Schools and States Need a More Accurate Measure of Student Poverty
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Schools and States Need a More Accurate Measure of Student Poverty

The increased use of federal government initiatives by schools will result in a widening disparity between the allocation of resources and the actual student-needs the resources are intended to address.

Researchers, government officials, and state legislators have long understood that students from low-income backgrounds tend to lag behind their more affluent peers when it comes to educational outcomes. These same students also require additional resources to address the unique disadvantages that they face.

To overcome these challenges, 41 state school finance systems nationwide allocate funds in proportion to the number or concentration of students in poverty within a school district. This approach raises an important question for state policy-makers: how do we accurately identify or estimate the number of economically disadvantaged students in a school district without overburdening the administrative resources of schools and districts?

For decades, most states had a simple answer — the National School Lunch (NSL) program. This federal program provides children from families with incomes under 130 percent of the federal poverty line with free meals. It also provides reduced-price meals to those families with incomes between 130 percent and 185 percent of the federal poverty line.

As students must fill out an application to be eligible to receive their free or subsidized meals, states can simply allocate more funding to school districts based on the number or proportion of NSL-eligible students that school educates. While some states allocated additional funds for both the free and reduced-price lunch students, others only allocated additional funds for those eligible for the free lunch.

Although 22 states still rely on NSL-eligibility as their sole metric for determining student poverty, this measure has become increasingly less reliable and more prone to over-identify the number of economically disadvantaged students. This has prompted policymakers and school finance researchers to consider alternative measures for estimating student poverty.

Problems With The NSL-Eligibility Metric

Since its inception as a gauge for student poverty, the NSL-eligibility metric has suffered from key flaws.

First, its thresholds are significantly above the federal poverty line and capture far more families based on income levels than eligibility for other public assistance programs like the Supplemental Nutrition Assistance Program (SNAP) and state-based Medicaid pilot programs. This could mean limited funds earmarked for poverty alleviation are distributed to a larger number of students who suffer from varying levels of household poverty, thereby leaving less money for those who are the most economically disadvantaged.

This generous threshold has prompted disagreement amongst policymakers and researchers about the intent of the funding policy. Some argue that it’s meant to support low-income students and others claim it’s intended to support all students at eligible schools and not just students from low-income families.

Another issue is that students are required to fill out an application form to be eligible, and there’s a significant degree of variation between schools and individual students on the likelihood of completing applications. High school students, for example, are especially unlikely to complete and submit their forms. This in turn can place a significant burden on schools to ensure that eligible students fill out their forms and could mean that already limited staff time is spent on the administrative exercise when it could be better spent on education-related tasks.

In recent years well-intentioned federal government initiatives have allowed schools to avoid the administrative burdens of form completions by automatically certifying all students at a school as NSL-eligible.

CEP (Community Eligibility Program) and Provision 2 are the programs that designate all students as NSL eligible – providing that the school meets certain conditions. CEP requires that 40 percent of students at a school must already be certified as eligible for free lunches through their family’s participation in means-tested government programs such as SNAP. Schools that participate must commit to providing free lunch and breakfast to all students at no cost. Provision 2 is less generous than CEP but still allows school districts to only collect NSL applications from their students once every four years provided that they commit to providing meals to all students at no charge for all four years rather than each year separately.

In order to prevent school districts that subscribe to these initiatives from receiving more funds for economic disadvantage than the actual numbers reflect, some states have moved towards a number of other measures.

While states like Arkansas are still using the potentially outdated NSL application counts which could overestimate the number of low-income children at a particular school, other states flatly use a multiplier of 1.6 to adjust school-level counts of low-income children, a practice that still produces an inaccurate measure of student poverty prevalence. Some states also collect alternative lunch forms at their own cost and without the previous incentives for students and families to complete the forms because the CEP school students are supplied with free or reduced-price lunches regardless of whether they fill out the form.

Without alternative measures for ascertaining student poverty, the increased use of these federal government initiatives by schools nationwide will result in a widening disparity between the allocation of resources and the actual student-needs the resources are intended to address.

For instance, overinflated NSL-eligibility counts that inadvertently include students who aren’t afflicted by poverty can result in inaccurate education-outcome data for low-income students. This could suggest trends in the performance of this sub-group that doesn’t exist in reality. Even more concerning is the potential for fewer funds to be available for students suffering from genuine economic disadvantages while schools with fewer students in poverty receive funds that they wouldn’t otherwise.

Alternative Measures for Determining Student Poverty

In response to these deficiencies, various states have experimented with alternative means of determining the prevalence of poverty among their student populace. Oregon and Pennsylvania are two states that use federal census data to estimate economic disadvantage. New York uses a ‘pupil need index’ which incorporates 65 percent of the students eligible for free or reduced-price lunch under the National School Lunch Program and 65 percent of the students from households below the federal poverty level—also relying on federal census data to make the determination.

However, the most common method is to directly certify students as economically disadvantaged and eligible for poverty funding by looking at their family’s eligibility for other means-tested public assistance programs including SNAP, Temporary Assistance for Needy Families (TANF), or state Medicaid pilots, amongst others. Massachusetts and Delaware are among five states which have replaced NSL-eligibility with direct certification, whilst seven other states, including California and Connecticut, use a combination of NSL-eligibility and direct certification.

While many of these alternatives represent a more accurate measure of student poverty than NSL-eligibility, all come with their own benefits as well as downsides. These alternative assessments and the success of their implementation must be examined to achieve the most accurate measurement of student need.


This commentary previously stated that 26 states rely on NSL-eligibility as their sole metric for determining student poverty and has been corrected to reflect that 22 states use this metric.