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Education Funding for K-12 Schools

Most education funding for schools comes from local, state, and federal programs. In total, funding for public and charter schools neared $800 billion for the 2019-2020 school year. It may come as a surprise that over 90% of education funding comes from state and local governments. However, each source of funding plays a critical role in funding PreK-12 public and charter schools.

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How are K-12 public and charter schools funded?

The U.S. Department of Education supports K-12 education with grant programs under various legislation, most notable the Every Student Succeeds Act (ESSA). There are three kinds of federal grants: discretionary grants, student loans, and formula grants. All of these allocate funding to state and local education agencies. Here’s a breakdown of funding by state for the fiscal years 2022-2024. The U.S. DOE has plenty of information about these types of funding, specifically their eligibility and applications. 

Federal dollars can also be used to supplement state funding to help narrow achievement gaps for at-risk students. In addition, there are grants and programs funded at the state and local levels, as well as public-private partnerships to underwrite education funding and help address historical inequities in education.

While federal funding has held steady over the decades, local funding has reduced and state funding has increased. Education funding from government sources can be affected by major events like economic recessions or changes in government leadership and legislation. While these events are disruptive, they can also push education agencies to find innovative new sources of education funding and bring positive change to schools everywhere.

Types of Education Funding

ESSA (formerly ESEA)

The Elementary and Secondary Education Act (ESEA) was enacted in 1965 to ensure equal access and opportunity for all students. It has been reauthorized several times, most recently in 2015 as the Every Student Succeeds Act (ESSA). ESSA maintains many of the tenants of ESEA, but with a major shift of power and responsibility back to the states. While it’s an expansive, complex piece of legislation, the main purpose is simple: to provide a quality education for all kids.

There are eight Titles in ESSA that outline the different types of funding. The first four are highlighted below.

Title I funds make up the largest federal aid package for American schools and are allocated through four main grants. It’s goal is to help schools close academic achievement gaps by ensuring all students receive a fair, equitable, and high-quality education. Schools serving 40% or more low-income students are eligible to use Title I funds to operate school-wide programs to raise academic achievement; less than 40% require targeted assistance programs for eligible students. Parts A-F of Title I policy detail funding stipulations for various student populations and directives for use of funds.

Part A: Improving Basic Programs Operated by LEAs

Part A provides financial assistance to Local Education Agencies (LEAs) and schools with high percentages of children from low-income families to help ensure that all children meet challenging academic standards. Part A funding can be used to support supplemental instruction, extended learning programs, instructional materials, equipment, technology, and professional development to reinforce the regular school curriculum and raise academic achievement.

How Discovery Education Aligns:

Title II is to designed to improve the quality, quantity, and effectiveness of educators and leaders, and provide low-income and minority students greater access to effective educators. Ultimately, the goal is to increase student achievement of academic standards by ensuring equitable access to effective teachers, especially for underrepresented groups.. Title II funds are awarded to SEAs based on a formula that compares the number of school-aged children in the state and the percentage that are from low-income families. SEAs then allocate the funds to LEAs based on need. 

Part A: Supporting Effective Instruction

Part A focuses on the recruitment and retention of high-quality teachers and principals to ensure effective instruction. Funding can be used for certification and licensing programs, tenure and evaluation systems, and professional learning that ensure teachers and principals have the necessary knowledge, teaching, and leadership skills to be highly effective educators. 

How Discovery Education Aligns:

  • Provide educators with embedded professional learning support within our PreK-12 learning platform, including microlearnings, on-demand videos, and resources to help with a wide variety of teacher needs, including instructional strategies, timely topics, and more.

  • Offer customized professional learning services, whether in person, hybrid, virtual, or on-demand, that support the unique needs of each school and district throughout the entire adoption of Discovery Education. 

  • Empower teachers through the Discovery Educator Network (DEN), a place where educators can connect and collaborate with each other to share best practices, find professional learning opportunities, and more. 

Title III is designed to improve the education of English Language Learners (ELLs) and immigrants by helping them acquire the English language and meet state academic achievement standards. Funds are distributed to states who apply for grants under ESSA, based on a formula that accounts for the number of ELL and immigrant children in the state. States then allocate funds to LEAs based on the number of immigrant and ELL students in each district.

Part A: English Language Acquisition, Language Enhancement, and Academic Achievement

Part A outlines how the funds can be used, including language programs, professional learning, materials and technology, and family/community involvement in language programs.

How Discovery Education Aligns:

Title IV is designed to help create community learning centers that offer academic enrichment opportunities during non-school hours, particularly in high-poverty areas. The range of activities helps participating students meet academic standards and enrich their learning experiences, as well as extend educational services to their families. To use Title IV funds, states submit a plan outlining how they will use funds for state-level activities, as well as how they will allocate the funds to LEAs. States and LEAs must outline how they will review and monitor the resources and activities provided with funding, as well as technical assistance.

Part A: Student Support and Academic Enrichment Grant

Part A provides funding to ensure all students have access to a well-rounded education, especially underrepresented groups, school conditions are optimal for learning, and technology is being used effectively to improve academic achievement and digital literacy. There are many subparts to this section of Title IV that go into detail about the types of programs and support for which these funds can be used.

How Discovery Education Aligns:

Part B: 21st Century Community Learning Centers

Part B supports the creation of opportunities for academic enrichment during non-school hours and a rigorous student-centered 21st century classroom environment for children, particularly students who attend high-poverty and/or low-performing schools.

How Discovery Education Aligns:

  • Creates a rigorous student-centered 21st-century classroom environment that seamlessly blends digital media and available instructional technologies to maximize learning for all students.

  • Offers a variety of powerful resources designed to fuel a cultural shift in STEM teaching and learning, including enhancing core curriculum with STEM Connect, Coding resources, career profiles, and engaging hands-on, real-world learning activities.

  • Social Impact partner programs with real-world application and learning experiences focused on financial literacy, Career and Technical Education, STEM, cybersecurity, coding, and more.

What are Evidence-Based Tiers? 

The Every Student Succeeds Act defines evidence-based as an activity, strategy, or intervention that demonstrates a statistically significant effect on improving student outcomes or other relevant outcomes based on four tiers. The standards outlined in each tier are designed to ensure that states and districts can identify programs and solutions that work across various populations of students. In other words, they ensure that federal funds are used to purchase programs and solutions that truly make an impact. There are many resources available, like Evidence for ESSA and The Institute of Education Sciences, that help education leaders find programs that meet the rigorous evidence-based standards. 

The Four Tiers of Evidence-Based Standards
Tier 1
Strong evidence from at least one well-designed and well-implemented experimental study.
Tier 2
Moderate evidence from at least one well-designed and well-implemented quasi-experimental study.
Tier 3
Promising evidence from at least one well-designed and well-implemented correlational study with statistical controls for selection bias.
Tier 4
Demonstrates a rationale based on high-quality research findings or positive evaluation that such activity, strategy, or intervention is likely to improve student outcomes.

Discovery Education is committed to facilitating deep and sustained learning with research-based products and services. We regularly verify their efficacy across a variety of educational settings, programs, and contexts, ensuring they meet rigorous evidence-based standards defined in ESSA.

IDEA and Part B Grants

The Individuals with Disabilities Education Act (IDEA) funds early intervention services, instruction, materials, technology, professional development and family/ community engagement programs. All students receiving support must have an IEP. 

IDEA funds are provided to states that agree to offer students with disabilities a free and public education (FAPE) between the ages of 3 and 21. FAPE includes specially designed instruction that meets the needs of every eligible child, provided at no cost to the parents. To receive funding, school districts must identify, locate, and evaluate all children with disabilities to determine which children are eligible for special education services and prepare IEPs for qualified students.

Parts A through D outline provisions for helping children of different age levels, but Part B is the largest part of the IDEA, as it details funding conditions for school-age children with disabilities. Under Part B of IDEA, children and youth (ages 3-21) receive special education and related services, including Pre-K programming and post-graduation support, through grants awarded to states. Part B grants are allocated using a variety of formulas based on eligible students and other factors.

How Discovery Education Aligns:

  • High-quality, multimodal content including videos, images, audiobooks, poetry, podcasts, songs, interactive activities, and reading passages to help present information in a variety of ways.

  • Presents content in a wide variety of modalities and supports such as closed captioning, Lexile levels, speech-to-text, transcripts for videos, and authentic translations to engage learners with diverse and special learning challenges.

  • Educator Supports with on-demand professional learning and instructional strategies to effectively differentiate and personalize learning for students.

Perkins Career and Technical Education Act

Vocational education has always been a tenet of the American education system, starting in 1917 with the Smith-Hughes Act. Fast forward to 1984 and The Carl Perkins Vocational Education Act was signed into law to expand career and technical education (CTE) to prepare students for the workforce.

The Perkins Act was reauthorized several times, with the latest in 2018 as The Strengthening Career and Technical Education for the 21st Century Act. Today it provides nearly $1.5 billion to support career and technical education programs, including integrated career pathways programs, CTE excursions for students, and hiring staff to support these programs. It also aims to improve the quality and access of CTE for underrepresented and underserved students and aligns CTE programs with regional economic development.

Just like ESSA, states develop implementation plans to address their specific CTE program needs and expenses. Each year, Congress appropriates roughly $1.4 billion in state formula grants and over $30 million in competitive discretionary grants. States and other eligible education agencies must submit a plan to apply for these grants, which can then be allocated to institutions that offer a CTE program. The Perkins Collaborative Resource Network provides very helpful information about this type of funding, as well as access to state implementation plans, enrollment data, and performance data

How Discovery Education Aligns:

  • Provide high-quality content resources to support CTE curriculum, programs, and extended learning opportunities, including career profiles, Virtual Field Trips, interviews with industry leaders, and more.

  • Offer learning resources and opportunities that cater to a diverse group of students, especially those in underserved and underrepresented groups to help bring diversity to the workforce.

  • Partnership with industry, private sector, and state departments of education to deliver CTE programs that are accessible to all students and cater to regional economic needs and opportunities.

Elementary and Secondary School Relief (ESSER) Funds

The Elementary and Secondary School Emergency Relief Fund, otherwise known as ESSER, is a federal program that the Department of Education created in response to the COVID-19 pandemic. The main purpose of these funds was to address pandemic-related issues, such as mental health, re-opening schools safely, and addressing learning loss.

Even though the emergency nature of the pandemic is over, there is still a large pot of money available to be spent. Here’s a quick breakdown of the remaining funds as of Spring 2023 and their respective deadlines:

How much has been spent?
How much is left to spend?
$18 billion by Jan 31, 2024
$88 billion by Jan 31, 2025
By when does it need to be allocated?
Sept 30, 2023
Sept 30, 2024

ESSER funding information by state.

You can view a breakdown of expenditures by state, district, and each component of ESSER funds using the Education Stabilization Fund Transparency Portal provided by the U.S. Department of Education. Georgetown University’s Edunomics Lab also created an ESSER Expenditure Dashboard to track the spending data released by various states and districts. At the current pace of spending, districts are on track to spend down ESSER funds by their respective deadlines.

How to make the most out of ESSER funds by the deadline.

Yes, ESSER funds are winding down, which means districts need to prepare for a fiscal cliff over the next year and a half. How well they prepare for this fall will determine how much it impacts students and teachers. How can a state or district determine the effects of this cliff? They should note these factors:

  • 1

    The ratio of federal relief funds to overall education spending.

  • 2

    The percentage of students in high-poverty districts.

  • 3

    The proportion of districts with high percentages of students in poverty.

  • 4

    If ESSER funds were used for recurring costs such as salary increases or new hires.

To help brace for the 2024 fiscal cliff, there are actions that states and districts can take to help soften the fall.

  • 1

    Find ways to carry over state and local funds from one year to the next.

  • 2

    Evaluate the long-term ROI of these one-time funds. Will they offset future costs?

  • 3

    Create an accountability plan to better align student outcomes with budgets.

  • 4

    Identify budget gaps and evaluate realistic options to close those gaps.

No matter what, next year won’t be easy for anyone. Although the U.S. Department of Education has shared recommendations for how to use these funds, every school’s needs are unique. Some districts are strengthening their Career and Technical Education programs, while others offer tutoring sessions or build a more robust science program

States and districts should consider many factors in deciding how to make it past 2024, starting with an innovative approach to budgeting and focusing on student impact. If an ESSER investment isn’t impacting learning, then it can’t be justified. And the way to prove an investment is making an impact is to track its performance, its per-student cost, and the risks involved. Check out this helpful budgeting tool developed by Georgetown University’s Edunomics to assess investments and their impact. 

Make a Lasting Impact with Sustainable ESSER Investments

State and Local Funding

How does education funding work at the state level?

Approximately 48 percent of a school’s budget comes from state resources, including income taxes, sales tax, and fees. There are other education funding opportunities at the state level, many of which are from government programs and grants from businesses and organizations. 

Nearly all states allocate education funds through foundation program formulas. These usually require a minimum level of funding per student to ensure equitable distribution. States consider characteristics that can affect a student’s access to obtain a quality education, such as low-income or disability status, when allocating funds. Therefore, it’s correct to assume that state funding is higher in school districts with a larger concentration of these underserved students.

How does education funding work at the local level?

Districts have opportunities to leverage funds from local sources, like local property taxes or fundraising opportunities. In fact, about 44 percent of a school’s budget is contributed locally. Traditionally, districts would allocate local funds to use for personnel, equipment, and resources, then retroactively determine the cost per student. Now, districts are moving toward a model that prioritizes individual school budgets and student-based allocation. Many consider this to be a more equitable, and transparent, model.  

Districts, and even schools, also have the opportunity to apply for a variety of grants, including these 12 notable grants that help fill gaps left behind by limited school budgets.  

Strategic & Public-Private Partnerships

An innovative source of funding is the formation of partnerships between education departments, the private sector, and EdTech providers like Discovery Education to help underwrite education costs at the state and district levels. These long-term agreements help education leaders focus on specific education initiatives, like early learning, literacy, and career and technical education, and increase access to quality education for underserved communities and underrepresented student groups.

One example of this type of partnership is the multi-year agreement between the Delaware Department of Education, Dupont, and Discovery Education. This partnership greatly increases access to STEM and CTE teaching and learning resources developed by Dupont and Discovery Education to schools across the state. It also gives the state department of education a chance to bridge STEM and CTE learning with state-specific career opportunities. 

Learn more about Discovery Education’s strategic and statewide partnerships that support education funding for a wide variety of initiatives. 

Another form of strategic partnership is that between public and private sectors. Discovery Education has become a leader in this type of partnership, serving as the conduit between leading organizations who want to make an impact on today’s youth and their learning environments. These partnerships ensure equitable access to quality education and address critical topics impacting today’s classrooms, communities, and the workforce. 

In these types of partnerships, private sector organizations collaborate with companies like Discovery Education to deliver public-facing resources that focus on critical areas like workforce readiness, sustainability, and student wellbeing. The public-private partnership can also serve as the underwriter for bringing digital learning resources into classrooms. 

Learn more about Discovery Education’s Social Impact Partnerships that support initiatives to close learning and access gaps and help prepare future-ready students. 

There’s no one secret weapon, formula, or silver bullet that can solve the complex challenges of education funding. But there is a common understanding that budgets are one thing that cannot, and must not, be put on auto-pilot. Education funding for K-12 public and charter schools is a deeply complicated topic, but with a simple purpose: to deliver a quality education to all students, no matter who or where they are. That’s why education funding must be viewed through a lens of innovation, and be able to evolve with, not against, changes in technology, academia, culture, and workforce demands, to better prepare students for tomorrow.