For decades, free and reduced-price lunch (FRPL) status has been the primary measure for identifying and counting studentswho are facing economic barriers. States have used FRPL counts for critical services such as determining school funding formulas, monitoring accountability, measuring opportunity and achievement gaps, and administering social services. However, since the Community Eligibility Provision (CEP) expanded access to free school meals, fewer schools have collected information on individual students’ eligibility for free or reduced meals. Recent increases in state-led universal free meal programs further complicate this data source.
In response, state policymakers have adopted alternative measurements for economic disadvantage in their K-12 funding formulas. Four common approaches for measuring economic disadvantage are:
- Direct certification in federal benefit programs;
- Data from the U.S. Census Bureau;
- State income tax forms;
- and supplemental family income surveys.
To ease the transition to a new method, states may pilot the new approach in a few districts before implementing the change statewide. In addition, these methods are not mutually exclusive, so states may employ multiple measures to more accurately identify eligible students.
Below, we break down the alternative measurement approaches states are using to measure economic disadvantage.
Direct Certification in Federal Benefit Programs
Direct certification is the most common FRPL alternative. Under this method, students eligible for programs such as Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families (TANF), or the Food Distribution Program on Indian Reservations (FDPIR) are automatically included in the direct certification count. ECS identified at least 20 states and the District of Columbia that use direct certification for identifying economically disadvantaged students.
Advantages of this approach are that it does not place an administrative burden on schools and families as it is already collected for the Community Eligibility Program. Additionally, benefit programs included in direct certification counts use similar income thresholds between free meal programs and SNAP. For instance, households with incomes up to 130% of the federal poverty level qualify for both free meals and SNAP, which is similar to the federal minimum for Medicaid (133% of the federal poverty level). Meanwhile, reduced-price meals eligibility is higher (130%-185% of the federal poverty level).
However, stigma associated with public benefits, distrust of government agencies and misunderstandings about eligibility criteria can lead to underreporting of qualified families who may not enroll. To address these challenges, states may include additional programs, such as Medicaid, to increase the likelihood of identifying eligible students. We have identified at least six states (Colorado, Indiana, Illinois, Louisiana, Massachusetts and South Carolina) that use Medicaid data for direct certification.
Massachusetts’ (MA CH 132 §35NNN 2019) current methodology for direct certification defines students as economically disadvantaged based on their participation in SNAP; Transitional Assistance for Families and Dependent Children; the Department of Children and Families' foster care program; and MassHealth (Medicaid). The Student Opportunity Act also allows districts to use an optional supplemental low-income data collection form to attempt to identify students who are missed in the direct certification process. The form helps identify students who are living in families with incomes up to 185% of the federal poverty level, which is the threshold for eligibility for reduced-price meals.
Census Data
Some states use annual U.S. Census Bureau data from the American Community Survey (ACS) or the Small Area Income and Poverty Estimates (SAIPE) survey to measure economic disadvantage within their communities.
Using census data can reduce administrative burden for state and local officials, as this data is annually collected by the federal government. ACS also provides multiple indicators that states can use to measure economic disadvantage (e.g., family income, employment status and poverty status). Census data is not without its drawbacks as the data:
- May include private and home-schooled school students;
- May be outdated because the U.S. Census publishes one year after collection;
- Provides neighborhood-level poverty rather than specific student household data.
Neighborhood-level poverty data may be less accurate than FRPL data in cases where students attend schools outside of their home district.
Texas H.B. 3 (enacted, 2019) adopted a tiered approach to compensatory funding based on the census block group of students. Using data from the ACS, the census block group tier levels consider: the median household income; the average educational attainment of the population; the percentage of single-parent households; the rate of homeownership; and other economic criteria the commissioner determines. Two independent school districts, Houston and San Antonio, pioneered the approach of using census data from the ACS prior to the state. It was so successful that state leaders adopted a similar method statewide in 2019.
State Income Tax Returns
Using state income tax returns as a measurement of economic disadvantage involves matching students to their parent or guardian’s income tax data collected by the state to determine eligibility. This process requires collaboration between state agencies overseeing taxation and revenue, education, and health and human services. This approach allows states to calculate income eligibility without relying on federal data or participation in federal benefit programs. However, it also requires cooperation across multiple state agencies and could lead to challenges around student data privacy.
New Mexico (N.M. Stat. Ann. § 22-8F-3) was the first state in the country to use state income tax records to allocate need-based funding. The state launched the initiative in 2021 when it adopted the Family Income Index, which directs the Public Education Department to determine the household income of every public school student based on data from the Taxation and Revenue and the Human Services departments as well as the census. To determine household income, the Public Education Department calculates the percentage of students in five income categories, resulting in a ranked list of schools with the highest populations of low-income students.
Alternative Family Income Form
Administered by school districts, these forms gather information on household size and income directly from families. The forms are often used as a supplemental measure to identify economically disadvantaged students. For instance, states may use a family income form along with direct certification to identify students in households that are eligible but not enrolled in SNAP or TANF. The challenges with this approach are specific to families: increased administrative burden and no financial incentives for families to complete the form.
Vermont S. 287 (enacted, 2022) adopted universal free meals for all students and then made that change ongoing through legislation in 2023. In response, the state directed the Agency of Education to develop a Household Income Form to collect data on family income for Vermont students living in families with an income of 185% of the federal poverty level or less.
For more information about state funding formulas address economic disadvantage, including descriptions of weighted funding mechanisms, please see our K-12 School Funding 50-state comparison.
