Dive Brief:

• U.S. Secretary of Education Betsy DeVos issued final guidance Thursday on how districts can comply with a rule that federal funds are used to supplement and not replace state and local dollars for education.
• The guidance says districts must show the methods they use to allocate state and local funds are “Title I neutral.” In other words, schools should receive all of the state and local funds they would receive if they were not Title I schools — but districts are not required to spell out which costs or services paid for with Title I dollars are supplemental.
• The new rule is intended to “reduce administrative burden, simplify compliance and promote effective spending,” according to the Department of Education press release. “Teachers and school leaders consistently tell me the ever-growing paperwork burden is one of the biggest impediments to focusing on what really matters: the kids,” DeVos said in the statement, adding that the rule “makes clear that a school district has significant flexibility in how it demonstrates compliance with the law.”

Dive Insight:

When the department issued a draft of the guidance in February, advocates for increasing resources to high-poverty schools said that it didn’t do enough to ensure that schools were using federal funds under the Every Student Succeeds Act (ESSA) to truly supplement funding for schools serving more low-income families.

“A district could easily be in compliance with this interpretation of the law while allocating fewer state and local dollars to every single Title I school in the district and using the federal Title I funds to fill that hole so long as the district gave any reason for doing so that doesn’t explicitly mention Title I.” the Education Trust wrote in a letter to DeVos. State officials, however, were pushing for this type of flexibility, and the Council of Chief State School Officers issued its own proposal with a Title I neutral approach. 

That districts will now have to articulate their "allocation methodology” is good, said Marguerite Roza, a research professor and director of the Edunomics Lab at Georgetown University in Washington. 

"District leaders and school board members often don’t recognize the enormity of their role in deciding how to divvy up the country’s $650 billion public education budget," she said. "Many may not have ever articulated an approach to apportioning their public funds across schools, or even thought through the range of options. Hopefully this requirement will prompt them to explore whether their budgets reflect an intentional strategy, habit or something else."

She also noted in a February article for the Brookings Institution that there are additional ways to spot funding disparities between schools, namely ESSA’s requirement that local education agencies publicly report per-pupil spending on annual report cards issued for each school. 

Raegan Miller, a research advisor for FutureEd, a think tank at Georgetown, agreed that the guidance may "increase demand in communities for more and better information about how districts allocate resources to schools."