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Agostini v. Felton stands out as one of the U.S. Supreme Court's major rulings on the parameters of permissible state aid to religiously affiliated nonpublic schools and their students under the Establishment Clause of the First Amendment for two reasons. First, the Court lifted the ban that it had imposed against the on-site delivery of Title I services to children from disadvantaged families who attended religiously affiliated nonpublic schools, thereby making its programs available to a wide range of students, many of whom had not been served. Second, the Court modified the tripartite test that it enunciated in Lemon v. Kurtzman by reviewing only its first two parts, purpose and effect, while treating entanglement as one element in evaluating a law's effect.

Title I, enacted in 1965 as part of the Elementary and Secondary Education Act, was designed to provide equal educational opportunities by offering remedial instruction for children whose families were economically disadvantaged. Under this program, the New York City Board of Education (NYCBOE), which was at the center of the litigation, like many school systems in the United States, used its Title I funds to provide remedial instruction in reading and mathematics, English as a second language, and guidance services for eligible students.

Under the plan developed by the NYCBOE, officials implemented significant safeguards to avoid violating the Establishment Clause. First, public school personnel who volunteered to serve in the religiously affiliated nonpublic schools were supervised by field personnel who made frequent unannounced visits. Second, assignments were made without regard to the religious affiliations of the public school employees. Third, most worked in nonpublic schools that were not affiliated with their own beliefs. Fourth, the majority of Title I teachers moved among different nonpublic schools and did not usually spend a full week in one location. Fifth, the Title I educators were given detailed written and oral instructions ordering them to avoid involvement with religious activities, to bar religious materials from their classrooms and work areas, and to minimize contact with staff from the nonpublic schools. Sixth, all materials and equipment purchased with Title I funds were used solely in that program.

Despite the fact that the NYCBOE had these extensive safeguards in place, six taxpayers filed suit alleging that the Title I program violated the Establishment Clause. The Supreme Court, in Aguilar v. Felton, applying its ubiquitous Lemon v. Kurtzman test, affirmed an earlier order that the program was unconstitutional. Writing for the closely divided Court, Justice William J. Brennan found that the program passed Lemon's first two prongs because it had a secular legislative purpose and a principle or primary effect that neither advanced nor inhibited religion. However, even absent allegations or evidence of misuse of federal finds, Brennan struck the program down based on the mere fear that it could have resulted in an impermissible excessive of government entanglement with religion. Justice Sandra Day O'Connor, who would write the Court's majority opinion in Agostini, authored a strident dissent.

On remand in Aguilar, a federal trial court in New York enjoined the NYCBOE's Title I program. As a result of Aguilar, children either left classes in their religiously affiliated nonpublic schools to receive aid in mobile units parked nearby their schools, were transported to neutral locations, or used computer-aided instruction to access programming. About one third of parents simply stopped sending their children for Title I services.

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