Pennsylvania has one of the nation’s most inequitably funded public school systems. Some children attend school in 75-year-old buildings with no air conditioning, surrounded by holes in ceilings, gun violence and a lack of basic supplies. However, just one town over, students attend schools with full-equipped music and gym classes, state-of-the-art technology, well-trained staff and new infrastructure.
When walking across City Line Avenue, you pass through row-homes with crumbling walls in Philadelphia County – from one of the poorest cities in the US – to green lawns and big houses in one of the wealthiest suburban counties in the state: Montgomery County. You walk from a county that spends $13,000 per student each year to one that spends $23,000 per student each year.
Redlining has assured that racial and urban disparities in wealth, homeownership and housing value prevail. This has bled into all aspects of affected communities, including school funding.
How These Disparities Came To Be
The Home Owners’ Loan Corporation (HOLC) and the Federal Housing Administration (FHA) were enacted into law by the New Deal in 1933. This attempt to reform the housing market during the Great Depression utilized federal resources to refinance homes and issue loans to prevent widespread foreclosures.
This practice gave the federal government a fundamental role in who and where access to housing was provided, which they used to rate neighborhoods on an “A-D investment worthiness scale,” now known as redlining. This process marked predominantly Black neighborhoods as redlined, or high risk areas for creditworthiness and investment. This has led to lower homeownership rates and home values within highly minority-concentrated urban areas.
Of the $120 billion of loans distributed to prospective homeowners between 1934 and 1962, only 2 % went to non-White applicants. This practice specifically excluded Black Americans from homeownership—the primary path to long-term wealth building. Still today, disparities in housing values often correlate with the race of homeowners due to these discriminatory practices perpetuated by the US federal government via historic redlining.
K-12 public schools are primarily funded by local property taxes, which are derived from home and property values of the area. As a result of redlining, from 1980 to 2015, the average housing value in White neighborhoods increased by $225,000, with the housing value in non-White neighborhoods increasing by only $31,000. Consequently, school districts serving a majority-minority student population on average received 16% less funding from state and local revenue than predominantly White districts. Disproportionate school funding impacts test scores, graduation rates, student earnings in adulthood and postsecondary education outcomes.
The Lasting Legacy of Redlining in Pennsylvania
The disparities born from redlining continue to impact American communities today, almost a century after the passing of the New Deal. Philadelphia, Pennsylvania was heavily redlined and continues to face the consequences as many areas once redlined “remain wanting for investment.”
In the highest-poverty, majority-minority school districts, students are subject to “larger class sizes, fewer academic options, older buildings, less technology and fewer art, music and gym classes,” said Philadelphia-area parent Jamella Miller, with teachers often purchasing their own classroom supplies.
Walking through Pennsylvania, you might encounter a student outside a grocery store seeking donations to sustain their school’s athletic program—while just a town away, another student has access to year round high-quality football fields, basketball courts, sports equipment and coaches.
In a local paper, Yuma Feldman, a junior at the Philadelphia High School for the Creative and Performing Arts explained that “‘we’ll have periods where—especially in math classes—we just won’t have a teacher for a long time’… She expressed that she felt limited in her education because of the lack of funding.” This experience is not unique to Feldman’s school as it can be seen in urban areas across the US.
Redlining affects not only low-income Black neighborhoods but urban areas more broadly. Despite suburban areas increasingly becoming diversely populated, when an American is told to picture suburbia, they typically picture White families in cookie cutter homes. This was a highly calculated reality. Protected by the New Deal, realtors steered White families to suburban homes, subsequently concentrating Black and Hispanic residents in lower-income urban areas.
Property values in urban areas decreased as they increased in suburban areas, leading suburban local governments to serve predominantly White students and collect more public funding from taxes. Philadelphia County has a predominately Black population and remains one of the most segregated cities in the US, directly impacting its school system. In 2015, a formerly redlined North Philadelphia area was about two-thirds Black, with roughly 42% living below the poverty line.
By contrast, Lower Merion County, Pennsylvania is a suburban county located directly next to Philadelphia County. During the 2024–2025 school year, about 79% of Lower Merion School District’s (LMSD) revenue came from real estate taxes, compared to just 34% in the Philadelphia School District (PSD).
Pennsylvania’s legislature has tried to reduce these gaps, including enacting Title I to fund high-poverty schools. Still, PSD faces a $300 million deficit, prompting school closures and staff layoffs. Proposed budgets by Governor Josh Shapiro and Philadelphia Mayor Cherelle L. Parker won’t fully fix the shortfall.
“When these schools close, it really destabilizes the neighborhood,” said Akira Drake Rodriguez, assistant professor of city planning at the University of Pennsylvania.
Disinvestment and historic redlining in Philadelphia, and other urban communities, has impacts on schools beyond funding, and has contributed to the public health epidemic of school violence. Overall, schools in urban areas are nearly twice as likely to experience school violence than those in suburban areas. Furthermore, gun violence is 13 times more likely to occur in previously redlined communities within Philadelphia. Not only does this disrupt communities and schools, but it drives high-quality teachers away from the area.
Larger Implications for Student Outcomes
Redlining and segregation have left many high-poverty Black school districts with greater needs but less access to resources, harming educational outcomes across all age groups. Students with more sufficient education and functional literacy are more likely to gain employment, earn a livable wage, less likely to interact with the criminal justice system and have lower rates of depression.
According to findings from Opportunity Insights at Harvard University, well resourced schools have been found to produce better long-term outcomes for their students, such as higher college attendance rates and lifetime earnings.
Kindergarten test scores strongly predict later success, including as it relates to income, education and homeownership outcomes. Early education assessments show large discrepancies across race and socioeconomic status that correlate with access to Pre-K programs. The lack of access to appropriately funded early education is concentrated within previously redlined communities.
These specific inequalities, spread across historically marginalized groups, are due to past structural discrimination via historic redlining.
Moving Forward
Educational inequality deeply harms students and their communities. As a collective nation, it is pivotal that we work toward a just economy and a more equitable education funding system that provides opportunity to all students. Progress is being made, including more reinvestment efforts in historically redlined communities, but the work is not yet done.
The funding allocation for education in the US needs to be fundamentally reformed. This reform needs to prioritize long term investment in underserved communities and ensure that each child has equal access to a quality education.
As protestors of the Philadelphia school closures said, zip codes should not determine a child’s education. Only by committing to a more equitable funding model, holistic student support and sustained advocacy efforts can we ensure that every child has a fair opportunity to learn, thrive and grow.
Julia McGarrey is an Intern with NCRC’s Strategic Programs & Development division.
Photo credit: RDNE Stock Project via Pexels.
