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§6337 Education Finance Incentive Grant Program

Title 20 › CHAPTER 70 — STRENGTHENING AND IMPROVEMENT OF ELEMENTARY AND SECONDARY SCHOOLS › SUBCHAPTER I — IMPROVING THE ACADEMIC ACHIEVEMENT OF THE DISADVANTAGED › Part A — Improving Basic Programs Operated by Local Educational Agencies › subpart 2 — allocations › § 6337

Last updated Sep 23, 2026|Official source

Summary

The Secretary gives grants to States from allotted funds so States can run the programs under this part. Each State’s share is based on how many children it counts and three factors multiplied together: a base amount tied to the national average per-pupil spending (Puerto Rico gets a special 34% rule and the base overall cannot be less than 34% or more than 46% of that average), a State “effort” factor (kept between 0.95 and 1.05 and calculated from 3-year spending and income averages; Puerto Rico uses the lowest effort factor), and 1.30 minus the State’s “equity” factor (the equity factor is a calculated measure of how evenly spending is spread across local districts). Each State must get at least the lesser of 0.35% of the total funds or a formula that averages 0.35% and 150% of the national average grant per child multiplied by the State’s child count. States must pass the money to eligible local educational agencies (LEAs) and then to schools only for the covered activities. An LEA is eligible if it has at least 10 counted children and those children are at least 5% of the LEA’s 5–17 year-old population. How much each LEA gets is based on “weighted child counts” using one of three weight schedules, chosen by the State, that depend on the State’s equity factor (<0.10, 0.10–<0.20, or ≥0.20); in each case the Secretary uses the larger of two methods (weights by percent of children or by number of children), and higher weights go to areas with higher concentrations or larger numbers of counted children. A State must keep its school spending at least 90% of the level from two years earlier or the Secretary will cut its grant in proportion to any failure to meet that test (the Secretary can waive this for disasters, major reorganizations, or steep revenue drops). If available money is too small, the Secretary will reduce LEA payments proportionally and restore them if more funds appear. If funds allow, LEAs are guaranteed not to drop below 95%, 90%, or 85% of their prior-year amount when their counted children are at least 30%, between 15% and 30%, or below 15% of their 5–17 population, respectively. The hold-harmless rules apply only to this program.

Title 20, §6337

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(a)Grants

From funds made available under section 6332(a) of this title the Secretary is authorized to make grants to States, from allotments under subsection (b), to carry out the programs and activities of this part.

(b)Distribution based upon fiscal effort and equity

(1)In general

(A)In general

Except as provided in subparagraph (B), funds made available for any fiscal year to carry out this section shall be allotted to each State based upon the number of children counted under section 6333(c) of this title in such State multiplied by the product of— (i)

(ii)such State’s effort factor described in paragraph (2); multiplied by

(iii)1.30 minus such State’s equity factor described in paragraph (3).

(B)State minimum

Notwithstanding any other provision of this section or section 6332 of this title, from the total amount available for any fiscal year to carry out this section, each State shall be allotted at least the lesser of— (i)

(ii)the average of—

(I)0.35 percent of the total amount available to carry out this section; and

(II)150 percent of the national average grant under this section per child described in section 6333(c) of this title, without application of a weighting factor, multiplied by the State’s total number of children described in section 6333(c) of this title, without application of a weighting factor.

(2)Effort factor (3) Equity factor

(A)In general

Except as provided in subparagraph (B), the effort factor for a State shall be determined in accordance with the succeeding sentence, except that such factor shall not be less than 0.95 nor greater than 1.05. The effort factor determined under this sentence shall be a fraction the numerator of which is the product of the 3-year average per-pupil expenditure in the State multiplied by the 3-year average per capita income in the United States and the denominator of which is the product of the 3-year average per capita income in such State multiplied by the 3-year average per-pupil expenditure in the United States.

(B)Commonwealth of Puerto Rico

The effort factor for the Commonwealth of Puerto Rico shall be equal to the lowest effort factor calculated under subparagraph (A) for any State.

(c)Use of funds; eligibility of local educational agencies

All funds awarded to each State under this section shall be allocated to local educational agencies under the following provisions. Within local educational agencies, funds allocated under this section shall be distributed to schools on a basis consistent with section 6313 of this title, and may only be used to carry out activities under this part. A local educational agency in a State is eligible to receive a targeted grant under this section for any fiscal year if—

(1)the number of children in the local educational agency counted under section 6333(c) of this title, before application of the weighted child count described in paragraph (3), is at least 10; and

(2)if the number of children counted for grants under section 6333(c) of this title, before application of the weighted child count described in paragraph (3),1 is at least 5 percent of the total number of children aged 5 to 17 years, inclusive, in the school district of the local educational agency.

For any fiscal year for which the Secretary allocates funds under this section on the basis of counties, funds made available as a result of applying this subsection shall be reallocated by the State educational agency to other eligible local educational agencies in the State in proportion to the distribution of other funds under this section.

(d)Allocation of funds to eligible local educational agencies

Funds received by States under this section shall be allocated within States to eligible local educational agencies on the basis of weighted child counts calculated in accordance with paragraph (1), (2), or (3), as appropriate for each State.

(1)States with an equity factor less than .10

In States with an equity factor less than .10, the weighted child counts referred to in subsection (d) shall be calculated as follows:

(A)Weights for allocations to counties

(i)In general

For each fiscal year for which the Secretary uses county population data to calculate grants, the weighted child count used to determine a county’s allocation under this section is the larger of the two amounts determined under clauses (ii) and (iii).

(ii)By percentage of children

The amount referred to in clause (i) is determined by adding—

(I)the number of children determined under section 6333(c) of this title for that county who constitute not more than 15.00 percent, inclusive, of the county’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children who constitute more than 15.00 percent, but not more than 19.00 percent, of such population, multiplied by 1.75;

(III)the number of such children who constitute more than 19.00 percent, but not more than 24.20 percent, of such population, multiplied by 2.5;

(IV)the number of such children who constitute more than 24.20 percent, but not more than 29.20 percent, of such population, multiplied by 3.25; and

(V)the number of such children who constitute more than 29.20 percent of such population, multiplied by 4.0.

(iii)By number of children

The amount referred to in clause (i) is determined by adding

(I)the number of children determined under section 6333(c) of this title who constitute not more than 2,311, inclusive, of the county’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children between 2,312 and 7,913, inclusive, in such population, multiplied by 1.5;

(III)the number of such children between 7,914 and 23,917, inclusive, in such population, multiplied by 2.0;

(IV)the number of such children between 23,918 and 93,810, inclusive, in such population, multiplied by 2.5; and

(V)the number of such children in excess of 93,811 in such population, multiplied by 3.0.

(B)Weights for allocations to local educational agencies

(i)In general

For each fiscal year for which the Secretary uses local educational agency data, the weighted child count used to determine a local educational agency’s grant under this section is the larger of the two amounts determined under clauses (ii) and (iii).

(ii)By percentage of children

The amount referred to in clause (i) is determined by adding—

(I)the number of children determined under section 6333(c) of this title for that local educational agency who constitute not more than 15.58 percent, inclusive, of the agency’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children who constitute more than 15.58 percent, but not more than 22.11 percent, of such population, multiplied by 1.75;

(III)the number of such children who constitute more than 22.11 percent, but not more than 30.16 percent, of such population, multiplied by 2.5;

(IV)the number of such children who constitute more than 30.16 percent, but not more than 38.24 percent, of such population, multiplied by 3.25; and

(V)the number of such children who constitute more than 38.24 percent of such population, multiplied by 4.0.

(iii)By number of children

The amount referred to in clause (i) is determined by adding—

(I)the number of children determined under section 6333(c) of this title who constitute not more than 691, inclusive, of the agency’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children between 692 and 2,262, inclusive, in such population, multiplied by 1.5;

(III)the number of such children between 2,263 and 7,851, inclusive, in such population, multiplied by 2.0;

(IV)the number of such children between 7,852 and 35,514, inclusive, in such population, multiplied by 2.5; and

(V)the number of such children in excess of 35,514 in such population, multiplied by 3.0.

(2)States with an equity factor greater than or equal to .10 and less than .20

In States with an equity factor greater than or equal to .10 and less than .20, the weighted child counts referred to in subsection (d) shall be calculated as follows:

(A)Weights for allocations to counties

(i)In general

(ii)By percentage of children

The amount referred to in clause (i) is determined by adding—

(II)the number of such children who constitute more than 15.00 percent, but not more than 19.00 percent, of such population, multiplied by 1.5;

(III)the number of such children who constitute more than 19.00 percent, but not more than 24.20 percent, of such population, multiplied by 3.0;

(IV)the number of such children who constitute more than 24.20 percent, but not more than 29.20 percent, of such population, multiplied by 4.5; and

(V)the number of such children who constitute more than 29.20 percent of such population, multiplied by 6.0.

(iii)By number of children

The amount referred to in clause (i) is determined by adding—

(I)the number of children determined under section 6333(c) of this title who constitute not more than 2,311, inclusive, of the county’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children between 2,312 and 7,913, inclusive, in such population, multiplied by 1.5;

(III)the number of such children between 7,914 and 23,917, inclusive, in such population, multiplied by 2.25;

(IV)the number of such children between 23,918 and 93,810, inclusive, in such population, multiplied by 3.375; and

(V)the number of such children in excess of 93,811 in such population, multiplied by 4.5.

(B)Weights for allocations to local educational agencies

(i)In general

(ii)By percentage of children

The amount referred to in clause (i) is determined by adding—

(II)the number of such children who constitute more than 15.58 percent, but not more than 22.11 percent, of such population, multiplied by 1.5;

(III)the number of such children who constitute more than 22.11 percent, but not more than 30.16 percent, of such population, multiplied by 3.0;

(IV)the number of such children who constitute more than 30.16 percent, but not more than 38.24 percent, of such population, multiplied by 4.5; and

(V)the number of such children who constitute more than 38.24 percent of such population, multiplied by 6.0.

(iii)By number of children

The amount referred to in clause (i) is determined by adding—

(I)the number of children determined under section 6333(c) of this title who constitute not more than 691, inclusive, of the agency’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children between 692 and 2,262, inclusive, in such population, multiplied by 1.5;

(III)the number of such children between 2,263 and 7,851, inclusive, in such population, multiplied by 2.25;

(IV)the number of such children between 7,852 and 35,514, inclusive, in such population, multiplied by 3.375; and

(V)the number of such children in excess of 35,514 in such population, multiplied by 4.5.

(3)States with an equity factor greater than or equal to .20

In States with an equity factor greater than or equal to .20, the weighted child counts referred to in subsection (d) shall be calculated as follows:

(A)Weights for allocations to counties

(i)In general

(ii)By percentage of children

The amount referred to in clause (i) is determined by adding—

(II)the number of such children who constitute more than 15.00 percent, but not more than 19.00 percent, of such population, multiplied by 2.0;

(III)the number of such children who constitute more than 19.00 percent, but not more than 24.20 percent, of such population, multiplied by 4.0;

(IV)the number of such children who constitute more than 24.20 percent, but not more than 29.20 percent, of such population, multiplied by 6.0; and

(V)the number of such children who constitute more than 29.20 percent of such population, multiplied by 8.0.

(iii)By number of children

The amount referred to in clause (i) is determined by adding—

(I)the number of children determined under section 6333(c) of this title who constitute not more than 2,311, inclusive, of the county’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children between 2,312 and 7,913, inclusive, in such population, multiplied by 2.0;

(III)the number of such children between 7,914 and 23,917, inclusive, in such population, multiplied by 3.0;

(IV)the number of such children between 23,918 and 93,810, inclusive, in such population, multiplied by 4.5; and

(V)the number of such children in excess of 93,811 in such population, multiplied by 6.0.

(B)Weights for allocations to local educational agencies

(i)In general

(ii)By percentage of children

The amount referred to in clause (i) is determined by adding—

(II)the number of such children who constitute more than 15.58 percent, but not more than 22.11 percent, of such population, multiplied by 2.0;

(III)the number of such children who constitute more than 22.11 percent, but not more than 30.16 percent, of such population, multiplied by 4.0;

(IV)the number of such children who constitute more than 30.16 percent, but not more than 38.24 percent, of such population, multiplied by 6.0; and

(V)the number of such children who constitute more than 38.24 percent of such population, multiplied by 8.0.

(iii)By number of children

The amount referred to in clause (i) is determined by adding—

(I)the number of children determined under section 6333(c) of this title who constitute not more than 691, inclusive, of the agency’s total population aged 5 to 17, inclusive, multiplied by 1.0;

(II)the number of such children between 692 and 2,262, inclusive, in such population, multiplied by 2.0;

(III)the number of such children between 2,263 and 7,851, inclusive, in such population, multiplied by 3.0;

(IV)the number of such children between 7,852 and 35,514, inclusive, in such population, multiplied by 4.5; and

(V)the number of such children in excess of 35,514 in such population, multiplied by 6.0.

(e)Maintenance of effort

(1)In general

A State is entitled to receive its full allotment of funds under this section for any fiscal year if the Secretary finds that the State’s fiscal effort per student or the aggregate expenditures of the State with respect to the provision of free public education by the State for the preceding fiscal year was not less than 90 percent of the fiscal effort or aggregate expenditures for the second preceding fiscal year, subject to the requirements of paragraph (2).

(2)Reduction in case of failure to meet

(A)In general

The Secretary shall reduce the amount of the allotment of funds under this section for any fiscal year in the exact proportion by which a State fails to meet the requirement of paragraph (1) by falling below 90 percent of both the fiscal effort per student and aggregate expenditures (using the measure most favorable to the State), if such State has also failed to meet such requirement (as determined using the measure most favorable to the State) for 1 or more of the 5 immediately preceding fiscal years.

(B)Special rule

No such lesser amount shall be used for computing the effort required under paragraph (1) for subsequent years.

(3)Waiver

The Secretary may waive the requirements of this subsection if the Secretary determines that a waiver would be equitable due to—

(A)exceptional or uncontrollable circumstances, such as a natural disaster or a change in the organizational structure of the State; or

(B)a precipitous decline in the financial resources of the State.

(f)Adjustments where necessitated by appropriations

(1)In general

If the sums available under this section for any fiscal year are insufficient to pay the full amounts that all local educational agencies in States are eligible to receive to carry out this section for such year, the Secretary shall ratably reduce the allocations to such local educational agencies, subject to paragraphs (2) and (3).

(2)Additional funds

If additional funds become available for making payments under this section for such fiscal year, allocations that were reduced under paragraph (1) shall be increased on the same basis as they were reduced.

(3)Hold-harmless amounts

For each fiscal year, if sufficient funds are available, the amount made available to each local educational agency under this section shall be—

(A)not less than 95 percent of the amount made available for the preceding fiscal year if the number of children counted for grants under section 6333 of this title is not less than 30 percent of the total number of children aged 5 to 17 years, inclusive, in the local educational agency;

(B)not less than 90 percent of the amount made available for the preceding fiscal year if the percentage described in subparagraph (A) is between 15 percent and 30 percent; and

(C)not less than 85 percent of the amount made available for the preceding fiscal year if the percentage described in subparagraph (A) is below 15 percent.

(4)Applicability

Notwithstanding any other provision of law, the Secretary shall not take into consideration the hold-harmless provisions of this subsection for any fiscal year for purposes of calculating State or local allocations for the fiscal year under any program administered by the Secretary other than a program authorized under this part.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 6337, Pub. L. 89–10, title I, § 1126, as added Pub. L. 103–382, title I, § 101, Oct. 20, 1994, 108 Stat. 3577, related to special allocation procedures, prior to the general amendment of this subchapter by Pub. L. 107–110. See section 6338 of this title. A prior section 1125A of Pub. L. 89–10 was classified to section 6336 of this title, prior to the general amendment of this subchapter by Pub. L. 107–110.

Amendments

2015—Subsec. (a). Pub. L. 114–95, § 1017(1), substituted “funds made available under section 6332(a) of this title” for “funds appropriated under subsection (f) of this section”. Subsec. (b)(1)(A). Pub. L. 114–95, § 1017(2)(A), substituted “funds made available for any fiscal year to carry out this section” for “funds appropriated pursuant to subsection (f) of this section” in introductory provisions. Subsec. (b)(1)(B)(i). Pub. L. 114–95, § 1017(2)(B), substituted “the total amount reserved under section 6332(a) of this title to carry out this section” for “total appropriations”. Subsec. (c). Pub. L. 114–95, § 1017(3), redesignated pars. (A) and (B) as (1) and (2), respectively. Subsec. (d)(1)(A)(ii). Pub. L. 114–95, § 1017(4), struck out opening quotation marks before “(i)” in introductory provisions. Subsec. (e). Pub. L. 114–95, § 1017(5), added subsec. (e) and struck out former subsec. (e) which related to general rule for full allotment of funds, reduction of funds in any fiscal year where State fails to meet requirements, and equitable waiver of requirements for 1 fiscal year only. Subsec. (f). Pub. L. 114–95, § 1017(6), (7), redesignated subsec. (g) as (f) and struck out former subsec. (f). Prior to amendment, text of subsec. (f) read as follows: “There are authorized to be appropriated to carry out this section such sums as may be necessary for fiscal year 2002 and for each of the 5 succeeding fiscal years.” Subsec. (f)(1). Pub. L. 114–95, § 1017(8)(A), substituted “to carry out this section” for “under this section”. Subsec. (f)(3). Pub. L. 114–95, § 1017(8)(B), substituted “shall be—” for “shall be” in introductory provisions. Subsec. (g). Pub. L. 114–95, § 1017(7), redesignated subsec. (g) as (f).

Statutory Notes and Related Subsidiaries

Effective Date

of 2015 AmendmentAmendment by Pub. L. 114–95 effective Dec. 10, 2015, except with respect to certain noncompetitive programs and competitive programs, see section 5 of Pub. L. 114–95, set out as a note under section 6301 of this title.

§6337 Education Finance Incentive Grant Program

Summary

Title 20, §6337

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Citations & Metadata