Federal Policy Options for Improving the Education of Low-Income Students

Volume III. Countering Inequity in School Finance

by Stephen M. Barro

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Despite the intent of the law, Chapter 1 participants in the poorer, fiscally less able states and school districts are likely to have less spent on their education than students in better-funded districts. The federal government's only serious option for reducing these differences among states is to establish a large-scale program of federal general aid to education that would offer financial incentives to those states that meet standards of interdistrict fiscal equality. This report describes how these incentives could be structured and also suggests ways to redistribute existing funding to improve the position of disadvantaged children.

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