The number of limited English proficient (LEP) students enrolled in K-12 education increased by 60.8% from the 1994-1995 school year to the 2004-2005 school year; total student enrollment increased by 2.6% over the same time period. Given this tremendous growth in the LEP student population and the likelihood that the 110 th Congress will consider legislation to reauthorize the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the No Child Left Behind Act of 2001 (NCLBA; P.L. 107-110 ), this report examines the formula used to provide grants to states under the English Language Acquisition program, authorized by Title III of the ESEA. This program provides grants to states to help ensure that LEP and recent immigrant students attain proficiency in English. Much of the debate surrounding the reauthorization of this program has focused on the data used to determine how many LEP and immigrant students are in each state, as these data are the basis upon which grants are determined. This report begins with a general overview of the English Language Acquisition program, focusing specifically on the state grant formula. This is followed by a detailed analysis of the American Community Survey (ACS) data currently used by the U.S. Department of Education (ED) to calculate these grants, as well as state-reported data that could potentially be used to calculate these grants. The third section of the report compares student counts based on ACS data and state data and examines differences in estimated FY2007 state grants if state data were used as the basis for determining the awards. The report concludes with an examination of some of the drawbacks of using either the ACS or state-reported data for determining state grants and other possible alternative strategies for calculating state grants. Title III, Part A of the ESEA authorizes formula grants to states to ensure that limited English proficient (LEP) students and immigrant children develop English proficiency. Prior to determining state grant allocations, statutory language provides for several reservations of funds. These include reservations for national activities, for schools serving Native American and Alaska Native students, and for the outlying areas. After reserving the required funds, grants to the 50 states, the District of Columbia, and Puerto Rico are determined based on the state's proportional share of LEP students and immigrant students relative to the U.S. population of LEP students and immigrant students. These shares are then weighted, with a higher weight (0.8) being assigned to the state's population of LEP students and a lower weight (0.2) being assigned to the state's population of recent immigrant students. No state can receive a grant less than $500,000. The grant to Puerto Rico cannot exceed 0.5% of the total available for state distribution. In determining the number of LEP and immigrant students in an individual state and in the United States, statutory language directs ED to use "the more accurate" of (1) data available from the American Community Survey (ACS), or (2) the number of children being assessed for English proficiency as required under Title I of the ESEA. In practice, ED has been using the ACS data to make state allocations since FY2005. Title III grants for a specific fiscal year have been based on ACS data from two years prior. For example, FY2007 grants are based on the 2005 ACS data. According to testimony provided by Cornelia Ashby, Director of Education, Workforce, and Income Security Issues at the Government Accountability Office (GAO), ED has not used state data because it believes the state data are incomplete. For example, ED noted that for the 2004-2005 school year, not every state provided data, and some data included only partial student counts. ED obtains the relevant ACS data from the U.S. Census Bureau. The LEP student count is based on the population aged 5 to 21 who reported speaking a language other than English at home and speaking English less than "very well." The number of immigrant students is based on the number of individuals aged 3 to 21 who reported entering the United States during the two years prior to the survey or during the survey year. For example, for the 2005 ACS, individuals entering the country in 2003 or later were counted as recent immigrant students. According to GAO, these questions were developed for the 1980 census to "obtain information needed about current language use and limited English language proficiency as a result of legislation such as the Civil Rights Act of 1964, the Bilingual Education Act, and the Voting Rights Act." These questions have not been modified since their inception. Thus, they were not designed specifically for Title III purposes. Tables 1 and 2 provide the ACS counts for LEP and immigrant students, respectively, used by ED in determining state grant amounts for FY2005, FY2006, and FY2007. Few states had relatively stable LEP student counts from 2002 to 2003 and 2003 to 2004 ( Table 1 ). It was more common for states to experience substantial increases or decreases in their number or percentage of LEP students across the various ACS administrations. For example, the number of LEP students in Arizona declined by over 16,000 students from 2002 to 2003 but increased by nearly 21,000 students from 2004 to 2005, while the number of LEP students in Texas decreased by almost 58,000 students from 2002 to 2003 and increased by almost 25,000 students from 2003 to 2004. In other states, the change in the estimated number of LEP students may have been relatively small, but because some states serve small numbers of LEP students, changes in their student counts can result in large percentage changes. For example, the number of LEP students in Arkansas increased by about 8,000 students from 2002 to 2003 and decreased by about 5,000 students from 2003 to 2004, resulting in percentage changes in student counts of 59.9% and 21.6%, respectively. Although the number of immigrant students identified through the ACS is smaller then the number of LEP students, similar patterns were found in the immigrant student counts across years ( Table 2 ). There are several potential sources of state-reported data and three types of state LEP student counts: (1) total number of LEP students, (2) number of LEP students receiving services (Title III or non-Title III), and (3) number of LEP students being served in Title III. The National Clearinghouse for English Language Acquisition and Language Instruction Educational Programs (NCELA) uses data provided by states to ED in their Consolidated State Performance Reports (CSPRs) to produce an annual state-by-state count of the number of LEP students enrolled. The CSPRs collect data on the total number of students identified as LEP. The most recent data available are for the 2004-2005 school year. Missing data and data discrepancies were resolved by NCELA through telephone calls to the relevant states. The Common Core of Data (CCD) collects data on the total number of students receiving LEP services. This is not limited to Title III services only. Rather, it includes students served in appropriate programs of language assistance. This is somewhat different than the data available from NCELA, as the CCD count does not include students who are identified as LEP but are not receiving services. The most recent data available from the CCD are for the 2004-2005 school year. A third source of data is the biennial report on Title III performance. The first report was published by ED in 2005 and covered 2002-2004. It included data on the number of LEP students served in Title III programs during the 2002-2003 and 2003-2004 school years. It did not, however, report on the total number of LEP students in the state or the total number of LEP students receiving Title III and non-Title III services. According to staff at NCELA, the second biennial report, expected later this year, will include counts of both the number of LEP students served in Title III programs and the total number of LEP students in the state. They also indicated that much of the data included in the forthcoming second biennial report has been drawn from the annual CSPRs. LEP student counts from the NCELA data and CCD data are compared for the 2002-2003, 2003-2004, and 2004-2005 school years ( Table 3 ). The NCELA data produced using the CSPRs are more complete than the data available from the CCD, as state data are missing for several states in the CCD data. As the NCELA LEP student count is, in theory, a more comprehensive count than the CCD LEP student count, it would be expected that the NCELA counts would be higher than the CCD counts but not substantially higher, as it is not expected that many parents would choose for their children not to receive services. The data on Table 3 do not consistently support these theories. For example, for the 2004-2005 school year, the NCELA count is actually lower than the CCD count in 18 states. For Indiana, Louisiana, Oklahoma, Vermont, and West Virginia, the NCELA count is at least 20% lower than the CCD count. Although it was expected that the NCELA count might be somewhat higher than the CCD count, in Florida, Mississippi, New Hampshire, North Dakota, Rhode Island, South Carolina, South Dakota, Vermont, and Wisconsin, the NCELA count is at least 20% higher than the CCD count. Similar issues exist with the data from the 2002-2003 and 2003-2004 school years. It is the exception, rather than the rule, that the NCELA data and the CCD data match or differ by a relatively small number of students. In addition, differences between the NCELA data and the CCD data change for some states from year to year with the NCELA count being higher in some years, the CCD count being higher in other years, and the magnitude of the differences between the counts changing from year to year.