Formula Grant programs are noncompetitive awards based on a predetermined formula. These programs are sometimes referred to as state-administered programs.

Unlike a formula grant, a Discretionary Grant awards funds on the basis of a competitive process. The Department of Education reviews applications, in part through a formal review process, in light of the legislative and regulatory requirements and published selection criteria established for the program. The review process gives the department discretion to determine which applications best address the program requirements and are, therefore, most worthy of funding.