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Leaders of some large-city school districts say they are prepared to jump into the competition for nearly $400 million in new Race to the Top grants from the U.S. Department of Education.

But the head of a coalition of rural districts said that while the money would be welcomed, it may require too much effort from small district staffs to apply for and to administer.

Draft regulations for the rewards, released late last month, would require districts to put a major focus on helping schools tailor instruction to the needs of individual students.

The department anticipates giving out about 15 to 20 four-year grants of up to $25 million each. Districts would be able to apply for the funds individually, or as part of a consortium with other districts, even those in other states. Charter schools, as well as other organizations that are defined as a 鈥渓ocal education agency鈥� by their states, could compete as well.

Terry B. Grier, the superintendent of the 203,000-student Houston district, said the draft regulations were in line with what the district was anticipating and he expects Houston to apply.

However, state officials have made it clear that districts still will have to follow all of Texas鈥� regulations, said Debbie Graves Ratcliffe, a spokeswoman for the Texas Education Agency.

鈥淲e just hope they鈥檒l take a look at the fine print,鈥� she said.

Texas has refused to apply for earlier state-level Race to the Top grants. Mr. Grier said the state has indicated it doesn鈥檛 want the federal government intruding in state functions. 鈥淏ut we don鈥檛 want the state interfering in what the school board decides,鈥� he said.

John E. Deasy, the superintendent of the 665,000-student Los Angeles schools, said his district had already started putting together a plan to apply, which will be filled in with more detail now that the regulations are known.

Mr. Deasy said that the Education Department is asking a lot of districts for a relatively small amount of money, from the perspective of a large-city district: The largest grant will be $25 million, and the Los Angeles district鈥檚 operating budget for fiscal 2012 is $6.95 billion.

Though more money would be welcome, 鈥渋n the context of L.A. and California, every penny matters,鈥� Mr. Deasy said. 鈥淲e have almost zero funds that could be used鈥� for the programs the competition will support, he added.

The district competition is the latest iteration in the Education Department鈥檚 Race to the Top franchise, begun under the economic-stimulus program in 2009. So far, it has provided around $5 billion to states that embrace certain education redesign priorities, want to create new assessments aligned to the Common Core State Standards, or want to improve early-childhood education programs.

Districts already benefiting under the earlier, state-level rounds of Race to the Top will have a shot at this districts-only round, too. Eleven states and the District of Columbia won in the first round for states, and seven states in the next tier of applicants received grants in a subsequent round.

The draft regulations will be open for comment through Friday on the department鈥檚 website. Final applications will be available in mid-July, and districts will apply in October. The money itself will be disbursed by the end of the calendar year.

鈥楶ersonalized Learning鈥�

This round of the competition focuses on 鈥減ersonalized learning environments.鈥� As a central part of their applications, districts will have to explain how they plan to do a better job of individualizing instruction for all students, so that all graduate college- and career-ready. The draft regulations emphasize collecting student data, both to track individual student progress and to make sure schools are addressing their students鈥� strengths and weaknesses.

That could be accomplished in the classroom, possibly by creating 鈥減ersonalized learning plans,鈥� which outline students鈥� educational and career goals and track their progress toward them. Districts could choose to offer extra supports, such as expanded use of technology. And they could decide to go with a 鈥渃ompetency-based鈥� approach, meaning students would advance for mastering particular skills, as opposed to the amount of time they spend working on a given subject.

鈥淲e all want a school that meets the unique needs of our children,鈥� said U.S. Secretary of Education Arne Duncan during a conference call announcing the draft regulations. 鈥淲e recognize this is a very ambitious goal. [But] we鈥檝e [seen that] it鈥檚 possible throughout the country. For some teachers that involves technology, for some it involves partnering with parents. We鈥檙e wide open to new strategies and new approaches.鈥�

Districts will also have to address the 鈥渇our assurances鈥� that were a cornerstone of the state rounds of Race to the Top, including teacher quality, turning around low-performing schools, boosting data quality, and improving standards and assessments.

Eligible districts or consortia must have at least 2,500 students in order to apply, and there鈥檚 no maximum number of students that can be served by a district or consortia. At least 40 percent of the students served across all participating schools in a district or consortium must be from low-income families, meaning they are eligible for free- or reduced-price lunch.

The Education Department is also asking districts to specify whether they are rural and whether they are in a state that has already won a Race to the Top grant. The idea is to make sure that different types of districts, including small rural ones in states that didn鈥檛 win a Race to the Top grant, have a fair shot at competing for the funds. Some members of Congress, led by U.S. Sen. Patty Murray, D-Wash., had asked the department to look out for rural schools in this round.

Jared T. Bigham, the executive director of the Tennessee Rural Education Association, said that smaller districts in his state would have no problem with the oversight provisions of the regulations. However, rural districts simply don鈥檛 have the staff to manage complex federal grants.

鈥淚t鈥檚 not a lack of willingness; it just boils down to not enough hours in the day,鈥� said Mr. Bigham, who is also the principal of Copper Basin High School in the 2,500-student Polk district. Many small districts have a central-office staff of six or seven people, he said.

Ms. Murray and other senators requested earlier this year that the Education Department provide technical assistance and other support to rural districts.

Size to Vary

The size of the awards will depend on how many students are in an applicant鈥檚 mix. Applicants serving 2,500 to 5,000 students can get $15 million to $20 million; those serving between 5,001 and 9,999 can get $17 million to $22 million; and those serving 10,000 students or more can get from $20 million to $25 million.

Districts don鈥檛 have to come up with plans that serve all their students, in every school. Instead, they could develop a plan for low-performing schools, schools that feed into one another, or just for particular grade spans, such as all 5th and 6th graders.

By the 2014-15 school year, districts will have to promise to implement evaluation systems that take student outcomes into account for teachers, principals, superintendents, and school boards. Previous Race to the Top competitions looked solely at educators who work in schools as opposed to district-level leaders.

Mr. Grier, the superintendent of Houston, said that evaluating school boards wasn鈥檛 as useful as other provisions. 鈥淚 think a school board would tell you their evaluation comes every four years,鈥� he said, referring to the election cycle in his district.

Chester E. Finn Jr., the president of the Washington-based Thomas B. Fordham Institute, wrote on the organization鈥檚 blog that he found 鈥渧ery refreshing, even exhilarating, the inclusion of superintendents and boards in a results-based accountability system, rather than the customary focus only on schools and their principals and teachers.鈥�

Beyond that, applications will be judged by districts鈥� 鈥渧ision鈥� for boosting performance on high-stakes tests, narrowing the achievement gap, and improving graduation rates, among other goals. And, as with previous rounds of Race to the Top, applicants will be judged on their ability to reach out to parents, community members, and others on their plans.