Department of Education

Recommendations and Actions

ED01: Redesign Chapter 1 of Elementary and Secondary Education Act


Chapter 1 of the Elementary and Secondary Education Act of 1965 (ESEA) is the major federal program to improve the education of disadvantaged children. The program was budgeted to receive $7.1 billion in fiscal 1994, 21 percent of the Education Department's request. Chapter 1 serves one in nine school-age children, largely providing compensatory reading and mathematics instruction at the elementary school level. While the basic skills of low-income children have improved in the last 20 years, a wide consensus now holds that the time has come, as the Education Department's own assessment says, for reinventing Chapter 1.(1)

Expert evaluation concludes that Chapter 1 monies do not make much positive difference. On average, the program adds only about 10 minutes a day of reading and mathematics instruction and takes a remedial, basic skills approach that is inconsistent with substantive curricula. Influenced largely by fear of federal audit procedures, 82 percent of school districts offer limited pullout instruction, which takes children away from normal classroom activities. While the percentage of districts also offering in-class Chapter 1 instruction has increased from 28 percent to 58 percent between the 1985-86 and 1990-91 school years, this instruction is often characterized by drill and practice instruction and homogeneous grouping, which are generally regarded as counterproductive.(2) Table 1 compares mathematics achievement levels for U.S. students overall with the one-tenth of students who live in disadvantaged urban areas. The Education Department's assessment concludes that "the evidence is consistent in showing that students receiving Chapter 1 services, as currently configured, are not progressing."(3)

 Table 1: Students below Basic Math Achievement Level
        Assessment       Urban 
 Grade     Year       Disadvantaged     All
 4            1990            69%           46% 
               1992            73%           39% 
 8            1990            58%           42% 
               1992            72%           37% 

Source: National Center for Education Statistics, A Preliminary Report of National Estimates from the National Assessment of Educational Progress 1992 Mathematics Assessment (U.S. Department of Education, January 12, 1993), pp. 9, 21.

Several key aspects of the program need reinvention. The Chapter 1 law and regulations often result in rigid procedures, discouraging the exercise of judgment by teachers and principals--those closest to the point of service delivery. School districts are required to document that Chapter 1 funds go to programs that benefit only designated Chapter 1 children and that those programs are distinct additions to regular school activities, even if a teacher's or principal's best professional judgment is that a disadvantaged child would be better served by upgrading certain activities in which the child is integrated with other students.(4) Therefore, school districts often perceive that the safest course is to use Chapter 1 funds only to support services in which Chapter 1 children are segregated.

The rigid specifications for the Chapter 1 program are so well established that they tend to persist even when they are no longer required. Although the 1988 reauthorization of ESEA encouraged schoolwide projects serving all students in schools with concentrations of 75 percent or more of low-income children, in 1990- 91 such projects were found in only 2,000 out of 9,000 eligible schools.(5) At nearly half the Chapter 1 schools eligible to use the new schoolwide approach, principals were not even aware of that option.(6) Explaining this persistent rigidity, a team of researchers concluded:

Habits of compliance-orientation no doubt change slowly even under strong pressures. Staying with a compliance approach provides the protection of a regulatory framework tested over time. The local administrators may be betting that they would have more to lose by risking an innovative approach whose outcome is uncertain than by introducing change to the system only when necessary, and then only gradually, and at the margin.(7)

A second major problem with the Chapter 1 program is that it requires funding to be allocated to schools based on their numbers of educationally disadvantaged students identified by annual standardized testing. This creates perverse incentives because schools that succeed in improving the achievement of their students stand to lose resources. Thirteen percent of all Chapter 1 elementary school principals in the country reported that their Chapter 1 program has lost some funding as a result of improved student performance.(8)

A third major problem is that Chapter 1 funds are spread thinly across most school districts and schools instead of being concentrated in places with the greatest needs. Approximately 93 percent of all school districts receive Chapter 1 funds, including 85 percent of the least needy districts (where no more than one in 10 children is eligible for free or reduced-price lunches). At the school level, 45 percent of the least needy elementary schools (with no more than 10 percent of students eligible for subsidized lunches) are Chapter 1 schools. Perhaps even worse, in these least needy settings federal accountability statutes and regulations tend to promote--as indicated above--the segregation of low-achieving children from regular classroom activities.

At the same time, many high-poverty schools go unserved because poor districts do not receive enough Chapter 1 funds to serve all of their needy schools. Fourteen percent of the elementary schools with more than 50 percent of students eligible for subsidized lunches receive no Chapter 1 funds. Furthermore, many poor schools cannot serve all of their low-achieving children. One-third of the low-achieving children (those who score below the 35th percentile on reading tests) in high-poverty schools (with at least 75 percent of students eligible for subsidized lunches) do not receive Chapter 1 services.

In addition to changes in these three major problem areas, Chapter 1 needs to be integrated with the strategy of systemic education reform as represented in the administration's Goals 2000 legislation currently moving through Congress. For example, instead of annual, norm-referenced, basic skills testing, Goals 2000 calls for assessment of students' proficiency in challenging academic content areas. Many states are well ahead of the federal government in adopting this approach to assessing student learning outcomes. Nonetheless, "although many states are moving forward with their own systems for assessing students' proficiency levels at critical transition points (e.g., grades 4, 8, and 12), they are required to maintain a dual system by testing Chapter 1 students in all grades at which the program is offered."(9)

Chapter 1 also needs to be a prominent part of the emerging national effort to intervene comprehensively in the decisive period before at- risk children reach the age of 10. The program too often functions as if schools operated in a social vacuum. For example, the strong emphasis on parental involvement that is found in some programs for younger children is not now typical of Chapter 1. In no school- related activity do more than 30 percent of principals report that Chapter 1 parents are very involved. While the number of all types of Chapter 1 schools reporting high parental involvement as volunteers did rise between 1985-86 and 1991-92, the number of high-poverty Chapter 1 schools doing so did not.(10)


The 1993 ESEA reauthorization should focus more Chapter 1 resources on the highest-poverty schools and create effective incentives at the school level to improve the entire education these children receive, not just to improve basic skills.

1. Rigidity in the Chapter 1 program should be replaced by accountability for results.

The schoolwide flexibility option should be extended, in stages, to all Chapter 1 schools that have more than 50 percent low-income students. Further, reform should be achieved by linkage with the National Education Goals, which include the objective that the academic performance of elementary and secondary students will increase significantly in every quartile, and the distribution of minority students in each level will more closely reflect the student population as a whole.

2. The disincentives created by the use of standardized testing should be reversed.

The link between the Chapter 1 funding allocation formula and the designation of children as educationally deprived should be broken. School districts and states should be encouraged to use poverty data to allocate funds to schools. Further, they should replace annual, standardized, norm-referenced testing with general use state assessment procedures that are congruent with the National Educational Standards being developed as part of Goals 2000.

3. Chapter 1 funding should be concentrated on schools serving large proportions of low-income students.

The mix of funding between the basic grant mechanism and grants that concentrate on low-income areas should be changed to approximately 50/50. To further concentrate funds on the highest-poverty areas, the funds allocation also should include an absorption provision that would exclude from Chapter 1 allocations the number of low-income children equivalent to 2 percent of the total number of children in a county.

4. Schools and school districts should be permitted to use some Chapter 1 funds to identify needed social services and develop cooperative arrangements with the other agencies that can provide those services.

They should be permitted to do this within a comprehensive plan for improving the education of low-income students. Moreover, high- poverty schools should be permitted to operate family literacy programs of the type that are carried out now, on a limited scale, under the Even Start program.


The Education Department's assessment of the program observes:

Changes . . . could bring Chapter 1 into the mainstream--indeed, the forefront--of reform in curricular standards, whole school improvement, performance monitoring, and integrated services. The urgent need to transform Chapter 1 reflects the need to transform American education, with special attention to the schools serving the most disadvantaged students.11

This transformation could extend Chapter 1's earlier successes in narrowing the basic skills gap to even more rewarding academic content areas. In this way, reinventing Chapter 1 can respect and build on the deep commitment that many people have to the program as it was fashioned originally during the Great Society era.

Fiscal Impact

The Education Department estimates that, based on current appropriation levels, up to $500 million annually could be redeployed from lower-poverty counties to higher-poverty counties by shifting to the 50/50 funding mix and adding a two percent absorption provision to the Chapter 1 formula (together with other proposed targeting measures). As a result of this reallocation, the counties with the highest poverty rates will receive slightly over 50 percent of all funds (up from their current 43 percent share). This redeployment, however, would not result in overall budget savings.

                    Current Chapter       Improved Targeting
                       1 Formula                Formula
 Highest poverty 
 quartile			$2.7 billion	$3.1 billion
 poverty quartile	$1.6 billion	$1.7 billion
 poverty quartile	$1.2 billion	$1.0 billion
 Lowest poverty 
 quartile			$0.7 billion	$0.4 billion
 Total			$6.2 billion	$6.2 billion

Elimination of the Chapter 1 requirement for separate testing each year would allow, at the least, much better use of approximately $300 million annually of Chapter 1 funds that go to state and local administration.(12)


1. U.S. Department of Education (ED), Reinventing Chapter 1: The Current Chapter 1 Program and New Directions; Final Report of the National Assessment of the Chapter 1 Program (Washington, D.C., February 1993). See also Commission on Chapter 1, Making Schools Work for Children in Poverty (Washington, D.C.: American Association for Higher Education, December 1992).

2. U.S. Department of Education, Annual Evaluation Report 1991 (Washington, D.C., 1992), pp. 101-3, 101-4; and ED, Reinventing Chapter 1, pp. 33-34, 80-85.

3. U.S. Congress, House, Subcommittee on Elementary, Secondary, and Vocational Education, testimony of Alan L. Ginsberg, Acting Assistant Secretary for Policy and Planning, February 25, 1993.

4. U.S. Department of Education, Chapter 1 Policy Manual: Basic Programs Operated by Local Educational Agencies (Washington, D.C., April 1990), pp. 45, 49, 73.

5. Milsap, Mary Ann, Marc Moss, and Beth Gamse, Chapter 1 in the Public Schools: The Chapter 1 Implementation Study: Final Report, U.S. Department of Education Contract No. LC89038001 (Cambridge, MA: Abt Associates, Inc., 1992), p. 2-14.

6. Milsap, et al, pp. 2-14, 2-15.

7. Herrington, Carolyn D., and Martin Orland, "Politics and Federal Aid to Urban School Systems: The Case of Chapter One," in Politics of Education Association Yearbook 1991, p. 177.

8. ED, Reinventing Chapter 1, p. 53.

9. Ibid., pp. 208-209.

10. Milsap, pp. 5-7, 5-10.

11. ED, Reinventing Chapter 1, p. 183.

12. Roughly another $300 million a year of Chapter 1 funds go into non-federal administration of the program (states: $60 million; local school districts: $240 million). Of 11 categories of administrative requirements in the Chapter 1 law and regulation, district coordinators ranked the following as most burdensome: evaluation procedures; needs assessment procedures; and ranking and selecting students. Eliminating the federal requirements for annual, norm- referenced testing would transform these activities. Milsap, et al, pp. 1-30, 6-17, 18.

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