The primary source of federal aid to K-12 education is the Elementary and Secondary Education Act (ESEA), particularly its Title I, Part A program of Education for the Disadvantaged. The ESEA was initially adopted in 1965, and was most recently reauthorized and amended by the No Child Left Behind Act of 2001 (NCLB), P.L. 107-110 , that authorized ESEA programs through FY2008. It is widely expected that the 111 th Congress will consider whether to amend and extend the ESEA. The NCLB initiated a major expansion of federal influence on several aspects of public K-12 education, primarily with the aim of increasing the accountability of public school systems and individual public schools for improving achievement outcomes of all pupils, especially the disadvantaged. States that receive grants under ESEA Title I-A must implement in all public schools and school districts a variety of standards-based assessments in reading, math and science; make annual adequate yearly progress (AYP) determinations for each public school and local educational agency (LEA); and require virtually all public school teachers and aides to meet a variety of qualification requirements. State AYP policies must incorporate an ultimate goal of all public school pupils reaching a proficient or higher level of achievement in reading and mathematics by the end of the 2013-2014 school year. Further, states participating in ESEA Title I-A must enforce a series of increasingly substantial consequences for most of their schools and almost all school districts that fail to meet the AYP standards for two consecutive years or more. Major ESEA programs other than Title I-A provide grants to support the education of migrant students; recruitment of and professional development for teachers; language instruction for limited English proficient (LEP) students; school safety and drug abuse prevention programs; after-school instruction and care; expansion of charter schools and other forms of public school choice; education services for Indian, Native Hawaiian, and Alaska Native students; Impact Aid to compensate LEAs for taxes foregone due to certain federal activities; and a wide variety of innovative educational approaches or instruction to meet particular student needs. The ESEA contains 45 separately authorized programs, plus approximately 20 specified sub-programs. The methods by which federal funds are provided to grantees under these programs fall into five general categories: programs under which federal funds are allocated by the U.S. Department of Education (ED) to states, as well as to all or most LEAs via one or more formulas specified in the ESEA (example: ESEA Title I, Part A, Education for the Disadvantaged); programs under which federal funds are allocated by ED to states via a statutory formula, while state educational agencies (SEAs) suballocate these funds either on a competitive or discretionary basis, or via a state-developed allocation formula consistent with general statutory guidance (example: ESEA Title IV, Part B, 21 st Century Community Learning Centers); programs under which federal funds are allocated by ED directly to LEAs via formulas specified in the ESEA (example: ESEA Title VIII, Impact Aid); programs under which federal funds are allocated by ED to state and/or local grantees on a competitive or discretionary basis (example: ESEA Title V, Part D, Subpart 6, Gifted and Talented Students); and programs under which federal funds are allocated by ED to a single eligible grantee specified in the ESEA (example: ESEA Title II, Part C, Subpart 2, National Writing Project). ESEA allocation formulas are mechanisms established through statute or other official policy documents that define how appropriated funds are to be allocated among SEAs or LEAs nationwide. They take the form of mathematical equations through which ED, and possibly also SEAs, calculate specific grant amounts for each potential grantee meeting statutory eligibility criteria. They almost always include one or more population factors, but typically include a number of additional factors. This report discusses and analyzes the current allocation formulas for ESEA programs in the first three categories listed above. It provides the following: 1. a description of general categories of factors used in the ESEA's allocation formulas; 2. descriptions of each program's formula(s); and 3. analyses of general patterns and issues related to these formulas. Other CRS reports provide more detailed discussions and analyses of the allocation formulas of major individual ESEA programs. This report will be updated infrequently, when major changes occur in ESEA program allocation formulas. It is important to understand the vocabulary commonly applied to federal K-12 education allocation formulas. Therefore, an explanation of key terms precedes the discussion of the ESEA formulas. Level of Recipient Entity and Level at Which Grants Are Calculated by ED. Under most ESEA formula grant programs, grants are made to LEAs via the SEAs. If LEAs are the ultimate grantees in a state formula grant program, the ESEA program may provide for substate distribution of grants by SEA-administered competition, through a statutory substate allocation formula directing SEAs how to determine LEA grants or, less frequently, through a statutory LEA-level formula with grants calculated by ED itself but distributed to LEAs by SEAs (with limited options for SEAs to adjust the LEA grants as calculated by ED). Under a few ESEA formula grant programs, LEA grants are calculated and directly allocated by ED (e.g., Impact Aid). Formula Factors. Allocation formulas have one or more factors that target funds to SEAs, LEAs, or other entities to accomplish or facilitate some policy outcome. For example, a program aiming to serve children from poor families would have a formula based on estimated numbers of school-age (5-17 years) children in poor families. In a simple formula, each state would be allocated funds in proportion to the estimated number of such children living in that state: that is, a state's proportion is obtained by dividing its number of school-age children in poor families by the total number of such children nationwide. For example, if 14% of all school-age children in poor families live in California, this simple formula would allocate 14% of all state grant funds to California. A formula can include more than one population factor, and it can weight the factors differently. For example, a formula could distribute 50% of funds based on total school-age population and 50% based on school-age children in poor families. Population Factor. The most common allocation formula factor is a population factor. Almost all federal K-12 education program allocation formulas include such a factor. The most common population factors are school-age children in poor families and total school-age children. In addition, several ESEA programs allocate funds on the basis of a population factor that is specifically related to the program's purpose, such as Indian pupils, migratory children, or children whose parents live or work on federal property. Usually, a population factor is direct, but sometimes it is indirect. For example, if a program allocates grants in proportion to grants made under ESEA Title I-A, this provision indirectly incorporates the Title I-A formulas' population factors (primarily school-age children in poor families). Title I-A Grant Factor. Many ESEA programs allocate some or all of their funds in proportion to grants made under the largest ESEA program—aid for the Education of the Disadvantaged under Title I, Part A. For example, grants under ESEA Title II, Part D, Education Technology, are made in proportion to Title I-A grants (subject to a higher state minimum grant provision than under Title I-A). Thus, grants calculated under Title I-A become an allocation factor for several other programs. Eligibility Threshold. Many ESEA programs require LEAs to meet population factor thresholds in order to be eligible to receive grants. For example, under the Title I-A Concentration Grant allocation formula, LEAs must meet either of two population factor eligibility thresholds: (1) 6,500 population factor children (mostly school-age children in poor families) or (2) a population factor child percentage (population factor children divided by total school-age population) of 15%, in order to receive grants. Expenditure Factor. Several ESEA program allocation formulas include an expenditure factor. These are based on state or (less frequently) LEA average per pupil expenditure for public K-12 education. Expenditure factors are intended to adjust for state or local differences in the costs of providing public K-12 education, although they are often criticized as reflecting differences in ability to pay for educational services as well. In most cases, floors and ceilings, based on percentages of the national average, are applied to this factor (e.g., a floor of 80% and a ceiling of 120% of the national average per pupil expenditure). Usually, an expenditure factor is direct, but sometimes it is indirect. For example, if a program allocates grants in proportion to grants made under ESEA Title I-A (see above), this provision indirectly incorporates the Title I-A formulas' expenditure factors. Hold Harmless. Some formulas establish a minimum state or LEA grant equal to a specified percentage of the amount received in a previous year. Usually, this is the immediately preceding year, although sometimes it is a "base year" that may be several years in the past. The minimum percentage may be the full amount received in the previous year (i.e., 100%) or, more often, some lesser percentage (e.g., 85%). Raising a state or LEA to its hold harmless level almost always reduces grants to other states or LEAs that do not benefit from the hold harmless. Hold harmless amounts are only guaranteed if funds are sufficient to pay for them. If not, hold harmless amounts are ratably reduced (see below) to meet the level of the appropriation. Further, in almost all cases, hold harmless provisions only apply to grantees meeting program eligibility criteria for the current year, not necessarily every grantee that received a grant in the preceding year.