Federal Education Funding, Explained

When working in the K-12 education market you’ll hear a lot of talk about federal education funding. It’s a big deal for any business that wants to effectively sell to schools. But what does federal education funding really mean, and how does the funding process work? How much do schools receive? Are there limitations on how this funding can be used? The complexity of federal funding can make the mind spin, and newcomers to the education market may not know how to make sense of it all.

This FAQ will give you a basic understanding of how the federal education funding process works and provide answers to common questions. You’ll also discover some helpful tips about how to target the right districts and reach the right decision-makers. 

Why does the federal government provide education funding?

Within the Constitution, the responsibility of education resides with the states. But because there is a pressing national interest to provide high-quality education for our youth, the federal government has historically provided funds to supplement state and district budgets. It is important to note that the goal of federal funding is to supplement — not supplant — state and local funds.

Where does school funding come from?

A great deal of attention is placed on federal education funding, and for good reason — in the Fiscal Year 2018 budget, the federal government contributed around $71 billion to K-12 education. Yet federal funds only comprise a small percentage of school and district education budgets. Schools are predominately funded by local and state resources. According to Census Bureau data and the Center on Budget and Policy Priorities (CBPP), 2015 federal contributions only accounted for roughly eight percent of school budgets nationwide. (States contributed 46 percent and local revenue contributed 45 percent.)

What types of federal education funding are available?

Broadly speaking, federal education dollars are provided to districts through grants and programs. The biggest for elementary and secondary education include:

  • Title I: Support for the economically disadvantaged
  • The Individuals with Disabilities Education Act (IDEA): Support for special education services
  • Head Start: Support for early education programs
  • Title II: Support for professional development for educators
  • Title III: Support for English language learners
  • Title IV: Student support and academic achievement

Many of these federal funds are earmarked for specific groups of students, including students from low-income families, English language learners, and students with disabilities.

How do federal education funds flow into schools?

Understanding how federal funds flow into schools can influence and guide your sales and marketing strategies. The funding process is different in each state, due to factors such as state legislation, application procedures, mandates, and distribution policies.

The graphic below illustrates the general process of how federal education funds are distributed to schools, using Title I as an example.

How Title I Funds are Distributed

 How much federal money is awarded to each school?

Federal funding programs use a variety of formulas to determine how much each school receives. For example, Title I funds are distributed based on four formulas that utilize low-income Census data. As another example, IDEA funds are allocated based on formulas that account for the number of students with disabilities a district serves.

Leverage federal education funding data to improve your targeting

Now that you have a basic understanding of federal education funding, you can use this knowledge to improve how you target your sales and marketing efforts to potential customers. For example, you may decide to go after schools and districts that receive high Title I funding. But combing through Census records, school-by-school or district-by-district, is a tedious task and an inefficient use of your time and resources.

Agile Education Marketing captures funding information, including Title I, Title II and IDEA, from every district in the nation. Using this data, combined with other demographic information like district size and school performance (also collected by Agile), you can zero in on the target audience that best matches your product and selling strategy. Contact Agile to learn how to improve your targeting by leveraging federal education funding data.


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About the Author

Verlan Stephens is a Founder and Managing Partner at Agile Education Marketing with more than 30 years of experience compiling, managing and analyzing large information databases. He applies that knowledge and skill to lead Agile’s data compilation efforts. He also provides expertise in data trending and market intelligence. Verlan is passionate about helping companies use data to better understand the education market and make research-based decisions around product and business development in the education space. Reach Verlan at vstephens@agile-ed.com.


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