Transformative, Evidence-Based Ideas

  • Home
  • |
  • Publications
  • |
  • It’s time for a new grand bargain that ends school funding based on seat time

It’s time for a new grand bargain that ends school funding based on seat time

The COVID-19 pandemic exposed fatal flaws in the way states fund education—based on the time students sit in school, rather than on the quality of instruction. 

It is time for a new grand bargain in which states offer schools much greater flexibility on where, when, and how students are taught, and, in exchange, states fund schools based on the quality of the instruction they provide to students. 

Most states fund schools based on measures of enrollment or attendance, and require schools to deliver a certain number of hours of instruction. 

Before the pandemic, instruction only counted if students were physically present at school, working directly with a teacher. A teacher lecturing to students in school counted, but students watching a YouTube video of that same lecture at home did not. Similarly, states provided funding when students worked independently on a computer at school, but not if that student did the same activity at home.

When millions of students were suddenly forced to learn online last spring, these rules fell apart. States had to waive them, basically saying anything goes. Now, in the new school year, many schools remain at least partially closed, and states are struggling to develop more meaningful rules.

Some states, like Florida and North Carolina, are funding districts based on pre-pandemic student counts. This avoids penalizing districts for factors beyond their control and gives greater financial predictability amid massive enrollment fluctuations. However, districts have no incentive to reach out to thousands of missing students, many of whom are vulnerable and suffering learning loss and trauma. Meanwhile, this policy decreases resources for schools and districts that have seen large increases in enrollment because they offer instruction that parents and students prefer. Students benefit when funding fully follows them to the school of their choice, and cash-starved states will likely want to prioritize students actually getting services rather than “phantom” students no longer enrolled in a district.

In other states, such as Texas, districts must show that students log into their computers or turn in an assignment each day. Yet, multitasking students can log into their computers for a few minutes each day while playing video games at the same time, which still counts for school funding purposes. In California, districts are expected to calculate the “time value” of each online assignment. Similarly, districts in Colorado must calculate the seat-time “equivalency” of any remote learning. An assignment may have a time value of one hour for a hypothetical student. Schools will receive full state funding for that hour for each student they enroll, even if none of their students actually complete the assignment successfully.

In short, these new rules fail to incentivize high-quality remote instruction, which remains a significant challenge across the country. It is time to fundamentally rethink seat-time funding rules to reflect the nature of instruction we expect for students during the pandemic and afterwards. As Ohio state superintendent of public instruction Paola DeMario recently said, “We need to take our thinking to the next level.”

The bargain breaks down in 21st-century schools

The original bargain between states, schools, and teachers assumed teachers stood in front of homogeneous classrooms of students for a minimum number of days each school year. States calculated the cost of delivering instruction under that assumption. They attempted to differentiate funding based on student need, and adopted byzantine pupil counting manuals to prevent schools from cutting corners. Students learned outside of school through homework, but because there was no cost associated with it, states did not count that time.

Even pre-pandemic, better understanding of strong pedagogy and new technologies uprooted this approach. Whole-group instruction is not well-suited in a classroom of increasingly diverse students, each of whom is at a different place in the curriculum and has unique needs. Indeed, more schools are moving to personalized, competency-based learning. If students have not mastered material at the end of a semester, they get more time, rather than being pushed through the system. Teachers still help shape curricula, deliver instruction, and assess student learning. But they might not be standing in front of a classroom every day. 

Learning can take place anywhere—in school, in the community, and at home. A growing number of school systems award credit for learning that takes place outside school through internships, volunteer activities, and independent study projects. Students might demonstrate the value of these learning experiences by passing an assessment, completing a project, or earning an industry certification.

In short, calculating funding in a way that assumes learning only happens when students are in classrooms and receiving instruction directly from teachers no longer makes sense, yet it remains the predominant school funding approach.

The pandemic has forced states to create workarounds. This gives us an opportunity to change the way we fund schools to maximize student learning. 

Toward a new grand bargain

A new grand bargain between states, schools, and teachers is needed to replace seat-time funding. The state’s share of public education spending has returned to pre-great recession highs. In 22 states, the state is the source of more than half of all K–12 revenue. This gives states more power to hold school districts financially accountable for student learning. Under the new bargain, districts will be afforded more flexibility over how to spend state funding, allowing them to educate students in a more dynamic and complex network of learning opportunities.

Utah is taking significant steps in this direction. Instead of using traditional seat time, districts can identify “learner validated” enrollment measures, which can include an assortment of options. However, districts can still use flawed measures like student logins, and the state provides no guidance on how much student progress is sufficient to earn funding. 

As a longer-term replacement to traditional seat-time funding, states can learn from the approach New Hampshire has taken with its online charter school, called VLACS, which is funded entirely on the percentage of assignments a student successfully completes. If a course has ten assignments and a student finishes seven of them, VLACS gets 70 percent of the funding.

One concern is that districts will simply pass every student to get the money. States can require assurances from districts and use audits to ensure students who receive passing grades have earned them. With VLACS, many students actually take longer to master the material, such that the state pays substantially less than it would under traditional seat-time rules. 

Another concern is that this kind of funding system might penalize districts that serve vulnerable students who may not have computers, internet access, or home environments conducive to learning. This concern is addressed by providing substantially more funding for the success of students with greater needs, like Texas did when rewarding districts for success in college, career, and military readiness.

By designing the new school funding system carefully, states can promote quality instruction—both during the pandemic, as millions of students continue learning outside traditional classrooms, and afterwards. It is possible to tie funding to learning outcomes in ways that are affordable for state taxpayers, predictable for legislatures, and equitable for all students. 

By giving schools and districts greater flexibility in return for accountability, states can move toward an education approach better suited for the 21st century.


Larry Miller is a research affiliate at the Center on Reinventing Public Education and Interim Vice President of Learning and Workforce Development at Greenville Technical College. Matthew H. Joseph is the policy director for funding at the Foundation for Excellence in Education. 

A shorter, modified version of this article first appeared in Education Next.

Skip to content