The Rural Education Achievement Program (REAP) is authorized by Part B of Title V of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act (ESSA, P.L. 114-95 ) in 2015. Congress created this program to address the unique needs of rural schools that disadvantage them relative to non-rural schools. To compensate for the challenges facing rural schools, REAP awards two types of formula grants. The Small, Rural School Achievement (SRSA) program provides funds to rural local educational agencies (LEAs) that serve small numbers of students. The Rural and Low-Income School (RLIS) program provides funds to rural LEAs that serve high concentrations of low-income students, regardless of the LEA's size. Funds appropriated for REAP are divided equally between the SRSA and RLIS programs. The ESSA reauthorization of the REAP statute made major changes to the program by 1. updating the locale codes used for determining the eligibility of LEAs, 2. clarifying that LEAs within educational service agencies are to be considered for SRSA eligibility, 3. extending to RLIS the alternative state certification option for meeting the rural criterion that already existed for SRSA, and 4. giving LEAs the option to choose which program to receive funds under if eligible for both SRSA and RLIS. This report discusses the challenges facing rural schools and the manner in which REAP attempts to address these challenges. According to their proponents, rural schools have some advantages over their urban and suburban counterparts. Rural teachers are key members of the community and tend to know students and their families well. Rural schools often have less complex organizational structures with fewer layers than non-rural school systems, and they may be able to adjust or adapt relatively quickly to change. Additionally, the schools within rural communities are very visible and strongly connected with the community. However, rural schools also confront significant challenges. Many face fiscal limitations due to tax base constraints. Resource shortages contribute to various perceived problems, including a limited range of curricular options (such as a lack of advanced placement course offerings) and difficulties providing competitive salaries to attract and retain highly qualified teachers. Rural schools tend to have declining enrollment due to net out-migration and aging of the population. Rural schools' low population density can result in other problems, such as high transportation costs and limited access to cultural and educational resources. In addition to these general challenges, rural school districts may face particular problems meeting ESEA requirements related to academic accountability and teacher quality. While ESSA provided greater funding use flexibility, rural districts may find it difficult to implement ESEA's requirements for schools identified as in need of improvement (such as providing public school choice). Rural districts may also face difficulty in meeting the ESEA requirement that students receive instruction in the core academic subjects from teachers who are fully certified by the state and have demonstrated competency in the subjects they teach. Additionally, where ESEA funds are concerned, rural LEAs may be at a relative disadvantage compared to non-rural LEAs in both seeking competitive awards and utilizing small formula grant amounts from varied programs. Congress created REAP to meet many of the challenges facing rural schools. According to the statute, the purpose of REAP is to address "the unique needs of rural school districts that frequently (1) lack the personnel and resources needed to compete effectively for Federal competitive grants; and (2) receive formula grant allocations in amounts too small to be effective in meeting their intended purposes." REAP authorizes two rural education programs under ESEA Title V-B. Subpart 1 authorizes the SRSA program, which focuses on LEAs with less than 600 students. Subpart 2 authorizes the RLIS program, which focuses on larger rural LEAs with relatively high poverty rates (at least 20% of children from families below the poverty line). Recipients of grants from these programs may use their funds to support a fairly broad set of educational programs and activities authorized by several ESEA programs. ESSA authorized REAP at $169,840,000 for the fiscal years 2017 through 2020, to be distributed equally between subparts 1 and 2. However, in the Consolidated Appropriations Act, 2017 ( P.L. 115-31 ) Congress appropriated $175,840,000 for REAP. Table 1 shows the history of appropriations for the program. To be eligible for REAP funds, LEAs must be designated rural by the U.S. Department of Education (ED). The National Center for Education Statistics (NCES) has devised a typology to classify schools based on their geographic locations. Using Census Bureau geographic data, NCES assigns "locale codes" to each school. Based on their proximity to urbanized areas and urban clusters, schools are classified along a 12-point urban-to-rural scale as follows (locale codes in parentheses): Large City (11) : Territory inside an urbanized area and inside a principal city with population of 250,000 or more. Midsize City (12) : Territory inside an urbanized area and inside a principal city with population of less than 250,000 and greater than or equal to 100,000. Small City (13) : Territory inside an urbanized area and inside a principal city with population of less than 100,000. Large Suburb (21) : Territory outside a principal city and inside an urbanized area with population of 250,000 or more. Midsize Suburb (22) : Territory outside a principal city and inside an urbanized area with population of less than 250,000 and greater than or equal to 100,000. Small Suburb (23) : Territory outside a principal city and inside an urbanized area with population of less than 100,000. Fringe Town (31) : Territory inside an urban cluster that is less than or equal to 10 miles from an urbanized area. Distant Town (32) : Territory inside an urban cluster that is more than 10 miles and less than or equal to 35 miles from an urbanized area. Remote Town (33) : Territory inside an urban cluster that is more than 35 miles from an urbanized area. Fringe Rural (41) : Census-defined rural territory that is less than or equal to 5 miles from an urbanized area, as well as rural territory that is less than or equal to 2.5 miles from an urban cluster. Distant Rural (42) : Census-defined rural territory that is more than 5 miles but less than or equal to 25 miles from an urbanized area, as well as rural territory that is more than 2.5 miles but less than or equal to 10 miles from an urban cluster. Remote Rural (43) : Census-defined rural territory that is more than 25 miles from an urbanized area and is also more than 10 miles from an urban cluster. An LEA is eligible for the SRSA program if all schools served by the LEA have a locale code of 41, 42, or 43 and either its average daily attendance (ADA) is less than 600 or the county or counties in which the LEA is located has a population density of fewer than 10 people per square mile. The SRSA statute allows the Secretary of Education to waive the locale code requirement (but not the ADA or population density requirements) based on a state government agency's determination that the LEA is located in a rural area. The ESSA amendments made otherwise eligible LEAs within educational service agencies eligible for SRSA funds. LEAs that lost SRSA eligibility due to the ESSA amendments are provided a declining share of prior grant amounts through FY2019 under a hold harmless provision. An LEA is eligible for the RLIS program if all its schools have locale codes of 32, 33, 41, 42, or 43 and at least 20% of the children the LEA serves are from families below the poverty line. The ESSA amendments provided the Secretary with waiver authority for the locale code requirement based on state determination that the LEA is located in a rural area, which previously only existed for the SRSA program. Amounts that LEAs receive and aggregate state amounts are determined differently under the SRSA and RLIS programs. Under the SRSA program, an initial amount is calculated for each eligible LEA and then funds are added based on enrollment and subtracted based on "offsetting" amounts received from other ESEA programs. Under RLIS, grants are first made to states based on a formula and then subgranted to LEAs on either a formula or competitive basis. Congress intended the SRSA program to be a supplement to certain other ESEA grant funds. Thus, an LEA's final SRSA grant amount is based on adjusting its initial amount by the total amount it received from other ESEA programs. The initial SRSA amount is equal to a base grant of $20,000 plus an additional amount for LEAs with enrollments of more than 50 students. The additional amount is equal to $100 for each student in excess of 50 students; however, generally, no grant amount may exceed $60,000. The following are some examples of initial amount calculations: LEAs with 50 students or fewer have initial grant amounts equal to the base amount of $20,000. An LEA with 55 students has an initial amount of $20,500 (i.e., the base amount of $20,000 plus $500, which is $100 times the five students in excess of 50 students). An LEA with 449 students has an initial amount of $59,900 (i.e., the base amount of $20,000 plus $39,900, which is $100 times the 399 students in excess of 50 students). LEAs with between 450 and 599 students have initial amounts of $60,000 (e.g., the calculation for an LEA with 451 students would be the base amount of $20,000 plus $40,100, which is $100 times the 401 students in excess of 50 students; since this exceeds the maximum amount of $60,000, the amount of the initial award would be $60,000). The final SRSA grant amount is equal to the initial award minus the amount an LEA received from two ESEA grant programs in the prior fiscal year: (1) the Supporting Effective Instruction program, Title II, Part A, and (2) the Student Support and Academic Enrichment Grants, Title IV, Part A. As a result of this offset provision, an LEA whose initial SRSA grant amount is less than what it received from these two ESEA programs in the prior fiscal year would not receive funds under the SRSA program. Unlike under the SRSA program, the Secretary must reserve funds from the total RLIS appropriation for Bureau of Indian Education (BIE) schools (0.5%) and for outlying areas (0.5%). The remainder is allotted to states based on each state's share of students attending schools in eligible LEAs nationwide. For example, a state with 2% of the national enrollment in RLIS-eligible LEAs would receive 2% of funds remaining after reserving BIE and outlying area funds. States award subgrants to eligible LEAs either competitively or based on a formula selected by the state, and approved by the Secretary. The ESSA amendments provide that LEAs in a state that does not participate in the RLIS program may submit an application directly to the Secretary as a "specially qualified agency." ESSA provided new authority allowing an LEA eligible under both the SRSA and RLIS programs to choose the program from which to receive funds; the Secretary is to determine the date by which notification must be given to ED. Table 2 shows the number of LEAs in each state that are eligible for REAP funds for FY2017, and a map of these LEAs is displayed in the Appendix . Recipients of REAP grants may use funds for activities authorized by several ESEA programs: Improving Basic Programs Operated by Local Educational Agencies (Title I, Part A); Supporting Effective Instruction (Title II, Part A); Language Instruction for English Learners and Immigrant Students (Title III); and Student Support and Academic Enrichment Grants (Title IV, Part A). Under the "alternative use of funds authority" (commonly known as REAP-Flex), LEAs that are eligible for SRSA grants (whether or not they receive any SRSA funds) have the flexibility to use offsetting funds from ESEA Title II-A and Title IV-A programs for any activities authorized by the SRSA program. For example, under REAP-Flex an LEA may use funds received under the Supporting Effective Instruction program (Title II-A) to provide language acquisition and services to immigrant students authorized under the Language Instruction for English Learners and Immigrant Students Program (Title III). Changes made by the ESSA amendments may present implementation issues. One possible area concerns the impact of dual eligibility on the awarding of grants. ESSA provided new authority allowing an LEA eligible under both the SRSA and RLIS programs to choose the program from which they prefer to receive funds. This could greatly complicate grant administration at both the federal and state levels. The new law requires the Secretary to establish a date by which LEAs must declare their choice; however, this may be a difficult decision to make by a certain date because estimated grant amounts will change due to the number and characteristics of other participating LEAs. Specifically, the ratable reduction and hold harmless provisions in SRSA will be greatly impacted by the number of LEAs that choose this program. Similarly, RLIS amounts will depend largely on the popularity of this choice. Currently, SRSA awards are much larger than RLIS awards. In FY2016, the average per pupil grant amount was $78 for SRSA, compared to $23 for RLIS. However, that could change substantially if a large number of former RLIS recipients decided to take SRSA funds. Even though it appears that most dual-eligible LEAs were formerly not in the RLIS program, there still may be a significant impact due to the ESSA changes. Perhaps most importantly, the changes appear to force a choice based upon limited information. This is likely to create some uncertainty for LEAs and administrative complications for ED and state officials.

Summary: The Rural Education Achievement Program (REAP) is authorized by Part B of Title V of the Elementary and Secondary Education Act of 1965, as amended by the Every Student Succeeds Act (ESSA, P.L. 114-95) in 2015. To compensate for the challenges facing rural schools, REAP awards two types of formula grants. The Small, Rural School Achievement (SRSA) program provides funds to rural local educational agencies (LEAs) that serve small numbers of students. The Rural and Low-Income School (RLIS) program provides funds to rural LEAs that serve high concentrations of low-income students, regardless of the LEA's size. The ESSA reauthorization of the REAP statute made several major changes to the way funds are allocated to rural LEAs. Most notably, ESSA amended the scheme used to identify rural LEAs that may be eligible for REAP funds and gave LEAs the option to choose which program to receive funds under if eligible for both SRSA and RLIS. REAP funds are divided equally between the SRSA and RLIS programs at the national level, but at the local level, award amounts to LEAs under each program vary widely. In FY2016, the average per pupil grant amount was $77 for SRSA awards, compared to $22 for RLIS awards. Given that final award amounts under each program depend greatly on the number of LEAs eligible for funds, the new option to choose the program from which to receive funds may raise important implementation issues. This report provides a detailed description of eligibility rules and formula allocation procedures for SRSA and RLIS and discusses issues that may arise as ESSA amendments are implemented.