Formula grant

The specified formula is a rule that tells potential recipients precisely how they can calculate the quantity of aid to which they are entitled under the provisions of law, as long as the recipient qualifies for such assistance under the stipulations of the program. Usually, the elements in the formula are chosen to reflect characteristics related to the purpose of the aid. Some factors in the formula are also likely to have political significance since there is no such thing as a neutral formula, as all formulas reward some recipients more than others, depending on their relative standing given the formula specified.