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Many countries have a nationalized school system operated by the central government (Hubsch, 1989). Under the 10th Amendment of the Constitution, Congress is forbidden from creating a nationalized school system. However, the U.S. Congress has the power to shape educational policy and practices by offering monies to states contingent on compliance with federal mandates. This is called categorical aid. Congress has passed two types of legislation that have had a dramatic impact on the public schools, antidiscrimination legislation and federal education legislation. Key federal statutes affecting the schools are highlighted in the paragraphs that follow.

Some federal education legislation is grant legislation; that is, funds are provided to states on the condition that schools comply with certain educational policies and practices. The Elementary and Secondary Education Act of 1965 and the Individuals with Disabilities Education Act, reauthorized and amended in 2004, are important examples of this type of legislation. Other federal education legislation stipulates that no federal funds will be made available to schools unless they adhere to specific educational policies and practices outlined in the law; the Family Educational Rights and Privacy Act of 1974 (FERPA) is an example of this type of legislation.