This study focuses on three areas: First it explains how funds for Title I of the Elementary and Secondary Education Act are allocated. Second, it contrasts an achievement-based funding procedure, the CEMREL study, with the present poverty-based funding procedure, and third, it describes other ongoing research in this area. The formula currently used in allocating funds through Title I uses counts of economically deprived children. The total allocation received by a county is obtained from the number of eligibles by the allocation per child. The CEMREL study considers the issue of giving out Title I funds on the basis of educational disadvantage rather than economic disadvantage. It suggests that counts of low-achieving children could replace counts of economically disadvantaged children in the current formula. A related NIE project is examining the feasibility and effects of a number of alternative methods of allocating funds within districts. Educational need is not the only funding alternative under study. A set of mandated studies "The Measure Poverty" series, conducted by other parts of HEW has addressed the inadequacies of the current poverty measure. (Author/AM)