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Five Reasons Policymakers Now Think Money Should No Longer 'Follow Students'

The coronavirus pandemic has caused student enrollment to fluctuate so dramatically that it's now inevitable that thousands of districts will lose millions of dollars in funding next year based on how many students actually show up to class.

As anxious administrators scramble this month to find students who have gone missing, a growing number of policymakers have urged states to finally update byzantine funding formulas that prescribe how much money districts get based on enrollment. 

Urban districts inundated by charter schools and rural districts bordering high-flying suburban districts that serve as enrollment magnets have long suffered financially from states' insistence that money follow the students. But their constituents could never muster enough political power to fight charter school advocates and wealthy communities that have financially benefitted from having a growing student body. 

Many researchers and advocates in the school finance world say enrollment loss this year could bolster arguments for overhauling systems that link enrollment to funding. Some alternatives include providing districts money based on when a student successfully completes a course, or on an average of attendance spread out over several years. (Some, but not all, states already use this method.) 

Along with their push for the expansion of charter schools and vouchers, U.S. Secretary of Education Betsy DeVos and other conservatives, have argued that money should more closely follow students.  Most states already heavily account for enrollment in their funding formulas, though some states' rules are more stringent than other states'.

Here are some arguments urban and rural schools in recent decades have used against having the money follow enrollment: 

1. There's big layoff damage from enrollment-driven cuts. Most of districts' money is caught up in personnel costs. When districts lose thousands of students at once and subsequently lose millions of dollars, administrators are forced to conduct mass layoffs, which could devastate districts' central enterprise of teaching and learning. In many instances, layoffs cut into required services such as counselors, and special education services. This has a compounding effect since parents in the fall can return to find a subpar school and decide to enroll their child in a neighboring district or local charter school, resulting in the district losing even more money.  

2. Taking attendance is exceedingly difficult. Many states have what's known as "student-count" days where districts get however much money for however many students showed up for one day in the fall. This has caused administrators a lot of anxiety in the past—they've tried ploys like ice cream socials and rap concerts to pack the kids in for roll call.  But, as is the case this year, lots of students are checking in periodically with teachers online or on the phone or via e-mail throughout the school year, meaning that actual enrollment is much higher than what appears on student-count day. One of the more dynamic policy debates this year is how to take attendance so that students are regularly accounted for and districts get their fair share of money.  

3. Parents are bombarded with more choices than ever before. When most of state's current funding formulas were crafted (on average, around 20 years ago), options like vouchers, charter schools, and dual-enrollment programs were far less common. The internet has opened up a valve giving parents more information, and legislatures have allowed them to transfer their children more quickly. While many argue that's beneficial for parents and children, it's made long-term financial planning for districts extremely difficult since they have no idea when parents are going to transfer their children, which would ultimately result in their district losing money. 

4. More and more students don't attend just one school. In the past, it was safe to assume that students would stay at one school throughout the entire school day.  But parents today approach their child's education as more of an a la carte menu, picking and choosing a child's activities throughout the school day.  While a district may provide a student with a set of academic courses in the morning, a student may have the flexibility to enroll in a community college's golf course in the afternoon, for example, or do an internship at a local business. Similarly, home-schooled students want to participate in some public schools' extracurricular activities.  States have struggled trying to figure out if districts should split per-pupil costs with other public programs, or if they should be able to keep all of the costs themselves. This complicates an already complicated fiscal planning process.

5. Districts have struggled to support mobile students, one of the most vulnerable student populations. Homeless, foster, migrant, and low-income students often transfer several times throughout the school year, which can derail their academic outcomes. Districts that serve a highly mobile population have had an exceedingly difficult time paying for social and academic services to support these students. They are also financially punished when the student shows up in the middle of the year after student count day.

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