The Heritage Foundation

Backgrounder #1364 on Education

April 28, 2000

April 28, 2000 | Backgrounder on Education

How the Senate Can Improve ESEA

The Senate will soon consider the reauthorization of the Elementary and Secondary Education Act (ESEA). Enacted in 1965 under President Lyndon B. Johnson, ESEA is the centerpiece of the federal government's involvement in K-12 public education. ESEA's chief program is Title I, Aid to Disadvantaged Students, which consumes 75 percent of ESEA funds and regulations. The program's goal is to close the achievement gap between rich and poor students.

Over its 35-year history, the 32-page ESEA has evolved into a massive volume containing more than 1,000 pages on over 60 programs, which range from basic aid for school districts to programs promoting gender equity, school safety, and technology. All told, ESEA includes almost $14 billion per year in budget authority.

ESEA funding comprises only a portion of the total dollars spent on education, yet this money carries with it a plethora of red tape and the Washington-knows-best mentality. Some of ESEA's mandates explicitly stand in the way of creative state and local reforms; others force state and local officials to be more concerned with paperwork than with performance. ESEA has gone through seven reauthorization cycles since its inception, yet its chief beneficiaries, America's poor students, continue to lag behind their peers by as much as 20 percentage points on academic achievement tests. In some districts, the gap in achievement between rich and poor children has widened over the years. President Johnson's goal of saving poor students from educational mediocrity may be very much alive, but the program he created is clearly failing to achieve this goal.

Despite President Bill Clinton's calls for more accountability in education, the weary but heavy hands of the federal education establishment maintain a tight grip on the system, content with the status quo.

So far, Congress has done slightly better. Two significant amendments to the ESEA authorizing legislation--Title I portability and "Straight A's" (Academic Achievement for All)--were recently approved by the Senate's Health, Education, Labor, and Pensions (HELP) Committee, albeit by narrow margins. If enacted, they would break new ground by offering some states significant options to innovate beyond the limits of the existing ESEA program.

Under the approved Title I portability plan, for example, 10 states and 20 school districts in other states could strap Title I dollars to the backs of their low-income students, allowing them to carry that money to a better performing public school, a private tutoring service, or an after-school program of choice. Under the approved Straight A's plan, 15 states and an unlimited number of school districts could spend federal dollars on reforms of their choice so long as they boost the academic achievement of all their students, especially low-income children.

It is important to note, however, that neither of these approaches will change the basic architecture of ESEA. When the ESEA reauthorization bill reaches the Senate floor this year, members will have an opportunity to strengthen the program with provisions that would lay the foundation for innovative reforms in the future. Such reforms should give all states the flexibility and the incentive to find creative ways to boost results, just as Congress did in its historic reform of the welfare system.

The full Senate should consider at least three important improvements in ESEA:

  1. Make Title I a child-centered program.
    The committee-approved bill would allow only a limited number of interested states and localities to attach Title I funding to poor students. Instead of being merely an option for some states or districts, portability should be a nationwide entitlement for disadvantaged students, similar to the Pell Grant program.

  2. Allow any state to opt for Straight A's.
    The committee-approved bill allows only 15 states to apply for this bold slashing of federal restrictions in return for guaranteed gains in student achievement. The option should be available to every state that wants it.

  3. Eliminate duplicative programs in ESEA and focus the law on a few key national goals.
    Since the HELP Committee failed to make substantive changes in the underlying ESEA, the Senate should restructure ESEA's programs to emphasize a few important objectives. Legislation already has been introduced by Senators Joseph Lieberman (D-CT) and Evan Bayh (D-IN) to accomplish this. Unfortunately, while this plan consolidates and streamlines many programs, it also leaves numerous strings in place and adds red tape. A better approach would be to craft a refined (and deregulated) version of the Lieberman-Bayh plan.

In the end, the goal should be an ESEA plan that respects state and local rights but also empowers parents, especially low-income parents. The plan now before the Senate takes a few small steps in this direction. Long strides are needed.

WHAT'S WRONG WITH ESEA

The 1965 Elementary and Secondary Education Act (ESEA), the centerpiece of the federal government's involvement in K-12 education, was created primarily to close the achievement gap between rich and poor students. Today, it involves over 1,000 pages on more than 60 programs with almost $14 billion in budget authority. (See Table 1.) Even though federal funds comprise only 7 percent of America's public school revenues, some of the mandates in ESEA explicitly prevent state implementation of creative reform; others are focused more on paperwork than on performance.2 For example:

  • In Arizona, approximately 45 percent of the state's education personnel oversee the administration of federal dollars.

  • In Florida, the number of people required to administer a federal education dollar is six times greater than the number needed to administer one state dollar.

  • In Georgia, nearly 30 percent of the state's education employees work full-time to administer the federal programs,3

Most ESEA funds arrive in the states as grants to state education agencies (SEAs) or local education agencies (LEAs). Under this "grant-in-aid" process, federal dollars are allocated by formula or through a grant competition. Each categorical program has a specified purpose and target population. In return for the funds, states and localities must comply with regulations that include the general requirements for categorical programs (such as how the funds are to be administered or who is to be served); crosscutting rules for all federal grants (such as nondiscrimination); and requirements related to other legislation.4

In 1994, Congress added specific measures to the administration of ESEA's chief program, Title I Aid to Disadvantaged Students. Intended to demand the academic results that funding under the first three decades of this massive program failed to produce, the 1994 amendments--known as "standards-based reforms"--stipulated that states must develop and align three objectives by the beginning of the 2000-2001 school year: (1) challenging curriculum standards for learning; (2) a statewide assessment of knowledge keyed to these standards; and (3) rigorous performance standards for all students and schools.

Despite these changes and other changes in the law over the course of seven reauthorization cycles, however, poor students continue to lag behind their peers.

  • On the 1998 National Assessment of Educational Progress (NAEP) tests, poor students scored below their more affluent peers by 20 percentage points.

  • Only 42 percent of students in the highest poverty schools scored at or above NAEP's "Basic" level for reading, while 62 percent of students in all public schools met that standard.

  • Only 13 percent of low-income 4th graders attained NAEP's "Proficient" level, compared with 40 percent of higher income students.

The current ESEA approach explicitly prohibits Title I funds from following needy students to a school of choice. It clearly assumes that education bureaucrats, not parents, are the most qualified judges of how poor students should be educated. The law also prevents states from focusing their entire share of ESEA funds on their own unique education priorities. More important, ESEA lacks the rewards and sanctions needed to precipitate change at the state and local levels. Whether states fail or excel, they continue receiving their portion of ESEA funding.

THE ADMINISTRATION'S REMEDY

Instead of taking a page from the successful efforts at devolution that have taken place at the state level (or from Washington's own successful overhaul of the welfare system), the Clinton Administration has opted to stay the course, making only a few cosmetic changes in ESEA and a series of input-driven reforms.

A good example is the Administration's fixation on reducing class size by hiring new teachers and building additional schools. Though both efforts may be welcome in some places, they certainly are not needed everywhere in the country. The Clinton Administration's plan rests on the premise that Washington bureaucrats are more in tune with the needs of schools than are local school boards and community members.

The Administration wants to continue allocating funds to states and school districts on the condition that they will enact prescribed reforms. These stipulations are in stark contrast to an approach that gives states the flexibility to find innovative ways to raise student achievement and reward those schools that succeed in doing so. In any case, the Administration's "reforms" do little to boost academic achievement and thus will fail either to solve the nation's foremost education problems or to attain the long-time objectives of ESEA.

HOUSE ACTION: A STEP IN THE RIGHT DIRECTION

In the fall of 1999, the House reauthorized several key provisions of ESEA in H.R. 2, the Student Results Act, including Title I Aid to Disadvantaged Students and Title II Teacher Professional Development. The most significant component of H.R. 2 is a pilot provision known as Academic Achievement for All (or "Straight A's"), which offers 10 interested states or any school district the freedom to consolidate their federal ESEA funding and use it on the reform or reforms of their choice in exchange for boosting student achievement.

Specifically, the House-approved provision:

  1. Boosts Title I accountability but fails to empower needy students.
    The House plan increases the amount of accountability in the Title I program (see Appendix I) by, for instance, requiring states to provide detailed report cards on school performance. The House makes no substantial changes in the Title I program itself so that funding would follow poor students to the school of their choice (as Pell Grants now do) rather than to school systems. House lawmakers did enact a provision to allow students in failing Title I schools to attend a public school of choice, using Title I funding for transportation purposes, but this is a far cry from turning the program into a child-centered funding stream. Indeed, while Title I dollars may be used for transportation, they may not be used for education services in the new school.

  2. Dilutes the use of Title I funds even further.
    The House lowered the threshold for schools to use Title I funding on "schoolwide" programs. Today, schools in which Title I students comprise at least 50 percent of the student body may use these federal dollars for programs and activities affecting the entire school instead of focusing the dollars on individual students. Though such schoolwide programs are popular with local officials and principals, it is not clear that they are effective in reducing the achievement gap. As George Farkas, a social scientist at the University of Texas at Dallas, noted, schoolwide reforms "are often quite expensive to implement, and too often they are not effective."5 The U.S. Department of Education is conducting a study of the impact of schoolwide programs but has arranged the study so that the findings will not be available until 2001, long after the present reauthorization cycle is concluded. Before expanding the schoolwide approach, Congress should insist on evidence that it works.

  3. Increases funding and flexibility for states to hire and train teachers.
    By combining funding for Goals 2000, the White House class-size reduction initiative, and ESEA's Title II, the House bill increases funding for states to hire and train teachers. It also eliminates incentives in the existing Title II program to hire teachers certified by the National Board for Professional Teaching Standards (NBPTS), since no rigorous study points to the effectiveness of receiving such certification.6

  4. Incorporates a pilot Straight A's program.
    Perhaps the most significant reform passed by the House is a pilot that would give up to 10 states (and an unlimited number of school districts) maximum flexibility to use their share of federal funding on the reforms of their choice as long as they can show that their investments have raised academic achievement among low-income students. In effect, the Straight A's states would become giant charter schools. Like charter schools, they would be given considerable fiscal and legal autonomy in exchange for agreed-upon academic results. If they failed to adhere to the terms of their charters, they would have to shut down; if they succeeded, they would remain in business, likely attracting more students and funding. With Straight A's, ten states for the first time would have a choice between the existing regulated ESEA regime and a deregulated but more accountable alternative. The House pilot is a step in the right direction but contains two flaws.

  • The bill allows just 10 states to apply for this important new flexibility, constraining the pace of change in the status quo. Indeed, because the underlying ESEA is so heavy on rules and regulations--especially in Title I--40 states would have to continue complying with a dizzying array of federal requirements, some of which have little to do with academic achievement. To force 40 states to continue down a path laid out 35 years ago is folly.
  • A school district "hold harmless" provision under Title I places a significant constraint even on states that do participate in Straight A's by requiring them to use the existing formula to allocate Title I funds to every district that currently receives funding. Because most of the funding and regulations in Straight A's is part of Title I, this provision would be a considerable hindrance to a state's ability to innovate. If a state participates in Straight A's, it should have full fiscal autonomy to allocate all its ESEA dollars to the education strategies that it judges most promising as long as those strategies yield the desired academic outcomes.

The House Straight A's plan is a victory for serious education reform, but it is a partial and flawed one.

How Straight A's Would Work

States that participate in a Straight A's program would have full fiscal autonomy to allocate ESEA dollars to the education strategies they judge most promising as long as those programs yield the stipulated academic outcomes. If, for example, Florida decided to participate in Straight A's, it would select the formula-based K-12 program funding streams it wished to commingle. (Virtually all formula-based ESEA programs are eligible; see Table 2.) It would outline in a contract with the Secretary of Education how it planned to spend this money and the target test results it hoped to achieve to decrease the achievement gap between rich and poor students. Florida would then send the U.S. Secretary of Education baseline data to show the current academic levels of its students, disaggregated by socioeconomic background.

Next, the U.S. Department of Education would send Florida a single check for $695,209,131 (see Table 3) and a contract stipulating the academic gains Florida promised to attain, and indeed must achieve. If Florida achieved these results, Washington would provide a cash bonus. If it failed to do so, its Straight A's flexibility in programming would be terminated. (Under egregious circumstances, states or local districts should also incur fiscal sanctions, though the current Straight A's plan would cut back only on administrative overhead.)


SENATE HELP COMMITTEE ACTION: TWO STEPS IN THE RIGHT DIRECTION

Now the full Senate will consider S. 2 to reauthorize ESEA. The bill voted out of the HELP Committee contains excellent amendments; but even with those improvements, ESEA would retain the same basic structure that President Johnson instituted in 1965. Thus, the committee bill is essentially a status quo measure to which a few worthy provisions have been added.

The Good

The Senate bill offers several improvements over current law. Specifically, it:

  • Expands the number of Straight A's demonstration projects.
    S. 2 would allow 15 states (compared with 10 in the House bill) and an unlimited number of school districts to enter into a contractual agreement with the U.S. Secretary of Education to boost the academic achievement of their students in exchange for considerable flexibility and freedom from red tape in spending ESEA funds.

  • Provides Title I portability.
    As reported out by the HELP Committee, the bill allows 10 states and 20 localities in other states the option of making Title I a child-centered plan. Current law explicitly prohibits Title I funds from following needy students to a school of choice. Under the HELP Committee portability plan, a parent who is not satisfied with the quality of service in a Title I school would have a chance to take the child and his or her Title I per-pupil allocation to a better public school or to a private remedial education provider, so long as the funding is used to boost the child's educational attainment. (The funding could not, however, be used for tuition at regular private schools.) (See Appendix I)

  • Increases funding and flexibility for states to hire and train teachers.
    Like H.R.2, S. 2 contains a measure designed to offer states additional funding and flexibility to recruit and train teachers, with a focus on districts that have a high proportion of poor students. The measure would consolidate funding in Title II (the Eisenhower Math and Science Program) and the President's class-size reduction funding.

The Bad

Despite these good features, S. 2 has significant flaws. Specifically, it includes:

  • More Funding for Title I without meaningful changes in the underlying program.
    The committee-approved bill would increase funding for Title I, as if the level of spending were the measure of lawmakers' commitment to America's children. This race to add dollars to failed or even ineffective programs ignores the fact that the key to improving education is not how much money is spent, but the results it buys. After 35 years, it is clear that Title I in its present form yields too few results. As historian Maris Vinovskis notes, "the problem is not the limited amount of federal money available for assisting disadvantaged students, but spending the existing monies wisely."7 Since 1965, over $125 billion has been spent on Title I, yet the program has failed to achieve its only goal: closing the achievement gap between rich and poor students. Spending more on a failed program is throwing good money after bad.

  • Limited portability for low-income students.
    Under the committee-approved bill, only 10 states and 20 school districts in other states would be allowed to attach Title I funding to poor students so they could seek remedial education at a better public or private provider of choice. Instead of making this choice an education right for any poor child and turning Title I into a Pell Grant-like program, Senate lawmakers would embrace a timid approach that delays much-needed change in the education of all low-income students. The only way to ensure that Title I serves the needs of poor students is to insist that every state be able to attach its Title I funding to its low-income students. This option would allow the funding to move with students to a school of choice--and state laws would determine the extent of the portability.

  • Dilutes the use of Title I funds even further.
    Like the House bill, an amendment ratified by the HELP Committee would lower the threshold for schools to use Title I funding on "schoolwide" programs to 40 percent, even though Congress lacks any scientific evidence that schoolwide programs work.

  • Allows only limited Straight A's experimentation.
    Like the House bill, the Straight A's package in the Senate bill is merely a pilot program with Title I dollars "held harmless." Only 15 states, not all 50, could apply for the flexibility. In addition, participating states would not have full control to channel their Title I funding to where they think the money is most needed; rather, they would have to assure that most of the funding reached school districts currently serving under the Title I formula.

  • Contains a "faux" flexibility package.
    The Senate bill would allow any interested state to sign a "performance partnership" with Washington that swaps flexibility in the use of ESEA funds for improved academic achievement. Disguised as a flexibility plan, the performance partnerships are little more than window dressing. The plans may appear similar to Straight A's contracts, but in fact they differ in three crucial ways.

First, the "performance partnership" would keep the burdensome Title I formula intact. By omitting flexibility with respect to Title I dollars, the partnership would do little to encourage serious reform. Title I comprises three-fourths of the ESEA budget and accounts for most of the red tape, particularly with respect to where the money must be spent, because of its 35-year-old preoccupation with dollar distribution formulas and the lack of attention to academic achievement. By keeping troublesome strings tied to Title I funds, the performance partnership plan would seriously limit the ability of states to use federal funding to implement their own reforms. School districts would not be able to use Title I dollars for some of the most promising reform mechanisms for disadvantaged students, such as starting charter schools or investing in teacher training.

Second, it would restrict state flexibility further by broadening the U.S. Department of Education's role in defining, maintaining, and concluding a state's partnership agreement with Washington. This would give the Secretary of Education unprecedented power in an area that traditionally has been the responsibility of states and localities. Empowering Washington bureaucrats to monitor state efforts to reform schools is akin to placing the fox in charge of the henhouse. It will discourage innovative states from even applying for flexibility.

Finally, it would limit flexibility while augmenting accountability. The success of welfare reform and charter schools rests on a delicate balance between flexibility and accountability. With welfare, states were given control over their federal dollars and held responsible for reducing dependency. States with strong charter laws fully entrust their charter school principals with the day-to-day operation of their schools but hold them accountable for results. The Senate "performance partnership" provision tips this delicate balance in favor of accountability, thus violating the old maxim that one cannot be expected to exercise responsibility without authority.

Improving the Senate's ESEA Bill

The Senate has the opportunity to steer ESEA reform in the right direction by making the program more accountable and child-centered. The underlying ESEA package should empower poor parents instead of school systems, and should eliminate duplicative and ineffective programs while allowing every state the option of becoming a charter state.

To this end, the Senate should consider the following options:

  1. Make Title I a true child-centered program in exchange for raising the Title I authorization level.
    Instead of making portability an option for 10 states and 20 school districts and diluting Title I funding by encouraging more "schoolwide" programs, policymakers should make Title I funding portability an education right for low-income students. Title I should be turned into a Pell Grant-like program. All poor children should be entitled to receive their share of federal dollars and take them to a school of choice (to the extent that choice is permitted by state laws and constitutions). In other words, federal dollars should be as portable as a state allows its own dollars to be.

  2. Strengthen the Straight A's provision by lifting the cap on the number of states that can apply to become Straight A's states and removing any restrictions on how they spend their Title I dollars. This means also scrapping the "performance partnership" proposal, since the partnerships will do little to bring about change and are confusing.

  3. Eliminate duplicative programs in ESEA and focus the law on a few key national goals.
    Since substantive changes in the underlying ESEA programs are not proposed in the reauthorization bill, Congress should try to restructure its programs and focus them on achieving a few key national goals. Legislation has been introduced by Senators Joseph Lieberman (D-CT) and Evan Bayh (D-IN) to accomplish this. Their Public Education Reinvestment, Reinvention, and Responsibility Act--known as the "3 R's"--focuses, for example, on the following goals: (1) closing the achievement gap between rich and poor students; (2) raising teacher quality; (3) helping limited English proficient (LEP) students learn English; (4) promoting public school choice; (5) encouraging innovative strategies; and (6) promoting accountability.

Unfortunately, however, although the Lieberman-Bayh plan would streamline many programs, it also would leave numerous strings in place and add new requirements that would further burden states and school districts. Their proposal could be improved by:

  • Eliminating the strings placed on states. The spirit behind the Lieberman-Bayh plan is to exchange flexibility for results. To this end, it should fully empower states or districts to produce those results. This means eliminating requirements about where dollars must go and how they must be spent.

  • Allocating the Title I Aid to Disadvantaged Students funding stream to children. The Lieberman-Bayh bill adds myriad requirements for states to target funding to schools with a high percentage of low-income students. This provision, however, ignores parents and the market-based forces needed to help speed the pace of change. In effect, it continues to leave reform in the hands of district and state officials. The best way to reform Title I is through the aforementioned portability plan: by attaching the dollars to poor students and allowing their parents the freedom to choose their school (or other education provider).

  • Removing its class-size reduction mandate. The Lieberman-Bayh bill would allocate federal dollars to reduce class size by hiring more teachers, even though the evidence to date is extremely shaky as to whether this expensive reform would help solve education problems in America's schools. States should be given the option to use those resources for other reforms that they judge more urgent or promising.

  • Eliminating the emphasis on professional development and National Board certification. The Lieberman-Bayh plan continues to expect that existing professional development programs produce better quality teachers. There is no evidence that certified teachers or National Board-certified teachers achieve better results in the classroom.8

CONCLUSION

The Senate has an historic opportunity to modernize the 35-year-old ESEA, a massive hulk of federal programming and funding. This can be accomplished only by enacting critical reforms that empower parents and give interested states and school districts the flexibility to implement innovative and measurable ways to serve disadvantaged children. The latter approach is the only way for Washington to see whether its highly regulated programs are indeed the right solutions.

When the Senate considers the reauthorization of ESEA, it can assure that these goals can be achieved by strengthening the Straight A's provision, expanding Title I portability, and restructuring the remaining components of ESEA to focus on real results. Congress should fight for real policy changes instead of empty symbolism that reinforces the status quo. Education is a top priority for American families. They deserve more from Washington than throwing more money into programs that are not working.

Nina Shokraii Rees is a former Senior Policy Analyst in Education and Jennifer Garrett is a Research Assistant in Domestic Policy Studies at The Heritage Foundation.

 

Appendix I


1. The authors thank Kirk Johnson, Policy Analyst in the Center for Data Analysis, for assembling the tables in this paper.

2. Nina Shokraii Rees and Jacqueline Curnutte, "Accountability 101: Why the President's Education Proposals Won't Make the Grade," Heritage Foundation Backgrounder No. 1286, May 28, 1999.

3. Ibid.

4. Ibid.

5. George Farkas and L. Shane Hall, "Can Title I Attain Its Goal?" draft prepared for presentation at Brookings Institution conference on reauthorization of the Elementary and Secondary Education Act, Washington, D.C., May 1999.

6. Danielle D. Wilcox, "The National Board for Professional Teaching Standards: Can It Live Up to Its Promise?" in Marci Kanstoroom and Chester E. Finn, Jr., eds., Better Teachers, Better Schools, Thomas B. Fordham Foundation and the Education Leaders Council, July 1999.

7. Maris A. Vinovskis, "Do Federal Compensatory Education Programs Really Work? A Brief Historical Analysis of Title I and Head Start," American Journal of Education, Vol. 107, No. 3 (May 1999).

8. See, for instance, Kanstoroom and Finn, Better Teachers, Better Schools.

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