is requesting $62.9 billion in fiscal year 2012 for education stimulus spending under his American Jobs Act proposal outlined in 2011. This funding is proposed in addition to the enacted fiscal year 2012 appropriations totaling $68.1 billion for the Department of Education.

The Federal Education Budget Project this week released an issue brief that provides a summary and analysis of the president's fiscal year 2013 education budget request.

Click here to view the full report.