Preliminary Overview of Programs and Changes Included in the No Child Left Behind Act of 2001
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Title V

    Innovative Programs
    (Title V, Part A)


    Retains, with a few changes, the previous Title VI Innovative Education State Grants program that provides flexible funds to States and LEAs for innovative educational programs.

    Major Changes from Current Law

    • Allocations to Local Educational Agencies - Maintains, for funding up to the FY 2002 level, requirement that States allocate at least 85 percent of their funds to LEAs based on relative enrollments in public and private schools. In addition, however, 100 percent of the funds that a State receives beyond what it received in fiscal year 2002 must be distributed to LEAs. For small States, at least 50 percent of those funds must be distributed to LEAs.

    State Uses of Funds

    • Administration - Modifies antecedent law so that States may use their entire 15 percent set-aside for administration.

    • School Renovation, IDEA, and technology - Adds a provision that allows SEAs to use program funds for certain activities authorized in the Department's fiscal year 2001 Appropriations Act, including urgent school renovation, activities authorized under part B of the Individuals with Disabilities Education Act (IDEA), and technology activities related to school renovation.

    • Other new allowable uses - Including the support of charter schools; statewide education reform, school improvement programs and technical assistance and direct grants to LEAs; yearly student assessments; implementation of State and local achievement standards; and independent analyses to measure and report on student achievement; and certain school safety programs.

    • Local Uses of Funds - New allowable activities include, among other things: professional development and class-size reduction activities; charter schools; community service programs; consumer, economic, and personal finance education; public school choice; programs to hire and support school nurses; school-based mental health services; alternative education programs; prekindergarten programs; academic intervention programs; programs for CPR training in schools; smaller learning communities programs; activities to advance student achievement; programs and activities that use best practice models; same-gender schools and classrooms; service-learning activities; school safety programs; programs that use research-based cognitive and perceptual development approaches and rely on a "diagnostic-prescriptive model" to improve students' learning; Title I supplemental educational services; magnet schools; dropout prevention; gifted and talented education; and parental and community involvement.

    • Adds new requirements that, within 120 days of enactment, the Secretary issue specific award criteria and other guidelines for LEAs planning to use program funds to provide same gender schools and classrooms.

    Accountability (new requirements)

    • Eliminates the FY 1998 evaluation requirement in the State application section of current law. Replaces the current-law requirement on the biennial submission of data on the use of funds, types of services provided, and students served with a requirement for an annual statewide summary of how the program is improving student achievement or improving the quality of education for students.

    • Adds a requirement that local applications include assurances that programs, services, and activities will be evaluated annually.


    • Federal to State - Funds are allocated by formula based on States' relative share of the school-age population, with each State receiving a minimum of ½ of 1 percent.

    • State to Local - States must allocate at least 85 percent of their funds to LEAs based on the relative enrollments in public and private schools. This formula must be adjusted, upon approval of the Secretary, to provide higher per-pupil allocations to LEAs that have the greatest numbers or percentages of children whose education imposes a higher than average cost per child, such as: 1) children living in areas with high concentrations of low-income families, 2) children from low-income families, and 3) children living in sparsely populated areas.

    • 100 percent of the funds that a State receives beyond what it received in FY 2002 must be distributed to LEAs. For small States, at least 50 percent of those funds must be distributed to LEAs.


    • Federal - Up to 1 percent for the outlying areas.

    • State - Up to 15 percent for State administration.

    Charter Schools
    (Title V, Part B, Subpart 1)


    Retains, with a few changes, the Charter Schools grants program that awards grants to State educational agencies (SEAs) and charter schools to support the planning, design, and initial implementation of charter schools. The reauthorization makes only minor changes to the current program, except for adding a new authority for Per-Pupil Facilities Aid Grants.

    Changes from Current Law

    • Per-Pupil Facilities Aid Grants - Authorizes a new program of competitive 5-year grants to States with already established per-pupil aid programs to assist charter schools with their school facility costs. These State programs must be specified in State law and provide annual funding on a per-pupil basis for charter school facilities; the financing must include, or be dedicated solely for, the funding of facilities. Federal funds may be used to match funds for State per-pupil facility aid programs. The Federal share of funds decreases each year (from 90 percent in the first year to 20 percent in year 5) and phases out entirely after 5 years.

    • LEA Costs - Prohibits local educational agencies from reserving administrative fees or expenses from subgrant awards unless agreed to by the LEA and subgrantee.

    • Notification - Requires that applicants for the Charter Schools Grants program provide copies of applications to the State public chartering authority, if it exists.


    • State - Requires the authorized State public chartering agency to review and evaluate charter schools supported by the program at least once every 5 years to determine whether schools are meeting the terms of their charters and meeting or exceeding State or charter school goals for student academic achievement.

    • Per-Pupil Facilities Aid Programs - Requires grantees to submit an annual report on their operations and activities to the Secretary.

    Allocation of Funds

    • Authorization of Appropriations - Authorizes the first $200 million for the regular Charter School Grant program and the next $100 million for the Per-Pupil Facilities grants. At appropriations levels above $300 million, funds are evenly divided between the two programs.

    • Charter Schools Program - Competitive grants to SEAs that have the authority, under the law, to approve charter schools. SEAs, in turn, make competitive grants to charter schools. If an SEA chooses not to compete, charter schools in the State may apply directly to the Secretary.

    • Per-Pupil Facilities Aid Program - Competitive awards to SEAs that, in turn, make formula grants to charter schools on a per-pupil basis.

    Set- Asides

    • Federal - 5 percent of the Charter School Grants funds or $5 million, whichever is greater (but not more than $8 million), for national activities including evaluations and technical assistance.

    • Charter School Grants - Up to 5 percent of the funds may be used for administrative expenses; up to 10 percent for a revolving loan fund; and up to 10 percent for dissemination activities.

    • Per-Pupil Facilities Aid Programs - Up to 5 percent of the funds may be used for evaluations, technical assistance, and dissemination activities.

    Credit Enhancement Initiatives to Assist Charter School Facility Acquisition, Construction, and Renovation
    (Title V, Part B, Subpart 2)


    Authorizes grants for innovative credit enhancement initiatives to help charter schools with the cost of acquiring, constructing, and renovating facilities. The language is almost identical to the Charter Schools Facilities Financing Demonstration program authorized in the 2001 appropriations act.

    Changes from Current Law

    • One minor change to last year's language is a deletion of a requirement for "one-time" grants.

    Program Description

    • Eligible Entities - private, non-profit, organizations; governmental entities; and consortia of these two types of entities.

    • Use of Funds - Allows grantees to reserve one-quarter of one percent of the grant for administrative costs. The remainder of the funds must be deposited in a reserve account and be used for one or more of the following purposes:

      • Guaranteeing, insuring, and reinsuring bonds, notes, and other debt used to finance charter school facilities.

      • Guaranteeing and insuring leases of personal and real property.

      • Facilitating charter schools' facilities financing by identifying potential lending sources, encouraging private lending, and other similar activities.

      • Facilitating the issuance of bonds by charter schools, or by other public entities for the benefit of charter schools, by providing technical, administrative, and other appropriate assistance (including the recruitment of bond counsel, underwriters, and potential investors and the consolidation of multiple charter school projects within a single bond issue).


    • Federal - Requires the Department to submit annual reports to Congress on activities conducted under this program.

    • Grant recipients - Requires grantees to submit annual financial and progress reports to the Department. Permits the Department to revoke funds in the event of inadequate progress.


    • Federal - Awarded competitively to eligible entities. Requires the Department to award at least three grants (unless Funding is insufficient), with at least one grant each to the three types of eligible entities as long as the Department receives applications of sufficient quality from each type of entity.

    • Grant recipients - Grant recipients identify charter schools to benefit from leveraged grant funds.

    Voluntary Public School Choice
    (Title V, Part B, Subpart 3)


    Authorizes competitive awards of up to 5 years to establish or expand programs that provide students and parents with greater public school choice. Grantees may use up to one year for planning or program design.

    Program Description

    • Eligible Entities - SEAs, LEAs, or partnerships that include at least one SEA or LEA working in cooperation with public, for-profit, or non-profit entities.

    • Use of Funds - Authorizes grantees to use program funds to: (1) plan the public school choice program; (2) make tuition transfer payments to the schools that students choose to attend; (3) increase the capacity of high-demand schools to serve greater numbers of students (except that program funds cannot be used for school construction); (4) carry out public information campaigns to inform parents and students about public school choice opportunities; and (5) pay other costs reasonably necessary to implement a public school choice program.

    • Transportation - Requires grantees to provide participating students with transportation, or pay transportation costs, to their school of choice.

    • Participation and Selection of Students - Stipulates that student participation in each program must be voluntary. Also requires that, when more students apply to participate in the program than can be accommodated, grantees must select students to participate on the basis of a lottery.

    • Applications - Requires that applications for program funds include descriptions of: (1) the public school choice program; (2) how and when parents will be given notice of the existence of the program; (3) how students will be selected for the program; and (4) how the program will be coordinated with other Federal and non-Federal projects.

    • Priorities - Requires that the Secretary give priority to projects that would: (1) provide the widest variety of choices to all students in the schools participating in the program; (2) have the greatest impact in allowing students in low-performing schools to attend higher-performing schools; and (3) implement an interdistrict public school choice program.


    • Federal - Requires the Secretary to evaluate: (1) the extent to which the programs funded promote educational equity and excellence; (2) the characteristics of participating students; and (3) the effect of the program on the academic achievement of students participating in the program, particularly students who move from low- to higher-performing schools, and on the overall quality of participating schools and districts.

    • Grantee - No specific accountability provisions.


    • Federal - Competitive awards to eligible entities.


    • Federal - Up to 5 percent for evaluation, information dissemination, and technical assistance.

    • Grantee - Up to 5 percent for administrative expenses.

    Magnet Schools Assistance
    (Title V, Part C)


    Retains the current Magnet Schools Assistance program, which provides grants to establish and operate magnet schools in local educational agencies that are under a court ordered or federally-approved voluntary desegregation plan to eliminate, reduce, or prevent minority group isolation in elementary and secondary schools. The reauthorization makes only minor changes to the current statue, except that it deletes the authority for grants for Innovative Programs.

    Changes from Current Law

    • Innovative programs - Deletes the Magnet Schools "Innovative Programs" authority, which authorized up to 5 percent of funds for grants that involve desegregation activities in schools other than magnet schools, such as neighborhood or community schools.

    • Use of Funds - New allowable uses of funds include activities to: promote sustainability of the local program, such as professional development; enable schools to serve students attending a school but not enrolled in the magnet program; and design magnet schools for students in all grades. Also, increases the cap on the amount of funds that may be used for planning, from 10 percent to 15 percent in a project's third-year. (First- and second-year limits are unchanged.)

    • National Activities - Expands national activities to include, besides evaluation, technical assistance and dissemination activities. Requires the Secretary to collect and disseminate information on successful magnet school programs.


    • Federal - Authorizes evaluations that address the extent to which magnet school programs; lead to educational quality and improvement; enhance student access to quality education; eliminate, reduce, or prevent minority group isolation; and differ from other programs in terms of the organizational characteristics and resource allocations.

    Allocation of Funds

    • Federal to Local - Competitive grants to LEAs or consortia of LEAs with court-ordered or federally approved voluntary desegregation plans.


    • Federal - Up to 2 percent for evaluation, technical assistance, and dissemination.

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Last Modified: 01/19/2005