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Funding Principles

Increase High School Completion

Funding Principles

How Can States Invest in Increasing High School Graduation?

·         Target state dollars to high school improvement and dropout prevention efforts. States can earmark funds in student aid formula grants to districts, create dedicated funding streams or offer competitive grants to support efforts. States differ in the level of flexibility they grant to districts in either approach. Ohio requires that $1 million of its school funding formula funds  be set aside to fund the Jobs for Ohio’s Graduates  program. California’s Pupil Retention block grant provides flexible funding to school districts for dropout prevention efforts. North Carolina’s competitive Dropout Prevention Grants seed innovative efforts with the potential for replication in other middle schools and high schools.[1]

·         Invest in proven interventions.  The best way to ensure fiscal responsibility is to invest in what works. Texas focuses state and federal resources on identifying and replicating a comprehensive array of proven strategies  for dropout prevention and recovery.

·         Focus funding on high priority groups.  Beginning with investments in more robust data systems, states can use early warning data to target interventions to high need students and schools. States could then track and monitor student progress and school outcomes to evaluate the impact and quantify the cost benefit ratio of various strategies. Districts in Wisconsin with 30 or more dropouts or a dropout rate exceeding 5 percent of its total high school enrollment can apply for supplemental state aid  to support students in grades 5 to 12 who are at risk of not graduating from high school or have dropped out.

·         Provide school principals with greater budget autonomy. In traditional public schools, principals are rarely given control over a significant amount of their school’s budget.  However, research shows  that in high-performing, high-poverty schools principal discretion over resources is a critical factor to schools’ success.  The school district of Houston, Texas, where site-based budgeting has been in place since 1992-1993, has been recognized nationally for the progress its students have made.

·         Maximize federal funds.  States can consider how to maximize and/or supplement federal funding sources that support high school graduation and dropout prevention. In FY 2010 the federal government invested almost $10 billion to support reform in states and local communities.

·         Maximize youth development resources. Outside of K-12 funding streams, significant state and federal dollars are targeted to improve outcomes for youth (as a whole or for specific subgroups of youth such as those in foster care, teen parents, youth with disabilities and others). For example, 15 percent of Workforce Investment Act Title I funds are set aside for expenditures by the governor’s office for statewide activities, including efforts to help reconnect dropouts to school.[2] In Massachusetts, the Connecting Activities  initiative uses supports the statewide school-to-career learning experiences for high school students using funds from work force investment boards.

·         Leverage private funding. T he North Carolina New Schools Project  (NCNSP) is a statewide public-private partnership that sparks and supports innovation in secondary schools.  

 [1] Almeida, Cheryl, et al, Six Pillars of Effective Dropout Prevention and Recovery: An Assessment of Current State Policy and How to Improve It, (Boston: Jobs for the Future, September 2010). Available online

 [2] Princiotta, Daniel and Reyna, Ryan Achieving Graduation for All: A Governor’s Guide to Dropout Prevention and Recovery (Washington, DC: National Governors Association Center for Best Practices, 2009). Available online.


Guidance on high school reform resources in the American Reinvestment and Recovery Act.


Learn more about leveraging federal funding for longitudinal data systems.


The ROI on Early College High Schools has been calculated for students, parents and states, demonstrating a significant return for all in the short and long term.