The ACE Act (All Children are Equal Act) changes how the federal government distributes education funding to school districts. Right now, the government uses two different methods to calculate how much money each school district gets: one based on the percentage of poor students in the district, and another based on the total number of poor students. Whichever method gives a district more money is the one that gets used. This system has an unintended consequence—it favors large school districts even when they don't have high poverty rates, while hurting smaller districts that have high poverty rates but fewer total students. For example, a small rural district with 80% of students in poverty might lose funding to a large urban district with only 20% poverty, simply because the large district has more students overall. This bill fixes that problem by eliminating the "choose whichever method benefits you most" approach. Starting in fiscal year 2026, all school districts will use only the percentage-based method, which ensures that funding goes to districts based on how concentrated poverty is there, not just how many poor students they have in absolute numbers. This change will redirect federal education dollars toward smaller, high-poverty districts that have been disadvantaged under the current system.

To amend the weights used to determine amounts for targeted grants and education finance incentive grants for local educational agencies under title I of the Elementary and Secondary Education Act of 1965.