Research Report Small and Sparse
Defining Rural School Districts for K–12 Funding
Emily Gutierrez, Fanny Terrones
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Rural districts face different obstacles than their urban counterparts, such as higher transportation and education costs and a frequent lack of resources. Policymakers and researchers often rely on National Center for Education Statistics (NCES) definitions of rurality to identify, understand, and support the needs of rural districts, but some states define rural districts using unique definitions based on enrollment sizes and student density.

In this report, we examine the NCES definitions of rurality—the predominant avenue of federal funding for rural districts—and compare these definitions with how states define rurality in their own funding formulas. We examine how these definitions vary by district demographics, staffing, revenues, and expenditures.

Why this matters

The NCES definition of rurality fails to directly account for enrollment and sparsity characteristics, two factors that greatly affect district needs. Including these types of characteristics can help policymakers more effectively assess need, and states should examine their current definitions and policies for information on the actual differences in the costs of educating students who attend small and geographically remote districts.

What we found

Districts that enroll relatively fewer students spend more per student to cover overhead costs, and NCES rural and sparse definitions of rurality do not necessarily identify districts with low enrollments. Solely relying on NCES rural or sparsity definitions might not direct dollars to districts most in need. More than half of states provide additional monetary support to districts with rural, small, or sparse characteristics, and federal programs offer states flexibility to use either NCES or state agency definitions of rurality. In some states, more districts can be eligible for funding under NCES definitions, while in others, more districts can be eligible under enrollment or density-based definitions. These definitions identify rural districts where students of color make up the majority differently and should be carefully considered to ensure equitable funding practices. 

National Center for Education Statistics Detail of Rural Districts 2018

Accounting for local district characteristics can better direct dollars to districts in need. Our analysis comparing definitions, characteristics, revenues, and expenditures point to the following recommendations:

  • States should consider incorporating a “small” school district component into support systems, either for the first time or in addition to other components.
  • States should reevaluate (or evaluate for the first time) which definitions determine eligibility for funding.
  • Researchers should consider the geographic context of their research and which definitions of rurality are most appropriate.

How we did it

The report uses data on school- and district-level characteristics combined with district-level revenue and expenditures from the Common Core of Data (CCD) for the 2018–19 school year. We match our school-level data to the Urban Institute’s geographic local education agency (LEA) IDs and the Missouri Census Data Center’s Geocorr 2018 data to obtain land-per-square-mile data for each geographic LEA ID. We also collect information on state funding practices for rural, small, and sparse districts and use this information to inform national definitions of small and sparse.

Research Areas Education
Tags K-12 education School funding Rural people and places
Policy Centers Center on Education Data and Policy