The Impact Aid program, administered by the U.S. Department of Education (ED), was originally established in 1950 by P.L. 81-815 and P.L. 81-874, 15 years prior to the enactment of the Elementary and Secondary Education Act (ESEA). Impact Aid compensates local educational agencies (LEAs) for a "substantial and continuing financial burden" resulting from federal activities. These activities include federal ownership of certain lands, as well as the enrollments in LEAs of children whose parents work or live on federal property and children living on Indian lands. The federal government provides compensation because LEAs are unable to collect property or other taxes from these individuals (e.g., members of the uniformed services living on military bases) or their employers, even though the LEAs are obligated to provide free public education to their children. Thus, Impact Aid is intended to compensate LEAs, in part, for the resulting loss of tax revenue. This report begins with a general overview of the various payments made under the Impact Aid program, followed by a detailed discussion of each section of Title VII as amended by the ESSA. This is followed by information about recent appropriations for Impact Aid. The report concludes with an overview of the "Impact Aid" programs administered by DOD. Tables included in Appendix A provide appropriations data in constant 2018 dollars. Appendix B provides a glossary of acronyms used in the report.