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April 13, 2016

Money Matters in Education

Policymakers and concerned residents often ask if increased spending really improves student performance, particularly for those students who are struggling most. Well, a new study shows increased spending in low-income school districts raises the test scores of their students and reduces achievement gaps.

The study, which has significant implications for Virginia’s schools, provides a national perspective – with data from 27 states – on the impact of school funding on student achievement between 1990 and 2013. The researchers find that school funding reforms that increased state investments in schools raised both the absolute and the relative achievement of students in low-income districts, meaning these students improved and started to catch up to their peers in wealthier districts.

The impact of spending on student performance was gradual, not immediate. This makes sense, since tests measure a student’s cumulative knowledge and it, therefore, takes some time to improve. It also helps explain why other studies that look at the immediate impact of spending on performance may have different or less clear findings.

The study also shows the important role that states can play in targeting support to school districts with lower-income students, and identifies that “the state funding formula is the main policy tool available to address inequities in academic outcomes.”

That observation is particularly important for Virginia, since another recent report gives Virginia an “F” rating for the fairness of its funding distribution to schools, behind all but nine other states. The study, released by Rutgers University, bases this grade on the distribution of funding across local school divisions relative to student poverty. And their findings correspond with data from the National Center for Education Statistics that shows that state and local governments in Virginia spend about one-sixth less per student in the state’s poorest communities than in the wealthiest– one of the worst divides in the nation.

This legislative session lawmakers voiced concern that Virginia is failing to provide a high quality education to all its students. The new study that finds low-income students benefit from increased state funding shows that our lawmakers can play an important part in helping to solve this problem in the coming years by investing more in schools and targeting more funds to divisions in Virginia with lower-income students. They made progress in the budget they recently approved by restoring some of the support cut from schools during the recession, but they did not appropriately target the restored funding to high-poverty school divisions, meaning more work needs to be done in the coming years.

While money alone is not the answer for fixing the challenges facing low-income schools, it’s a necessary component. As the researchers state: “our findings show that money can and does matter in education.”


Chris Duncombe

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